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).
- Rated STRONG with a risk score of 41/100. SBA loan default rate of 0.0% across 262 loans (below the industry average).
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 Plato’s Closet® unit return on the cash you put in?
Unlevered ROIC · per unit
23%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Plato’s Closet® units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$262K
on $1.3M purchase
Total debt
$1.0M
SBA $0.7M + senior + seller note
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.
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 · 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 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.
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.
Score breakdown · what drove the 41 / 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
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
98 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Plato’s Closet® · FDD (2026) PDF