Start a Closets By Design Franchise in 2024

2024 Franchise 500 Rank: #189 Ranked #262 last year

Initial investment: $154K - $511K

Units as of 2024: 91 28.2% over 3 years

Founded in 1982, Closets By Design creates beautiful and functional closets, in-home offices, garage cabinets, and entertainment centers. As a franchisee, you'll be required to manufacture and produce all the products and handle the installation process.

Closets By Design works under the umbrella of Home Organizers and has been franchising since 1998. As a company, they've grown to over 50 franchises in the United States, as well as several in Canada.

Why You May Want to Start a Closets By Design Franchise

After years of operation, quality solutions have been Closets By Design's identity. This identity may favor the franchisee. Customers may know what to expect from owning Closets by Design products. In addition to this, the company's proprietary customer relationship management system may help in the enterprise's daily operations.

Closets By Design typically offers exclusive territories under a business and sales model that proves to work time and again. No other franchisee from this company is permitted to operate in a domain that has already been claimed, potentially giving you plenty of customers to serve. With the availability of an exclusive territory to run and manage, franchisees may only need a team of several employees to operate efficiently.

What Might Make a Closets By Design Franchise a Good Choice?

To be part of the Closets by Design franchise team, you should make sure you're financially ready for an initial investment made up of a franchise fee and other startup costs. In addition, you should prepare yourself for the existence of ongoing fees that will include advertising, royalty, and potential renewal fees. Franchisees will also need to meet the company's set net worth and liquid capital requirements.

Closets by Design may offer qualified franchisees in-house financing to cover accounts receivable costs, inventory costs, and payroll costs. They also have relationships with third-party financing sources that may provide funds to cover startup costs, franchise fee, and equipment costs.

How To Open a Closets By Design Franchise

Before making any financial commitment or signing an agreement, you must perform your due diligence and establish if this is the right opportunity for you. As part of your due diligence process, speak to existing franchisees so you can learn more about what it means to open a Closets By Design franchise. Additionally, research the brand and your local area to see if a Closets By Design franchise would do well in your community. While competition is healthy, too much of it may not allow for the most possible growth.

When deciding if opening a Closets By Design franchise is the right decision for you, franchisees may take part in initial training programs. Initial training programs educate franchisees on service delivery and production to meet the clients' standards and expectations. On-the-job training will last for an extensive period of time, as will classroom training.

Various ongoing support is available to help franchisees during daily franchise operations. Support includes weekly newsletters, meetings and conventions, lease negotiation, field operations, site selection, grand opening support, a toll-free line, online support, and a company intranet platform. Additional marketing support includes ad templates, regional advertising, co-op advertising, national media, SEO, website development, email marketing, and more.

Company Overview

About Closets By Design

Industry	Home Improvement
Related Categories	Organization/Storage Systems, Miscellaneous Home-Improvement Businesses
Founded	1982
Parent Company	Home Organizers
Leadership	Jerry Egner, President
Corporate Address	13272 Garden Grove Blvd. Garden Grove, CA 92843
Social	Facebook, Twitter, LinkedIn, Instagram, YouTube, Pinterest

Business Overview

Franchising Since	1998 (26 years)
# of employees at HQ	21
Where seeking	This company is offering new franchises throughout the US. This company is offering new franchises in the following international regions: Canada
# of Units	91 (as of 2024)

Information for Franchisees

Here's what you need to know if you're interested in opening a Closets By Design franchise.

Financial Requirements & Ongoing Fees

Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.

Initial Franchise Fee Definition: The initial fee paid to a franchisor to join their system What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.	$20,000
Initial Investment Definition: The total amount necessary to begin operation of the franchise What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.	$154,000 - $511,000
Net Worth Requirement Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.	$500,000
Cash Requirement Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.	$200,000
Veteran Incentives Definition: A discount or other incentive offered to military veterans who buy a franchise with this company.	10% off franchise fee
Royalty Fee Definition: A ongoing fee paid to the franchisor on a regular basis. What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.	7.25%
Ad Royalty Fee Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts. What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.	2.25%
Term of Agreement Definition: The length of time your franchise agreement will last. What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.	5 years
Is franchise term renewable?	Yes

Financing Options

Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.

Third Party Financing	Closets By Design has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll

Training & Support Offered

Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.

On-The-Job Training	56 hours
Classroom Training	64 hours
Ongoing Support	Newsletter Meetings & Conventions Toll-Free Line Grand Opening Online Support Lease Negotiation Field Operations Site Selection Proprietary Software Franchisee Intranet Platform
Marketing Support	Co-op Advertising Ad Templates National Media Regional Advertising Social Media SEO Website Development Email Marketing

Operations

Additional details about running this franchise.

Is absentee ownership allowed?	No
Can this franchise be run from home/mobile unit? Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.	No
Can this franchise be run part time? Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.	No
# of employees required to run	5
Are exclusive territories available? Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened. What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.	Yes