What was the cost of sales for Closet Storage Concepts, as reported in the financial statement?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
nt prior to other obligations, therefore, the advances are classified as long‐term debt on the balance sheet. At December 31, 2023, there were no balances owed to the stockholder.
The Company's sole stockholder owns a separate entity that, in 2014, acquired substantially all of the assets and operations of a manufacturing entity that contractually supplies all of the "More Space Place" franchises. During the year, the Company made purchases from the entity in the amount of $38,245, which are included in materials and supplies in costs of sales. The entity also provided franchisee support in the amount of $545, included in general and administrativ
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, specific details regarding the cost of sales are not present in the provided excerpts. While the document includes financial statements and auditor's reports for the years 2022 and 2023, it does not explicitly state the total cost of sales for Closet Storage Concepts. Instead, the excerpts focus on accounting practices, related party transactions, retirement plans, lines of credit, and long-term debt obligations. There is also a mention of purchases from an entity owned by the sole stockholder, which are included in materials and supplies within the cost of sales. However, the total cost of sales figure is not disclosed.
Without a clear figure for the cost of sales, it is difficult for a prospective franchisee to assess the profitability and efficiency of Closet Storage Concepts' operations. The cost of sales is a critical component in determining the gross profit margin, which indicates how efficiently a company manages its production and sales costs. Understanding this figure would allow potential franchisees to better evaluate the financial health and potential return on investment of a Closet Storage Concepts franchise.
To gain a comprehensive understanding of Closet Storage Concepts' financial performance, a prospective franchisee should directly request the full financial statements, including the schedule of cost of sales, from the franchisor. This will provide a clearer picture of the company's expenses related to producing and selling its products. Additionally, it would be beneficial to inquire about the factors that influence the cost of sales, such as material costs, labor expenses, and manufacturing overhead, to better assess potential risks and opportunities associated with the franchise.