The Closet Trading Co. Franchise Cost, Revenue & Review 2026
- Investment
- $157K – $370K
- Disclosed sales
- $592K
- gross sales, not profit
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
The Closet Trading Co. is a resale retail franchise curating and reselling consigned designer clothing and accessories. Franchisees run the stores, managing consignment intake, resale inventory, and sales.
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]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
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
- $157K – $370K
- 17th pct Retail
- Avg gross sales
- $592K
- Incl. company outlets5th pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 8
- 8th pct Retail
- SBA charge-off
- N/A
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 $157K – $370K including a $60K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $592K/year (median $645K) (includes company-owned outlets).
- RISKVerdict B (Above average), verdict score 64/100 (higher is better).
- GROWTHNegative: net -1 franchised outlets in the latest year (0 opened, 1 closed) (Item 20).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- The Closet Trading Company Franchising, LLC
- Parent company
- Luca B. Styles
- FDD Item 1, page 9 of the 2025 FDD
- Predecessor
- The Closet (sole proprietorship, 2003-2009)
- Prior franchisor entity
- 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
- Wyoming
- HQ
- 714 State Street, Santa Barbara, California 93101
- Auditor
- Larson & Company P.C.
- Audited financials
- Franchisor revenue
- $229K
- vs $107K prior year
Overview
About
- CEO
- Johanna Zlenko
- Headquarters
- CA
- Founded
- 2019
- FDD year
- 2025
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost runs 21% below the typical retail franchise.
Source: FDD 2025 · Items 5–7
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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $157K – $370K
- Top 40% of category vs category
- Liquid capital req'd
- $25K – $90K
- Top 40% of category vs category
- Franchise fee
- $60K – $60K
- Middle of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 1.0%
- 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 | 1.0% of gross sales |
| Technology fee | $1 |
| Training fee | $3K |
| Transfer fee | $15K |
| Renewal fee | $10K |
| Inventory (initial) | $3K – $5K |
| Total fee load | 7.0% of rev |
What do units actually make?
Average unit sales run 26% below the retail norm.
Includes company-owned outlets
Source: FDD 2025 · 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 The Closet Trading Co. 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
$321K
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 The Closet Trading Co. 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: 2025 FDD
Financial Performance
Includes company-owned outlets
- Avg gross sales
- $592K
- Per unit, per year
- Median gross sales
- $645K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Historic
- Sample size
- 7 outlets
- vs category median 46 · small
- Range (low → high)
- $249K→$837KCited, not corroborated — printed on page 47 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- 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 $592K/year in gross sales. Median ($645K) exceeds the average — distribution is bottom-heavy but most units perform well. Revenue-to-investment ratio: 2.2x. Includes company-owned outlets.
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
Net unit growth of +200.0% over 3 years (0 opened, 1 closed).
Multi-unit rate
Only 1% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
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 The Closet Trading Co. 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 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 8
- Opened
- 0
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 12.5%
- Company-owned
- 5
- Corporate units in the system
- % franchised
- 38%
- vs corporate-owned
- Multi-unit owners
- 1.0%
- Net growth (3-yr)
- +200.0%
- Net unit change over 3 years
- 3-yr CAGR
- +200.0%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 1
- Franchisor bought back
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- 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)
Where the owners are · Item 20 owner list
3 current owners across 2 states.
- CA 2
- FL 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Small system (8 units, 3 franchised, mostly company-owned) with thin revenue $153,039. No litigation, bankruptcy, or going-concern; Item 19 disclosed with $648,674 avg gross sales, audited. Concern is small scale/thin franchisor revenue.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
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 64 / 100 verdict
- 01MINORSmall system (8 units, only 3 franchised), thin revenue $153,039
- 02MINORNo litigation or bankruptcy
- 03MEDItem 19 disclosed, audited financials
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 2025 · 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 | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| 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 |
| Termination groundsℹ | 14 |
| Curable defaultsℹ | 7 |
| 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
- Ongoing training
- Required
- Field support
- 16 hrs/yr
- On-site visits per year
- Site selection
- franchisee (subject to franchisor approval)
- Franchisor financing
- Not offered
- Item 10
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
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. Important context: Includes company-owned outlets. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns The Closet Trading Co.?
The Closet Trading Co. is franchised by The Closet Trading Company Franchising, LLC. Its parent company is Luca B. Styles. Source: FDD Item 1, 2025 filing.
What is Item 19 in the The Closet Trading Co. 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 The Closet Trading Co. FDD and qualifies whose outlets they describe.
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 3 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 verdict score of 64 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 The Closet Trading Co., 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.