The Closet Trading Co.Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A The Closet Trading Co. franchise requires a total initial investment of $157K – $370K, including a $60K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $592K[2]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $157K – $370K
- 41st pct Business Serv…
- Avg gross sales
- $592K
- 13th pct Business Serv…
- Royalty
- 5.0%
- 6th pct Business Serv…
- Units
- 8
- 14th pct Business Serv…
- SBA default
- N/A
Quick verdict · Business Services · color = vs category peers
Green = >15% above Business Services 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
Franchised units fell from 4 to 3 over 3 years. Investigate why operators are leaving.
26% cash-on-cash return (based on P&L Bottom Line). Within the 15-30% range most franchise investors consider acceptable.
Bottom line
- Total investment $157K – $370K including a $60K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $592K/year (median $645K), with an estimated 26% cash-on-cash return (based on P&L Bottom Line).
- Verdict B (Above Average) with a risk score of 54/100.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- THE CLOSET TRADING COMPANY FRANCHISING, LLC
- Parent company
- Luca B. Styles
- CEO title
- Chief Executive Officer
- Johanna Zlenko
- CEO experience
- 20 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- WY
- HQ
- 714 State Street, Santa Barbara, California 93101
- Auditor
- Larson & Company P.C.
- Audited financials
- Franchisor revenue
- $229K
- vs $107K prior year
Overview
About
The Closet Trading Co. operates secondhand/consignment retail locations where franchisees curate and resell clothing, accessories, and home goods. Day-to-day operations include inventory procurement from consignors, visual merchandising, customer sales transactions, and vendor relationship management. Franchisees manage both retail floor operations and back-office consignor payment processing and tracking.
- CEO
- Johanna Zlenko
- Headquarters
- CA
- Founded
- 2019
- FDD year
- 2025
- States available
- 2
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $60K | $60K |
| Working capital (3–6 mo) | $25K | $90K |
| Equipment, build-out, other | $72K | $220K |
| Total initial investment | $157K | $370K |
Source: The Closet Trading Co. 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
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
$101K
17.0% margin
Unlevered ROIC
31%
EBITDA / total invested capital
Payback
3.2 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $157K – $370K
- Near category avg vs category
- Liquid capital req'd
- $25K – $90K
- Better than avg vs category
- Franchise fee
- $60K – $60K
- Near category avg vs category
- Royalty
- 5.0%
- Gross Sales · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
- Payback period
- 3.8 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $1 |
| Training fee | $3K |
| Transfer fee | $15K |
| Renewal fee | $10K |
| Total fee load | 7.0% of rev |
Financial Performance
- Avg gross sales
- $592K
- Per unit, per year
- Median gross sales
- $645K
- Avg p&l bottom line
- $69K
- Reported as P&L Bottom Line in FDD Item 19
- Cash-on-cash
- 26.3%
- Based on P&L Bottom Line / investment midpoint
- Item 19 type
- Historic
- Sample size
- 7 units
- vs category median 32 · small
- Range (low → high)
- $249K→$837K
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 7 / 5
- vs category median 3 / 5 · above
Compared against 360 Business Services brands
vs Business Services averages
How The Closet Trading Co. Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 8
- Opened
- 0
- Last reporting year
- Closed
- 0
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 5
- Corporate units in the system
- % franchised
- 38%
- vs corporate-owned
- Multi-unit owners
- 1.0%
- Net growth (yr3)
- -25.0%
- Net unit change last year
- 3-yr CAGR
- +0.0%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 0
- Projected new
- 5
- Franchisor's next-year forecast
- Termination rate
- 12.5%
- Franchisor-initiated terminations
- Ceased ops
- 12.5%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 2 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
2
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 1 7(a) loan on file; statistical reliability is limited below 10 loans.
- Total loans
- 1
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
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
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
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
A contracting franchise system with undisclosed financials, going concern uncertainty, and an unsustainably high cost structure relative to unit viability.
Litigation (Item 3)
No litigation required to be disclosed
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Larson & Company P.C.
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 54 / 100 rating
- 01MEDUnit count declined 25% year-over-year (8 units total) — indicates system contraction and potential franchisee dissatisfaction
- 02HIGHGoing Concern status is False — suggests financial instability or operational uncertainty at corporate level
- 03MINORNo Item 19 financial disclosures — inability to validate claimed $591,531 average revenue across only 8 locations
- 04MINORHigh initial investment ($157,400–$370,300) relative to small unit count and declining trajectory raises ROI sustainability questions
- 05MED5% royalty on gross sales with no disclosed marketing fund — franchisees bear full profit erosion without documented co-op support
- 06MINORExtremely small franchise system (8 units) limits peer support network and increases risk of system failure
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 |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| Territory radius | 2 mi |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles County, California |
| Jury trial waiver | Yes |
| Governing law | California |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed
Items 10, 11
Training & Operations
- Classroom training
- 34 hrs
- On-the-job training
- 40 hrs
- Training location
- Franchisor location and on-site
- Field support
- 16 hrs/yr
- On-site visits per year
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
3 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
The Closet Trading Co. · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a The Closet Trading Co. franchise?
The total investment to open a The Closet Trading Co. franchise ranges from $157K – $370K, with an initial franchise fee of $60K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do The Closet Trading Co. franchise owners earn?
According to Item 19 of the The Closet Trading Co. FDD, the average gross sales per unit is $592K. The median is $645K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is The Closet Trading Co.'s franchise failure rate?
SBA 7(a) loan charge-off data is not available for The Closet Trading Co. (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many The Closet Trading Co. franchise locations are there?
As of their most recent FDD filing, The Closet Trading Co. has 8 total units in the United States, including 4 franchised units and 5 company-owned units.
Is The Closet Trading Co. a good franchise to buy?
FranchiseVerdict rates The Closet Trading Co. as a B-grade franchise with a risk score of 54 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.
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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.