Does Closet Storage Concepts guarantee that the markup on advertising materials will not result in a profit for them?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
From time-to-time purchase and place advertising promoting Closet & Storage Concepts franchisees and the franchise products and services sold by them at our sole discretion. We may also provide advertising and promotional or informational materials to be used by franchisees. You will pay us for the cost of the materials furnished by us plus a mark-up of twenty percent (20%) to cover our shipping and handling costs. The mark-up may result in a profit to us.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–38)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts Franchise Disclosure Document, Closet Storage Concepts does not guarantee that the markup on advertising materials will not result in a profit for them. In fact, the document states that franchisees will pay Closet Storage Concepts for the cost of advertising and promotional materials furnished by them, plus a markup of twenty percent (20%) to cover shipping and handling costs.
The FDD explicitly states that this markup may result in a profit for Closet Storage Concepts. This means that in addition to covering the costs of shipping and handling, Closet Storage Concepts could potentially generate revenue from the advertising materials they provide to franchisees.
This arrangement is fairly common in franchising, where franchisors often act as a supplier for certain goods and services. While the 20% markup is intended to cover shipping and handling, the FDD is upfront about the possibility that Closet Storage Concepts may realize a profit from these transactions. Prospective franchisees should consider this when evaluating the overall cost of operating a Closet Storage Concepts franchise.