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Clothes Mentor Franchise ProfileRetail Franchises > Clothing Stores |
What is the Initial Investment for a Clothes Mentor Franchise?
The initial investment to open a Clothes Mentor franchise ranges from $272,000 to $395,500. This includes a franchise fee of $25,000. Potential franchisees should also prepare for a cash requirement of $50,000 to $70,000 and a net worth requirement of $200,000 to $500,000. Understanding these financial commitments is crucial for aspiring owners as they assess their readiness to enter the franchise business.
What Are the Ongoing Fees for a Clothes Mentor Franchise?
Clothes Mentor franchisees are subject to ongoing fees that include a royalty fee of 4% of gross sales and a marketing fee of 5%. These fees contribute to the brand's national marketing efforts and ongoing support systems, ensuring franchisees have the resources they need to succeed. It's important for potential franchisees to factor these fees into their financial planning for sustainable operations.
What is the Average Revenue Potential for a Clothes Mentor Franchise?
On average, a Clothes Mentor franchise generates annual revenue of approximately $772,734, with a median revenue of $715,258. The revenue can vary significantly, with some units reporting as low as $142,920 and others achieving up to $2,119,151. This wide range highlights the potential for profitability, but also emphasizes the importance of location, management, and market conditions in determining a franchise's success.
How Quickly Can You Expect to Break Even with a Clothes Mentor Franchise?
Franchisees can expect to break even within 12 months of opening their Clothes Mentor location. With an investment payback period of around 14 months, this timeline suggests that the business can start generating a return relatively quickly. However, achieving this may depend on effective management, marketing strategies, and understanding the local market dynamics.
Clothes Mentor Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Clothes Mentor Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 125 | 122 | 120 |
| Net Change YoY | -3 | -2 | |
| Franchised Units | 125 | 122 | 120 |
| Net Change YoY | -3 | -2 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
The Clothes Mentor franchise presents a compelling investment opportunity with a low initial investment ranging from $272,000 to $395,500. The initial franchise fee is set at $25,000, with ongoing royalty and marketing fees at 4% and 5% of gross sales, respectively. Prospective franchisees should prepare for a cash requirement between $50,000 and $70,000 and a net worth ranging from $200,000 to $500,000 to ensure adequate financial backing.
Revenue Potential
Franchisees can expect a strong revenue potential, with average annual revenue per unit reported at $772,734. The median annual revenue stands at $715,258, illustrating the brand's ability to generate consistent sales. Notably, annual revenue can vary significantly, with the lowest reported at $142,920 and the highest at $2,119,151, indicating opportunities for higher-performing locations.
Profitability Metrics
The financial performance of Clothes Mentor units demonstrates solid profitability, with a gross profit margin of 66.3%. Key expenses include a cost of goods sold (COGS) of $260,439, alongside operating expenses totaling approximately $2,471,863. The EBITDA for an average unit is reported at $1,518,382, reflecting a healthy 19.6% of revenue, which suggests a favorable return on investment for franchise owners.
Breakeven and Payback
Franchisees can anticipate a breakeven period of around 12 months, allowing for a relatively quick recovery of initial investments. The investment payback period is estimated at 14 months, which is advantageous for those looking to see a return on their investment in a timely manner. This swift payback can be appealing for aspiring entrepreneurs assessing the risk of franchise ownership.
Franchise Growth
The Clothes Mentor franchise has shown a steady presence in the market, with 125 franchised units in 2021, decreasing slightly to 120 by 2023. This trend indicates a stable yet cautious approach to growth, suggesting that while the brand maintains a solid franchise base, it may be focusing on optimizing existing locations rather than rapid expansion.
Corporate Structure
Clothes Mentor operates as a franchise model without any corporate-owned units as of 2023. This structure allows franchisees to benefit from a well-established brand while enjoying the autonomy of business ownership. The lack of corporate units emphasizes the focus on empowering franchisees to manage their own operations, fostering a strong franchise community dedicated to mutual success.
Frequently Asked Questions
The initial investment for a Clothes Mentor franchise ranges from approximately $272,000 to $395,500. This includes the initial franchise fee of $25,000 and other startup costs.