Does Closet Storage Concepts' officer, Robert Lewis, have an ownership interest in both Closet Storage Concepts and its affiliate?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to earn a profit from the sale of these items to our franchisees. Our officer, Robert Lewis, owns an interest in us and in our affiliate.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–26)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, Robert Lewis, an officer of Closet Storage Concepts, holds an ownership interest in both Closet Storage Concepts and its affiliate. The affiliate, MSP Manufacturing, is an approved supplier for several items that franchisees are required to purchase. These items include cabinet components, Murphy bed frames, hardware and accessories, mattresses, closet systems components, and decorative doors and drawer fronts.
This arrangement means that Robert Lewis potentially benefits financially from franchisee purchases from MSP Manufacturing, in addition to any benefits he receives from his ownership in Closet Storage Concepts itself. While the FDD does not specify the extent of Robert Lewis's ownership interest in either entity, the arrangement presents a potential conflict of interest.
Prospective franchisees should be aware of this relationship, as it could influence the pricing, quality, or availability of the specified products. It is common in franchising for franchisors or their affiliates to be approved suppliers, but transparency regarding ownership interests is important for franchisees to assess potential biases or conflicts. Franchisees may want to inquire about the specific percentage of ownership Robert Lewis holds in each company to better understand the potential impact on their business.