Are you willing to invest in the Plato’s Closet franchise but have qualms about it? Then you are at the right place.
In this article, we are going to discuss the significant facts related to the Plato’s Closet franchise, like its profitability, cost, fees, and everything that needs to be known before investing in this franchise. So, let’s begin.
About Plato’s Closet
Plato’s Closet is a leading second-hand brand-named clothes and accessories store in North America. They sell quality used and new brand-name teen and young adult clothes and accessories.
Plato’s Closet was founded in 1998, and after one year of establishment, it started offering franchises. Today, it has more than 475 units across North America and is growing rapidly.
The business model of Plato’s Closet franchise is very flexible. They never require any prior experience, and the franchisee doesn’t need to follow any long or rigorous process to buy the franchise.
However, franchisees have to arrange the cost of the investment on their own because Plato’s does not provide any direct or indirect finance option, but they allow you to take third-party finance.
Moreover, they also provide a comprehensive training program and different types of support to franchisees to enhance the growth of the franchise business.
Also, the franchisees receive an “exclusive territory” surrounding the location of the store.
Plato’s Closet Franchise Model
| Cost Or Fee | Amount |
|---|---|
| Initial Investment | $150,000 and $500,000 |
| Franchise-Fee | $25,000 |
| Liquidity | $142,210 |
| Area Requirement | N/A |
| Total Outlet | 475 |
Plato’s Closet Revenue & Profit
The revenue and profit of different franchises may vary depending on the size, location, management of the store, etc.
However, on average, Plato’s Closet franchise owners make an annual $1,200,000 in revenue.
The best thing about Plato’s Closet franchise is that it ramps up really quickly, and this franchise owner earns revenue in millions right in one-two years of opening.
How Much Does A Plato Closet’s Franchise Owner Earn?
According to the data given in the FDD of Plato Closet, the company made average gross sales of $1,227,230 in the year 2021. The average gross profit was estimated to be $777,664 for the same year.
However, this also depends on factors such as the location of the franchise and how it is operated.
Failure Rate Of Plato Closet Franchise
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 483 | 485 | +2 |
| 2021 | 485 | 489 | +4 |
| 2022 | 489 | 500 | +11 |
For the Franchised outlets:
- In 2020, the growth rate was (2)/483×100≈0.41%
- In 2021, the growth rate was (4)/485×100≈0.82%
- In 2022, the growth rate was (11)/489×100≈2.24%
According to the above-mentioned data, we can see that the franchised outlets for Urban Air grew from 2020 to 2022, showing a growth rate between 0.41% and 2.24%.
Training & Support Of Plato’s Closet
Plato’s Closet provides a comprehensive training program to all new franchises. The training program is conducted in two phases at Winmark’s training center.
The first phase consists of training-induced instruction related to the management and operation of a privately-owned retail store, real estate matters, business development plans, how to buy used products, and orientation.
In the second phase, they give you a guide on sales and marketing, store management, computer operation, personnel issues, and other topics that the franchisors want to explain to you related to the business.
Additionally, they also provide store opening assistance on the day before and the opening day of the store.
Term Of Agreement & Renewal
The length of the term of the franchise agreement of Plato’s Closet is 10 years. After the expiry of the term, the renewal of the agreement is available for another term of 10 years.
However, franchisees have to accomplish the requirements as directed by the franchisors. And also, the franchise should be in good standing and should be generating a decent amount of profit.
Plato’s Closet Financial Assistance
Plato’s Closet does not offer direct or indirect financing. And the franchisors are not responsible for any franchisees’ promissory note, lease, or other obligations.
However, Plato’s Closet provides the option of third-party finance or in-house financing.
Plato’s Closet Comparison
| Company | Plato’s Closet | Apricot Lane Boutique |
|---|---|---|
| Founded In | 1998 | 1996 |
| Initial Investment | $150,000 and $500,000 | $80,000 – $361,800 |
| Franchise-Fee | $25,000 | $39,500 |
| Liquidity | $142,210 | $80,000 |
| Total Outlet | 475 | 82 |
| Annual Revenue | $75 Million | $7 Million |
Frequently Asked Question
How many Plato’s Closet franchises are there?
Plato’s Closet has more than 475 units across the U.S.
Does the Plato’s Closet franchise offer financial assistance?
Yes, the Plato’s Closet franchise offers third-party finance to franchisees.
Where is Plato’s Closet headquarters?
The Plato Closet’s headquarters is located in Minneapolis, MN.
Is Plato's Closet a franchise or a chain?
Plato’s Closet is part of a unique national retail resale chain that buys and sells guys’ and girls’ clothing under the name of the Winmark brand.
How much does the Plato's Closet franchise cost?
To buy the Plato’s Closet franchise, you’ll require an investment of $150,000 and $500,000, and $25,000 as an initial franchise fee.
Who owns Plato Closet?
Plato Closet is owned by Winmark Corporation, which also acquired 4 other franchised-based retail companies.
Who founded Plato Closet?
Lynn and Dennis Blum are the founders of Plato’s Closet. They opened their first outlet in Columbus, Ohio.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.