Should I Open or Buy a Closet Factory Franchise in 2027?
A Closet Factory franchise can make sense if you want to run a design, manufacturing and installation business and can fund it, but the public numbers rose sharply in one year and the territory terms are described two different ways. The 2026 FDD summary on FDD Exchange lists a total initial investment of $531,500 to $903,500, an initial franchise fee of $65,500 and a royalty of 6.75% of gross receipts or $975 a week, whichever is greater. The 2025 FDD summary listed $392,500 to $663,500 and a $58,500 fee.
The case for: the 2026 summary reports a limited Item 19 with 2025 gross sales for 50 franchisees, and the brand has been franchising since 1985 per Entrepreneur. The case against: the quartile averages in that Item 19 run from $14,940,457 down to $1,268,702, a wide spread, and sales are not profit. The FDD summary also describes the territory as not exclusive, while Closet Factory's own franchise page calls territories exclusive. Resolve that in writing before you sign.
This is analysis, not financial advice. Read the current FDD, speak with current franchisees and have a franchise attorney review the agreement.
What it costs to open a Closet Factory
The figures below come from third-party summaries of Closet Factory's disclosure document on FDD Exchange, from the company's franchise page and from Entrepreneur's profile. We did not read the FDD itself, so confirm every number in the FDD you are given.
- Total initial investment (2026 FDD)$531,500 to $903,500
- Initial franchise fee (2026 FDD)$65,500, nonrefundable, paid in full at signing
- Royalty (2026 FDD)6.75% of gross receipts or $975 per week, whichever is greater
- Marketing fund and technology fee (2026 FDD)1.0% each, each up to 1.5%
- Minimum grand opening spend (2026 FDD)$40,000
- Transfer fee and renewal fee (2026 FDD)$18,500 and $7,000
- Liquid capital (company page)$250,000
- Cash and net worth listed by Entrepreneur$1,000,000 cash, $2,000,000 net worth
The 2026 summary says the average initial fee actually collected in fiscal 2025 was $58,500, and it also names the fee as $65,000 in one paragraph, so ask which figure applies to you. It adds a minimum local marketing spend of up to 15% of core receipts, an initial term of 5 years, and lists software license, AI usage, lead referral, audit, remedial training and management fees without amounts. Line-item amounts for the startup categories are Not published on that page: site, improvements, equipment, vehicles, signage, inventory, grand opening and three months of working capital.
What owners actually do
This is not a retail shop. Closet Factory's franchise page says each location designs, manufactures and installs custom systems for closets, home offices, garages, entertainment centers, pantries, wall beds and more. FranchiseHelp describes the owner as overseeing sales, manufacturing and installation from a single site.
- In-home design and sales. The 2026 FDD summary lists closet design and sales, and in-home installation, among the training topics. Franchisees use 3D design software and ClosetWare for sales, production and job tracking, per the company page.
- A production facility. The 2026 summary says training takes place at an operational production facility and covers manufacturing and installation. The company page says no woodworking knowledge is required, and FranchiseHelp says many franchisees had no carpentry or cabinetry background.
- Full-time involvement. The company page lists daily involvement in the franchise. Entrepreneur lists absentee ownership and part-time operation as No.
- Lead sources. 1851 Franchise reported in 2023 an exclusive relationship with Costco for lead generation. Check whether it still applies to your territory.
- Training. The 2026 summary lists 47 to 51 classroom hours and 39 to 44 on-the-job hours over about 10 business days. The company page describes a six-week program, two weeks in Dallas and four at your facility, while its own steps list says Los Angeles. Ask which is current.
What the Item 19 sales data shows
Closet Factory publishes a limited financial performance representation, but the figures are gross sales, not profit. They exclude costs and expenses.
- 2026 FDD Item 19 (2025 gross sales)50 franchisees in four quartiles; quartile averages from $14,940,457 down to $1,268,702
- 2025 FDD Item 19 (2024 sales)47 outlets open over a year; average $6,097,058, median $4,618,860
- Net profit or owner earningsNot published
Read the spread, not the headline. The top and bottom quartile averages in the 2026 summary are far apart, and the 2025 summary shows a median well below its average, which means a few large outlets pull the average up. The summaries mention medians, sales per person and sales per household for the newer filing but give no figures for them. Ask for the full Item 19 and for the outlets' costs. A July 2023 article from 1851 Franchise said no Item 19 was public then, so the disclosure is new to recent filings.
Territory: exclusive or not?
Closet Factory's franchise page says its territories are expansive, often covering multiple counties around a major metropolitan area, and describes them as exclusive so no other franchisee operates in the same area. Entrepreneur also lists exclusive territories as Yes.
The FDD summaries read differently. The 2026 summary describes a defined territory for a single traditional outlet that is not exclusive, and says the franchisor reserves the right to compete, sell through other channels, serve Special Accounts and operate other concepts inside or outside the territory. The 2025 summary likewise says no exclusive territory is guaranteed. Those are third-party summaries, and the marketing wording may mean exclusivity among franchisees only. That is exactly what a franchise attorney should read in Item 12 before you pay.
The company page lists open territories including Tucson, Detroit, Cincinnati, Memphis, New Orleans, Albuquerque, Reno and Green Bay in the U.S., plus Calgary and Vancouver Island. Availability changes, so confirm that your area is open.
Unit count and growth
- Outlets at end of 2025 (2026 FDD)92, all franchised; 0 company-owned
- Outlets in 2023 (2026 FDD)80 total: 74 franchised, 6 company-owned
- Outlets at end of 2024 (2025 FDD)92 total: 86 franchised, 6 company-owned
- Projected new franchised outlets4 (2026 FDD); 5 (2025 FDD)
- Transfers in 20255
The 2026 summary says the company sold its 6 California territories to a franchisee in 2025, which is why company-owned outlets fell to zero. Entrepreneur's headline lists 93 units and ranks the brand #464 in its 2026 Franchise 500, though the body of that profile says nearly 70 units. The company page says over 60 locations, and FranchiseHelp lists 73. Sources count differently, so use the FDD's Item 20 tables.
The projected openings are small compared with the base, which suggests a steady rather than rapid expansion. Closet Factory was founded in 1983 in Los Angeles and has franchised since 1985, per Entrepreneur and 1851 Franchise.
Open new or buy an existing territory
The sources we read do not publish resale prices or the approval process for buying an existing Closet Factory outlet, so we will not guess. What they do show: the 2026 summary lists a transfer fee of $18,500 and 5 transfers in 2025, and the renewal fee is $7,000.
- Open a new territory: you pay the initial fee and build the shop and fleet from scratch, the 2026 range of $531,500 to $903,500, with a ramp-up period before sales arrive.
- Buy an existing outlet: you can audit sales history and see the facility, but you inherit its lease, equipment, vehicles and reputation. Ask for the profit-and-loss statements, not only sales.
How to evaluate a Closet Factory offer
- Get the FDD and use the waiting period. Federal rule 16 CFR 436.2 requires the franchisor to furnish its disclosure document at least 14 calendar-days before you sign a binding agreement or make any payment.
- Compare Items 5, 7 and 19 yourself. Check the fee, the Item 7 line items and the full Item 19, especially the outlets at the low end of the quartiles.
- Call franchisees. Item 20 lists current and former franchisees. Ask about margins, installer labor, how leads convert and whether territory rights held up.
- Model royalty plus fees. Royalty, marketing fund, technology fee and local marketing are all charged on receipts, so add them before rent, materials and labor.
- Hire a franchise attorney. Territory wording, transfer terms and the 5-year term matter more than the brochure.
Questions people ask
How much does a Closet Factory franchise cost?
The 2026 FDD, as summarized by FDD Exchange, lists a total initial investment of $531,500 to $903,500, including a $65,500 initial franchise fee.
What is the Closet Factory royalty?
6.75% of gross receipts or $975 per week, whichever is greater, per the 2026 FDD summary. A marketing fund and technology fee of 1.0% each also apply.
How many Closet Factory locations are there?
The 2026 FDD summary reports 92 outlets at the end of 2025, all franchised. Other sources give different counts, including over 60 on the company page, so check Item 20.
Does Closet Factory publish what franchisees earn?
Only gross sales. The 2026 FDD summary shows 2025 gross sales for 50 franchisees by quartile, with averages from $14,940,457 to $1,268,702. Profit is Not published.
Is the territory exclusive?
The company's franchise page says territories are exclusive, but the FDD summaries say no exclusive territory is guaranteed and the franchisor reserves rights to compete. Get the exact wording in Item 12 reviewed by an attorney.
Do I need woodworking experience?
No, according to the company's franchise page. It describes the work as design, manufacturing and installation and lists sales, marketing or business management experience as helpful.
Is a Closet Factory franchise a good investment?
That depends on your territory, your capital and your skills, and this page cannot say. It is analysis, not financial advice. Read the FDD and consult a franchise attorney.
Sources
- FDD Exchange: Closet Factory 2026 FDD summary · Investment, fee, royalty, Item 19 (2025 sales), unit counts, territory, training
- FDD Exchange: Closet Factory 2025 FDD summary · Prior-year investment, fee, Item 19 (2024 sales), unit counts
- Closet Factory: Franchise Opportunities · Investment, liquid capital, territories, what each location does, training
- Entrepreneur: Closet Factory franchise profile · Cash and net worth, fees, units, Franchise 500 rank, ownership rules
- 1851 Franchise: Closet Factory deep dive (2023) · History, 2023 investment range, Costco lead relationship
- FranchiseHelp: Closet Factory · Owner role and unit count
- eCFR: 16 CFR 436.2 · 14-day disclosure document rule
Figures were read from the linked pages on October 31, 2026 and come from third-party summaries of the FDD, the company's franchise page and trade profiles, not from the FDD itself. Each year is stated with its figure. This is analysis, not financial advice; read the FDD and talk to a franchise attorney.
Top photo: Photo credit to Amy Carroll, Anne Sage and California Closets / CC BY 4.0 via Wikimedia Commons