Bottom line
- Total investment $82K – $197K including a $39K franchise fee.
- Average unit revenue of $512K/year.
- Rated MODERATE with a risk score of 64/100.
- 19 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Clozetivity unit return on the cash you put in?
Unlevered ROIC · per unit
35%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Clozetivity units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$410K
on $2.0M purchase
Total debt
$1.6M
SBA $1.0M + senior + seller note
Overview
About
Clozetivity is a closet organization and styling service where franchisees help residential clients redesign, organize, and maximize their closets. Franchisees conduct in-home consultations, handle wardrobe assessment and layout, and may offer personal shopping/styling services. The business model is service-based with travel to client homes and direct sales of organizational products or services.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 15 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
HIGH RISK: Clozetivity presents a toxic combination of corporate leadership with fraud history, active multi-party litigation alleging fraud and registration violations, undisclosed profitability, and escalating fees on a system showing growth but no transparency regarding franchisee earnings or net income.
Score breakdown · what drove the 64 / 100 rating
- 01HIGHCEO has 1999 criminal conviction for credit card fraud, raising integrity concerns for a cash-based closet organization business
- 02HIGHMultiple ongoing lawsuits involving breach of duty, fraud, and registration violations across Clozetivity and affiliated brands (Frost Shades, Dryer Vent Squad, Patch Boys) suggest systemic corporate governance issues
- 03MEDNet income not disclosed despite $512k average revenue claim — inability or unwillingness to provide profitability data is a major transparency red flag
- 04MEDEscalating royalty structure ($400→$2,000/month by year 4) combined with undisclosed net income makes ROI calculation impossible and suggests revenue extraction model
- 05HIGHGoing Concern = False indicates potential financial instability at corporate level despite 119.2% YoY unit growth (which may reflect aggressive recruiting masking unit attrition)
- 06HIGHLitigation involves both franchisees AND affiliated brands, suggesting pattern of disputes with business partners; claims include registration violations (FTC compliance risk)
- 07MINORHigh franchise fee ($39k) + escalating royalties on unknown profitability = aggressive capital extraction with asymmetric information favoring franchisor
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
25 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Clozetivity · FDD (2024) PDF