Plato’s Closet® Franchise Cost, Revenue & Review 2026
- Investment
- $356K – $468K
- Disclosed sales
- $1.3M
- gross sales, not profit
- SBA charge-off
- 2.1%
- on 229 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Plato's Closet is a resale-retail franchise buying and selling gently used, on-trend clothing and accessories for teens and young adults. Franchisees run stores sourcing inventory directly from local sellers, then curating, pricing, and merchandising.
FranchiseVerdict summary · 2026
A Plato’s Closet® franchise requires a total initial investment of $356K – $468K, including a $15K – $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]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $356K – $468K
- 38th pct Retail
- Avg gross sales
- $1.3M
- 16th pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 526
- 40th pct Retail
- SBA charge-off
- 2.1%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Retail · color = vs category peers
Green = favorable by >10% vs Retail median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $356K – $468K including a $25K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.3M/year (median $1.2M).
- RISKVerdict A (Strongest tier), verdict score 89/100 (higher is better). SBA loan charge-off rate of 2.1% across 229 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHPositive: net +11 franchised outlets in the latest year (18 opened, 7 closed) (Item 20).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Winmark Corporation
- CEO title
- Chair of the Board, Director and Chief Executive Officer
- Brett D. Heffes
- Incorporated in
- MN
- HQ
- 605 Highway 169 N, Suite 400, Minneapolis, Minnesota 55441
- Auditor
- Grant Thornton LLP
- Audited financials
- Franchisor revenue
- $86.1M
- 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
- CEO
- Brett D. Heffes
- Headquarters
- MN
- Founded
- 1988
- FDD year
- 2026
- States available
- 50
Can you afford it, and what does the money buy?
Entry cost runs 23% above the typical retail franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown12 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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $356K – $468K
- Top 40% of category vs category
- Liquid capital req'd
- $40K – $50K
- Top 40% of category vs category
- Franchise fee
- $15K – $25K
- Top 40% of category vs category
- Royalty
- 5.0%
- 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 |
What do units actually make?
Average unit sales run 63% above the retail norm.
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Plato’s Closet® until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$457K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Plato’s Closet® unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.2M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales and gross profit
- Sample size
- 492 outlets
- vs category median 46 · large
- Range (low → high)
- $227K→$3.8MCited, not corroborated — printed on page 44 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $754K→$2.0M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 6 / 10
- vs category median 3 / 10 · above
Compared against 278 Retail brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.3M/year in gross sales. Revenue-to-investment ratio: 3.2x.
Fee burden
Total ongoing fee load of 7.0% (near the Retail median).
Disclosure
Transparency score 6/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (+4.0% 3-year CAGR) with 526 units.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Retail medians
How Plato’s Closet® Compares
Category median of published Retail brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
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
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +4.0%
- Net unit change over 3 years
- 3-yr CAGR
- +4.0%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 6
- Not renewed
- 0
- Transferred
- 16
- Reacquired
- 1
- Franchisor bought back
- Projected new
- 20
- Franchisor's next-year forecast
- 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 · 50 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.
Where the owners are · Item 20 owner list
523 current owners across 57 states.
- TX 43
- FL 42
- ON 27
- OH 25
- MI 22
- NC 22
- VA 20
- PA 19
- CA 18
- GA 17
- IN 17
- IL 16
- +45 more states
Counts only, from the list the franchisor prints in Item 20; 12 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
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%
- on 229 loans · 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
Vintage analysis
Plato’s Closet® charge-off rate by loan vintage
Top lenders financing Plato’s Closet® franchisees
Showing 3 of 86 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Plato’s Closet® from SBA 7(a) FOIA data.
Top SBA lenders
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Manufacturers and Traders Trust Company | 11 | $2.3M | 0.0% |
| 2 | Citizens Bank, National Association | 11 | $2.8M | 0.0% |
| 3 | Wells Fargo Bank National Association | 10 | $2.4M | 0.0% |
| 4 | Truist Bank | 9 | $1.2M | 0.0% |
| 5 | PNC Bank, National Association | 8 | $1.8M | 0.0% |
| 6 | Simmons Bank | 7 | $2.7M | 0.0% |
| 7 | The Huntington National Bank | 7 | $1.7M | 0.0% |
| 8 | JPMorgan Chase Bank, National Association | 6 | $681K | 0.0% |
| 9 | INB, National Association | 6 | $365K | 0.0% |
| 10 | Popular Bank | 6 | $1.6M | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 21 | 0 | 0.0% |
| GAGeorgia | 14 | 0 | 0.0% |
| VAVirginia | 12 | 1 | 11.1% |
| MNMinnesota | 11 | 0 | 0.0% |
| NYNew York | 11 | 0 | 0.0% |
| SCSouth Carolina | 11 | 0 | 0.0% |
| FLFlorida | 10 | 0 | 0.0% |
| NCNorth Carolina | 10 | 1 | 14.3% |
| CACalifornia | 9 | 0 | 0.0% |
| MIMichigan | 9 | 0 | 0.0% |
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 2.1% — 87% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
No litigation required to be disclosed in Item 3
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Grant Thornton LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Figures are from the audited consolidated financial statements of Winmark Corporation and Subsidiaries (the franchisor; Plato's Closet is one of Winmark's franchised brands), Item 21 / Exhibit C, fiscal year ended December 27, 2025. Statements reported in whole US dollars (not thousands). Total liabilities = current $5,666,000 + long-term $72,900,500 = $78,566,500; total shareholders' equity is a deficit of $(53,682,400); assets $24,884,100 = liabilities + equity (deficit), reconciles. Net worth negative due to $30M term loan / $30M notes payable and accumulated deficit. Total revenue $86,055,700 (royalties $76,352,800; leasing $2,631,800; merchandise sales $3,282,800; franchise fees $1,525,800; other $2,262,500).
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
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 89 / 100 verdict
- 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
- 05MINORNo 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
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Exclusive territory |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory radius | 5 mi |
| Territory population | 75,000 |
| Online sales rightsℹ | 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 |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Minneapolis, Minnesota |
| Jury trial waiver | No |
| Governing law | MN |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed in Item 3
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 21 hrs
- Training location
- Minneapolis, MN
- Ongoing training
- Optional
- Time to open
- 12 mo
- From signing to launch
- Site selection
- franchisee with franchisor consent
- Franchisor financing
- Not offered
- Item 10
- POS system
- Winmark POS System with Proprietary Software
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Winmark POS System with Proprietary Software
Item 20 · call current owners
Franchisee Contacts
535 owners to call
Name · phone · city · state. Extracted from FDD Item 20
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.
Who owns Plato’s Closet®?
Plato’s Closet® is franchised by Winmark Corporation. The FDD names no parent company. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Plato’s Closet® FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Plato’s Closet® FDD and qualifies whose outlets they describe.
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 verdict score of 89 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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.
Other 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.