The Tailored Closet
The Tailored Closet offers mobile organizing solutions for homes and businesses, specializing in closet and storage system installations. Known for tailored design and efficient space utilization, it operates in the home organization and storage accessories market.
The Tailored Closet franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a THE TAILORED CLOSET ® franchised business ranges from $177,130 to $270,650. This includes $74,950 to $76,450 that must be paid to the franchisor or its affiliates. [p.1]
What is the initial franchise fee?
The Initial Franchise Fee is $19,950 for a new franchisee who is not party to another franchise agreement with the franchisor [p.92]. This fee includes initial training and the Start-up package [p.22], and it is nonrefundable [p.92].
What are the ongoing royalty and advertising fees?
Ongoing royalties include both variable sales-based royalties, which vary based on franchise agreements and may de-escalate with certain sales thresholds, and fixed rate royalties, which are flat monthly fees determined by the franchise agreement. These fixed rates may escalate during a new franchisee ramp-up period or periodically for inflation [p.191]. Advertising fees and other ongoing fees are deducted directly from your bank account and are nonrefundable [p.20].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The FDD does not provide information about the length of the initial franchise agreement or details on the renewal process beyond stating that unless otherwise agreed in writing, a holdover period may occur if no new agreement is signed before expiration [p.97].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, a franchisor can refuse to permit the transfer of ownership of a franchise except for good cause [p.5]. Good cause includes but is not limited to unspecified factors. This means you would need to consult the specific terms of your franchise agreement to understand the exact conditions under which transfers are allowed or denied.
On what grounds can the franchisor terminate the agreement?
The franchisor may terminate the agreement on any grounds available by law [p.67]. Additionally, the franchisor can terminate for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and failing to cure such failure after being given written notice and a reasonable opportunity to do so [p.5].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD provides guidance on working capital needs but does not detail specific net worth or liquid capital requirements for qualifying as a franchisee.
Do I get an exclusive or protected territory?
You receive a protected, but not exclusive, territory. The franchisor will not establish another franchised business in your territory that sells and installs organizing units and storage and organizing accessories using their System and Marks. However, they may still compete with you from outlets they own within the same system [p.36]. Additionally, while your territory is generally protected against other franchisees, there's no guarantee that another franchisee won't breach their agreement to operate in a different territory [p.36].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program for the franchisee and up to one employee at no additional charge [p.22]. This includes access to proprietary information, though the materials remain their property [p.35]. The program is conducted as needed, usually every other month, and may require attendance at regional meetings which are currently optional but can be made mandatory by the franchisor [p.35]. Additionally, the franchisor reserves the right to require additional training courses, seminars, or conferences that they deem relevant for successful operation, with all associated costs borne by the franchisee [p.35].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts. The FDD provides information on terminated franchises but does not give a total number of franchised outlets or explicitly state how many have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information for existing outlets, but only if there is a reasonable basis for this information and it is included in the disclosure document. Additionally, if you are purchasing an existing outlet, the franchisor may provide actual records of that outlet's performance [p.47]. However, the franchisor does not make any financial performance representations or authorize its employees or representatives to do so [p.47].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the products and services that the franchisor has approved in writing as specified in the Confidential Operations Manual. You must purchase all required components for organizing units and storage accessories from the franchisor, their affiliates, or approved suppliers [p.24]. This includes items like those used for closets, pantries, home offices, storerooms, utility rooms, basements, laundry rooms, and attics [p.24].