Risk Score
Pending analysis
Investment Range
$305,000 - $428,500
Franchise Fee
$20,000
Total US Locations
113
Business Summary
Clothes Mentor operates retail stores that specialize in buying and selling gently used and new women's clothing and accessories. The stores primarily cater to value-conscious women seeking high-quality fashion items.
Corporate History
The Clothes Mentor concept was originally created in 2001 by OUAM, Inc. Clothes Mentor, LLC was later formed as a Delaware limited liability company in August 2006 and purchased the business assets, including the trademarks, from OUAM, Inc. The company began offering Clothes Mentor franchises in December 2006.
Financial Overview
Investment Range
$305,000 - $428,500
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$25,000
Royalty %
4%
Equipment Costs (Low)
$129,000
Equipment Costs (High)
$191,000
Working Capital
$22,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Clothes Mentor, LLC maintains a strong liquid position with current assets significantly exceeding current liabilities. The company reported net income of $1,281,105 in 2024 and $1,518,382 in 2023. However, substantial member draws of $1,498,387 in 2024 and $1,863,178 in 2023 have been made, which reduces member's equity. The company holds a receivable for Employee Retention Credits which could be subject to audit and review.
Financing Details
Clothes Mentor, LLC does not offer any direct or indirect financing to its franchisees. Franchisees are responsible for securing their own funding, and Clothes Mentor does not guarantee any notes, leases, or obligations for them.
Performance Metrics
Total US Locations
113
Franchised Units
113
Corporate Units
0
Avg Square Footage
2,500
Franchising Since
2006
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
2
Litigation Summary
Clothes Mentor, LLC was involved in two concluded arbitration cases, both naming Clothes Mentor and its affiliates (NTY Franchise Company, LLC, NTY Kids, LLC, Children's Orchard, LLC) and certain officers and employees. The first case, commenced in May 2020 by CSW Strategic Solutions, LLC, alleged breach of contract, franchise act violations, fraud, deceptive trade practices, and negligent misrepresentation, seeking over $1,000,000. It was settled in August 2021 for $400,000. The second case, commenced in August 2019 by Transcendent Business Holdings, LLC, also alleged breach of contract, franchise act violations, fraud, and negligent misrepresentation, seeking over $1,000,000. This case was settled in January 2020 for $650,000. Both settlements included a full release of claims against Clothes Mentor and its affiliates. Clothes Mentor has no other litigation required to be disclosed.
Bankruptcy History
Clothes Mentor, LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew, Clothes Mentor franchisees must provide written notice at least 180 days before the agreement ends. They must be in good standing, having complied with all material provisions of the current franchise agreement and paid all monetary obligations. Franchisees are required to make reasonable capital expenditures to remodel, modernize, and redecorate their store, and replace fixtures and equipment to meet current brand standards, or secure a new approved location and build it out to current specifications. The franchisee and their store manager must satisfactorily complete any new or refresher training programs. A renewal fee of $10,000 must be paid, and the franchisee must sign Clothes Mentor's then-current standard franchise agreement (with the renewal fee replacing the initial fee) and a general release of claims.
Training & Support Program
Franchisor Assistance
Clothes Mentor, LLC provides pre-opening support including assistance with site evaluation and selection, prototype drawings and specifications for the store, and access to the Operations Manual. Franchisees receive initial training in two sessions covering business planning, financial management, real estate, store development, marketing, personnel, QuickBooks, operations, loss prevention, inventory management, customer service, and POS system training. For first-time Clothes Mentor franchisees, a field consultant assists with the opening and initial operations for 3-4 days. Ongoing assistance includes periodic field consultant visits and telephone conference calls, advisory services on store operations, products, marketing, and administrative procedures. Clothes Mentor also provides updated Operations Manual materials and manages the National Marketing and Promotional Fund (NMF Fund) for advertising and public relations. Franchisees are required to use Clothes Mentor's designated Point-of-Sale (POS) System, including proprietary software, and participate in an e-commerce program.
Initial Training Hours
102
Training Location
Plymouth, MN
Ongoing Support
After opening, Clothes Mentor franchisees receive ongoing support through periodic field consultant visits and telephone conference calls. They also get advisory services on store operations, including guidance on products, purchasing and marketing clothing and accessories, marketing assistance, sales promotion programs, and general operating procedures. Clothes Mentor regularly provides updated materials for the Operations Manual and manages the National Marketing and Promotional Fund (NMF Fund). Franchisees are required to use the Clothes Mentor website and extranet system, and participate in a designated e-commerce program.
Franchise Requirements
Ideal Candidate Profile
Clothes Mentor seeks franchisees who possess strong character, aptitude, attitude, business ability, and financial capacity. Franchisees, or their approved operating manager, must assume direct, full-time supervision of the store and cannot engage in other significant management responsibilities that would conflict with their obligations. The ideal candidate will be actively involved in store operations, including overseeing their operating manager if one is hired, and will have successfully completed Clothes Mentor's designated training program.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Exclusive
Territory Size Requirements
Clothes Mentor franchisees receive an exclusive territory (Protected Area) determined by natural trade areas and population numbers. This territory will be a 2-to-6-mile radius from a specific intersection. In metropolitan areas with populations over 200,000, the Protected Area will have a minimum population of 50,000. In smaller markets, the Protected Area will have a minimum population of approximately 25,000.
Staffing Notes
Clothes Mentor franchisees are responsible for hiring all store employees, including determining their employment terms, compensation, and scheduling. Franchisees must implement an employee training program in line with Clothes Mentor's requirements and maintain a staff sufficient to meet operational standards. The store must always be under the direct supervision of the franchisee (or a Principal Owner) or an approved operating manager who has completed the training program. If an operating manager is hired, the franchisee or Principal Owner must remain actively involved in store operations, providing oversight to the manager. The person in day-to-day supervision (whether the owner or manager) must be full-time and not have other significant management responsibilities that conflict with their store duties.