Must the franchisee use an accounting or bookkeeping system designated or approved by the franchisor?
YesItem 11
We require that you obtain Quick Books accounting software.
From the filings
+10.256% units YoYMandated tech stackHQ-led decisions
Closet Factory
Financial servicesSoftware purchasing at Closet Factory is controlled at the headquarters level, with Co-CEO and CFO John La Barbera listed as a key executive in the 2025 FDD. The franchise mandates ClosetWare and QuickBooks by Intuit Inc. across its system. With 92 total units—86 franchised and 6 company-owned—and an average unit volume of $6,097,058, the addressable market for software vendors is concentrated but high-value.
For software vendors selling into US franchise brands.
Live signals
Total units
92
86 franchised
Unit growth YoY
+10.256%
vs prior filing
AUV
$6.10M
Item 19, 2025
Royalty
6.75%
of gross sales
Ad fund
—
national + local
Initial fee
—
per unit
Investment range
$393K–$664K
all-in, Item 7
Procurement
Approved supplier
from the filing
Item 19
Claims
from the filing
Ongoing fee load
What the operator pays every month
The recurring percentage of gross sales named in this filing. It is a floor, not a total — the filing discloses one of the two headline fees.
6.75%+of gross sales (FY2025)
15% reference
Franchisor behaviours
What the franchisor requires
22 requirements the franchisor states in this filing, each in its own words; 2 explicit no's; 10 questions the text does not settle, which is not a no.
Accounting
Does the franchisor have direct or independent electronic access to the franchisee's financial, sales or customer records?
YesFranchise agreement
Franchisor reserves the right to use, and to have full access to, all computer and any other systems, and the information and data they contain, including, but not limited to, all business records, whether written, electronic or otherwise.
Must the franchisee submit periodic financial statements (monthly, quarterly or annual) to the franchisor?
YesFranchise agreement
within 45 days after the end of each fiscal year, an unaudited fiscal year-end balance sheet and income statement for Franchisee’s Closet Factory Outlet, prepared in accordance with generally accepted accounting principles, and verified and signed by Franchisee
How the franchisor buys
Is the franchisor or an affiliate itself a supplier of required products, services or systems?
YesItem 8
We are an Authorized Supplier for specific jigs and manufacturing pieces.
Does the franchisor reserve the right to change designated suppliers or systems at any time?
YesFranchise agreement
Franchisor has the right to specify Products Franchisee must carry and Services Franchisee must provide.
How much revenue did the franchisor and its affiliates earn from franchisee purchases in the last fiscal year?
353793Item 8
our revenue derived from franchisees’ purchases from us and other Authorized Suppliers was $353,793 or 1.89% of our total revenues.
Does the franchisor or an affiliate receive rebates, commissions or other revenue from designated or approved suppliers?
YesItem 8
We and our affiliates reserve the right to receive rebates, incentive amounts, discounts and other economic benefits from any supplier.
Item 8 gives this proportion in one of two shapes: separate percentages for establishing the business and for operating it, or one figure covering "establishing and operating" together. Where they are separate, answer with the operating percentage; where the passage gives only the combined figure, answer with that. What percentage of the franchisee's purchases must come from designated or approved suppliers?
1Item 8
we would estimate that the proportion of required purchases and leases to all purchases and leases by you in the establishment and operation of your Closet Factory franchise to be 1-2%.
Does the franchisor charge a fee to evaluate a proposed supplier?
YesItem 8
We can require you to pre-pay any reasonable charges connected with our review and evaluation of any proposal.
Can a franchisee propose a new supplier for the franchisor's approval?
YesItem 8
You can request the approval of an item, service or supplier by notifying us in writing and submitting the information or materials we request.
Franchise management
Must the franchisee participate in a customer-satisfaction or net-promoter survey program?
YesFranchise agreement
Franchisee agrees to request Franchisee’s customers to participate in any surveys performed by or on behalf of Franchisor, using forms prescribed by Franchisor from time to time.
Does the franchisor conduct periodic inspections, audits or evaluations of the franchised business?
YesFranchise agreement
Franchisor and/or Franchisor’s agents will have the right at any time during business hours, and without prior notice to Franchisee, to inspect and/or audit properties, assets, premises, business records relating in any way to Franchisee’s Closet Factory Outlet and the books and records of any person(s), corporation…
Can the franchisor change the operations manual and brand standards unilaterally?
YesFranchise agreement
Franchisee, therefore, agrees and anticipates that the Manuals and the Closet Factory System may be changed by Franchisor, from time to time in Franchisor’s Business Judgment.
Must the franchisor approve the franchisee's site or location before opening?
YesFranchise agreement
Franchisee must not operate a Closet Factory Outlet, use any of the Marks from or at any location, or make any commitments about a site until Franchisee has Franchisor’s written site acceptance.
Marketing
Is a minimum grand opening advertising spend required?
YesFranchise agreement
Franchisee agrees to spend at least Twenty Thousand Dollars ($20,000) on a grand opening marketing program over 3 months, commencing with the opening of Franchisee’s Closet Factory Outlet.
Is the franchisee required to spend a minimum amount on local advertising or marketing, as a percentage of sales or a fixed amount?
YesItem 11
You must spend for local advertising and promotion of your Closet Factory Outlet each royalty period the amount described in Item 6.
Must the franchisee participate in a regional advertising cooperative when one exists?
YesItem 11
If one or more FMGs (local, regional, national, or otherwise) are formed covering your Closet Factory Outlet, you must join and actively participate and contribute any required amounts.
Operations
Must equipment be purchased from designated or approved suppliers?
YesItem 8
You must purchase, use and offer such Designated Equipment, Products and Services, as are specified by us.
Payments
Are royalties and other fees collected by automatic bank debit (ACH or electronic funds transfer) from the franchisee's account?
YesFranchise agreement
All royalties owed and any other amounts designated by Franchisor must be received or credited to Franchisor’s account by pre-authorized bank debit by end of business on the 3rd business day after the end of each week.
People
Does the franchisor require minimum staffing levels or specific roles?
YesItem 15
Your Closet Factory Outlet must be personally managed on a full-time basis by a supervisorial or managerial employee who has successfully completed mandatory training and met our then-current standards.
Point of sale
Does the franchisor have independent access to the data in the franchisee's POS or computer system?
YesFranchise agreement
Franchisor reserves the right to use, and to have full access to, all computer and any other systems, and the information and data they contain, including, but not limited to, all business records, whether written, electronic or otherwise.
Training
Is attendance at an annual convention or conference mandatory for the franchisee?
YesFranchise agreement
Franchisee is required to attend all meetings designated by Franchisor as mandatory (including, without limitation, each Closet Factory Regional Leadership Conference), unless otherwise excused by Franchisor.
The filing answers no to 2 questions
- Is there a franchisee advisory council, association or committee?Item 11
- Is the franchisee prohibited from operating its own website or social media accounts, or required to use pages the franchisor provides?Item 11
The vendor opportunity at Closet Factory
Closet Factory operates 92 locations across the United States, with 86 franchised units and 6 company-owned outlets. The system grew unit count by 10.256% year-over-year, signaling active expansion. For software vendors, the total addressable market is these 92 units, each generating an average unit volume of $6,097,058. The royalty rate stands at 6.75%. While the initial franchise term length is not disclosed in the 2025 FDD, the combination of high AUV and recent growth suggests a franchise system with capital to invest in operational efficiency—making it a relevant target for SaaS vendors selling into franchise networks.
Who controls software purchasing
According to Item 1 of the 2025 FDD, John La Barbera serves as Co-Chief Executive Officer and Chief Financial Officer. In a system of this size, the CFO typically holds budget authority for technology procurement, especially when systems are mandated from the top. No other HQ executives are listed in the available data, and no multi-unit operators were mapped in our corpus. This points to a centralized purchasing model where vendor pitches should be directed at the corporate office in California, not individual franchisees.
Mandated and current tech stack
Closet Factory mandates two specific technology systems across its network. ClosetWare serves as the operational backbone, likely handling design, project management, or manufacturing workflows specific to the custom closet industry. QuickBooks by Intuit Inc. is the mandated financial software. Vendors offering complementary solutions—such as CRM, inventory management, or analytics—should be prepared to integrate with or augment this existing stack. Any pitch must acknowledge these incumbents and demonstrate clear interoperability or a compelling replacement case.
Procurement, renewals, and timing
The 2025 FDD does not include an extract from Item 8, which normally details procurement requirements such as designated suppliers, approved supplier lists, or rebate structures. This absence means the procurement model remains unknown from publicly available data. Similarly, Item 17 renewal provisions were not extracted, and the initial franchise term is listed as "n/a" years. Without term length or renewal windows, predicting contract cycles is not possible based on the current FDD alone. Vendors should approach Closet Factory with a discovery-oriented posture, seeking to understand these mechanics directly.
How to read the Closet Factory FDD
The Franchise Disclosure Document for Closet Factory was filed with state franchise regulators in 2025. The embedded viewer below provides full access to the document. Key sections for software vendors include Item 1 (business background and executives), Item 11 (franchisor assistance and mandated systems), Item 8 (restrictions on sources of products and services), and Item 17 (renewal, termination, and transfer). Reviewing these sections will clarify the decision-making structure and any contractual obligations that affect technology adoption. For a ranked target list of franchise systems aligned with your software category, FranCloud can help.
Questions vendors ask
Closet Factory, answered from the filing
The 2025 FDD lists John La Barbera, Co-Chief Executive Officer and Chief Financial Officer, as a principal officer. As CFO, he is the likely budget authority for software procurement decisions.
Closet Factory mandates ClosetWare as its operational system and QuickBooks by Intuit Inc. for financial management, per the most recent FDD.
The system comprises 92 total units: 86 franchised locations and 6 company-owned outlets, according to the 2025 FDD.
The procurement model is not disclosed in the most recent FDD. Item 8, which typically outlines designated or approved supplier requirements, provided no extract.
Renewal timing is unclear. The FDD does not disclose the initial franchise term length, and Item 17 renewal signals were not extracted, making contract cycles difficult to predict.
The FDD was filed with state franchise regulators in 2025. You can review it directly in the embedded PDF viewer below.
Source
Read the filing itself
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FDD alert
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Operator footprint
Who runs the locations
71 operators run 71 mapped locations. 0 of them are multi-unit. Aggregate counts from the filing; no names.
Operators by units owned
Single-unit71
Top states by locations
| FL | 6 |
|---|---|
| CA | 5 |
| TX | 5 |
| VA | 3 |
| MI | 2 |
Related Financial services brands
Primary franchise filings · updated June 2026. Every figure is source-traceable and QA-checked.