The Closet Trading Co.
Bottom line
- Total investment $157K – $370K including a $60K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $592K/year (median $645K). Estimated payback in 3.8 years.
- Rated MODERATE with a risk score of 63/100. SBA loan default rate of 0.0% across 1 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 The Closet Trading Co. unit return on the cash you put in?
Unlevered ROIC · per unit
17%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 The Closet Trading Co. units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$237K
on $1.2M purchase
Total debt
$946K
SBA $0.6M + senior + seller note
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.
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
A contracting franchise system with undisclosed financials, going concern uncertainty, and an unsustainably high cost structure relative to unit viability.
Score breakdown · what drove the 63 / 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
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
13 numbers
One-time purchase · CSV download · Validation questions included
FDD download
The Closet Trading Co. · FDD (2025) PDF