What is the reported inventory value for Closet Storage Concepts?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
of $1,630 through December 2023. Payments paused after the Company collected $28,727, but are expected to continue and be paid in full. There is no interest charted on this note.
Inventories
Inventory is comprised primarily of raw materials (e.g., laminate, accessories, closet hardware) which have not been charged to specific jobs as well as logo and promotional items sold to the franchises. Due to the custom nature of the Company's business model, there are no finished goods inventory and work‐in‐progress inventory is minimal. Inventories are stated at the lower of cost or
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts's 2025 Franchise Disclosure Document, the inventory value at December 31, 2023, was reported as $49,546. This inventory primarily consists of raw materials such as laminate, accessories, and closet hardware that have not yet been assigned to specific jobs. It also includes logo and promotional items that are sold to franchisees.
The FDD notes that due to the custom nature of Closet Storage Concepts's business model, there is minimal work-in-progress inventory and no finished goods inventory. The inventory is valued at the lower of cost or market value, with the cost determined using the first-in, first-out (FIFO) method, and the market value determined by the most recent selling price.
For a prospective franchisee, understanding the inventory valuation and composition is crucial. It provides insight into the types of materials they will need to manage and the potential costs associated with maintaining an adequate supply. The FIFO method implies that the oldest inventory is assumed to be sold first, which can impact the cost of goods sold and ultimately the profitability of the franchise.
The inventory value can fluctuate based on the volume of sales, the cost of raw materials, and the effectiveness of inventory management practices. Franchisees should inquire about the typical inventory turnover rate and the franchisor's recommendations for maintaining optimal inventory levels to minimize storage costs and prevent stockouts.