Plato’s Closet®Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Plato’s Closet® franchise requires a total initial investment of $356K – $468K, including a $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.3M[2]. SBA 7(a) loans show a 2.1% charge-off rate across 229 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $356K – $468K
- 34th pct Retail
- Avg gross sales
- $1.3M
- 16th pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 526
- 38th pct Retail
- SBA default
- 2.1%
- system-wide median varies by category
Quick verdict · Retail · color = vs category peers
Green = >15% above Retail avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Each dollar invested generates 3.2x in gross revenue, well above the typical 1.5-2.5x range.
Franchising since 1999. Systems this mature have refined operations and brand recognition.
Franchised units fell from 526 to 506 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $356K – $468K including a $25K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.3M/year (median $1.2M).
- Verdict A (Top Quintile) with a risk score of 9/100. SBA loan charge-off rate of 2.1% across 229 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Winmark Corporation
- Incorporated in
- MN
- HQ
- 605 Highway 169 N, Suite 400, Minneapolis, Minnesota 55441
- Auditor
- Grant Thornton LLP
- Audited financials
- Franchisor revenue
- $83.2M
- vs $81.3M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
Plato's Closet franchisees operate used apparel retail stores targeting teens and young adults, buying and selling gently worn clothing, shoes, and accessories. Day-to-day operations include customer transactions, inventory curation and pricing, floor merchandising, staff management, and supplier relationship building with local clothing donors.
- CEO
- Brett D. Heffes
- Headquarters
- MN
- Founded
- 1988
- FDD year
- 2026
- States available
- 50
FDD Item 7 · 2026 filing · 12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $25K | $25K | |
| Fixtures and Supplies | $55K | $70K | |
| Signs | $11K | $16K | |
| Security Cameras | $2K | $4K | |
| Point-of-Sale (POS) Systemnot refundable | $23K | $31K | |
| Leasehold Improvements | $15K | $22K | |
| Build-Out | $35K | $55K | |
| Deposits and Business Licenses | $5K | $15K | |
| Opening Inventory | $75K | $85K | |
| Miscellaneous Pre-Opening Expenses | $50K | $65K | |
| Rent - First 3 Months | $20K | $30K | |
| Additional Funds - 3 Months | $40K | $50K | |
| Total initial investment | $356K | $468K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$105K
8.0% margin
Unlevered ROIC
23%
EBITDA / total invested capital
Payback
4.4 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $356K – $468K
- Better than avg vs category
- Liquid capital req'd
- $40K – $50K
- Better than avg vs category
- Franchise fee
- $15K – $25K
- Better than avg vs category
- Royalty
- 5.0%
- Gross Sales · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $0 |
| Transfer fee | $10K |
| Renewal fee | $10K |
| Inventory (initial) | $75K – $85K |
| Total fee load | 7.0% of rev |
Financial Performance
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.2M
- Item 19 type
- gross_sales
- Sample size
- 492 units
- vs category median 49 · large
- Range (low → high)
- $227K→$3.8M
- Cohort dispersion (min → max)
- Quartile band
- $754K→$2.0M
- Bottom 25% → top 25%
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Reporting year
- 2025
- Fiscal year the figures cover
- Transparency
- 6 / 5
- vs category median 2 / 5 · above
Compared against 304 Retail brands
vs Retail averages
How Plato’s Closet® Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 526
- Opened
- 18
- Last reporting year
- Closed
- 7
- Terminated
- 6
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.3%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- +2.1%
- Net unit change last year
- 3-yr CAGR
- +4.0%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 16
- Transfer rate
- 3.0%
- Owners selling to other franchisees
- Continuity rate
- 98.7%
- Units that stayed open
- Termination rate
- 1.3%
- Franchisor-initiated terminations
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 9 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 229
- Loan volume
- $62.3M
- Median loan
- $272K
- average
- Charge-off rate
- 2.1%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 86
- Defaults
- 3
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Plato's Closet presents moderate-to-caution risk: strong revenue per unit but anemic system growth, non-disclosed profitability, and high capital requirements without clear earnings visibility.
Litigation (Item 3)
No litigation is required to be disclosed in this Item.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Grant Thornton LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 9 / 100 rating
- 01MEDNet income not disclosed in Item 19 — inability to verify profitability claims against $1.31M average revenue
- 02MINORMinimal system growth of 2.1% YoY suggests market saturation or franchisee underperformance
- 03MEDHigh initial investment ($355.7K–$467.9K) combined with undisclosed net income creates ROI uncertainty
- 04MINOR5% royalty on gross sales with unknown net margins limits transparency on true franchisee economics
- 05HIGHNo going concern statement may indicate franchisor stability, but lack of growth trajectory raises sustainability questions
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Minneapolis, Minnesota |
| Governing law | State where store is located |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation is required to be disclosed in this Item.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 21 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Franchisor financing
- Offered
- Item 10
- POS system
- Winmark Point-of-Sale (POS) System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Winmark Point-of-Sale (POS) System
Item 20 · call current owners
Franchisee Contacts
98 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Plato’s Closet® · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Plato’s Closet® franchise?
The total investment to open a Plato’s Closet® franchise ranges from $356K – $468K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Plato’s Closet® franchise owners earn?
According to Item 19 of the Plato’s Closet® FDD, the average gross sales per unit is $1.3M. The median is $1.2M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Plato’s Closet®'s franchise failure rate?
Based on SBA 7(a) loan data, Plato’s Closet® has a charge-off rate of 2.1% across 229 loans, meaning 2.1% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Plato’s Closet® franchise locations are there?
As of their most recent FDD filing, Plato’s Closet® has 526 total units in the United States, including 526 franchised units and 0 company-owned units. 18 new units were opened in the latest reporting year.
Is Plato’s Closet® a good franchise to buy?
FranchiseVerdict rates Plato’s Closet® as a A-grade franchise with a risk score of 9 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Plato’s Closet®, you can request corrections or provide updated information.
Claim this brandOther Retail franchises
Compare similar franchise opportunities in the Retail category
Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.