Home improvement franchises, in general, are becoming more and more attractive, especially to new entrepreneurs. This is partly due to their relatively low operating costs and scalable nature. However, with many categories to choose from, it’s not always easy to decide which to partner with that matches your business interests and expectations in the best way possible. You should also ensure they accept inquiries from your state since some reputable home improvement franchises like Closet & Storage Concepts only offer franchise opportunities in select states.
So, you’ve been thinking about becoming your own boss by owning a Closets By Design Franchise? You’re probably wondering how much it will cost you to get started and whether it’s a viable business for profits and success. Well, wonder no more. This article will provide all the relevant information you need to know about them, including detailed information about the cost of their franchise opportunities and whether you meet the qualifications of an ideal investor. Read on!
Who are Closets By Design?
Closets By Design started its operations in 1982 with a business model focusing on a range of home improvement services, including designing, building, and installing custom closets, garage cabinets, home offices, laundries, pantries, etc. They have a broad category of customizable finishes, accessories, and hardware customers can choose from. They began their Closets By Design Franchising, Inc. (CBDF) in 1998, which has seen them grow to over 70 locations in the US and Canada. Franchisees are expected to run a sales and retail business dealing in their various services in specified territories.
Closets By Design Franchise Costs & Fees
Knowing the costs and fees associated with buying a particular franchise is essential to being part of them. The costs and fees will be your ticket to accessing various critical rights to enable you to run your business operations similar to the franchisor and other franchisees. You should note that most of the costs and fees will be paid upfront, while some will be ongoing. Some of the costs and fees you’ll be expected to pay to be a franchisee with Closets By Design include;
- Initial Franchise Fee: You’ll be required to pay $20,000 plus $1,000 per 10,000 household territory fee.
- Initial Investment: Your total initial investment will be $152,000 on the lower side and $503,000 on the higher side. This includes a minimum cash investment of at least $100,000 – $200,000 on either side.
- Net Worth and Liquidity: You’ll need a net worth (total assets – total liabilities) of at least $500,000 and liquidity (on-hand capital) of at least $125,000.
- Royalty Fees: 6.75% based on monthly gross revenues or a minimum royalty of $3,000 per month.
- Advertising Expenditures: 2.25% charged on monthly gross revenues
- Late Reporting Charge: $250
- Late Quarterly Financial Statement Charge: $500
Veterans investing in a Closets By Design Franchise are eligible for a 5% discount off the initial franchise fee.
What Else to Know Before Opening a Closets By Design Franchise?
Having your finances in order is the first step to adequately preparing and meeting the upfront cost expectations of the franchisor. To be part of the Closets by Design franchise means you should be financially capable of paying their initial franchise fee and all other needed startup costs. What else to know or expect if your finances are sound? Before agreeing to any financial commitment, it’s recommended that you do your due diligence to be sure that the opportunity is right for you and your business goals. A great way to fulfill this is to research the Closets by Design franchise brand in your locality to gauge if it will do well. Evaluate and assess their local area competition to understand if your franchise will have growth opportunities to tap into.
Another effective way to establish if opening a Closets by Design franchise is a viable option for you is by talking to their existing franchisees to gain more insights into what it means to be a one. This is a crucial part of your due diligence process and will give you an accurate picture of what you’ll be doing, including potential challenges and if you can manage them.
Lastly, once you’ve decided to buy the franchise, it’s highly recommended that you involve a franchise lawyer. They can come in handy in many ways in such a scenario, including helping you prepare or understand any paperwork involved and, most importantly, representing your best interests in negotiations and court if the need arises.