Growing Without Growing

Closets by Design perfects business model, ready to re-franchise

(Friday, February 02, 2007) - While tripling revenues over five years without increasing the number of franchises, focusing instead on infrastructure and best practices, Closets by Design is officially re-launching its franchise opportunity.

"After developing home organization systems for millions of U.S. homeowners, we have done a bit of "remodeling" ourselves," said Jerry Egner, president of Closets by Design, the nation's leading home organizing franchise. "We took a step back in 2002 and decided to slow franchise growth to focus on perfecting our marketing, sales, manufacturing and installation processes. Now, we're ready to open the door to entrepreneurs wanting to grab a share of the $3 billion home organization industry."

During the strategic franchise sales hiatus, the company focused on educating existing Closets by Design franchisees on all aspects of the business to ensure maximum profitability. System-wide sales figures are evidence that the strategy worked; despite limiting the number of operating franchises to 27 for the past five years, revenues nearly tripled from $23 million in 2002 to more than $65 million by the end of 2006. Closets by Design projects system-wide sales of $80 million in 2007, with an additional $21 million from the company's three corporate locations.

"After we launched the franchise opportunity in 1998, we opened 18 franchise locations grossing $17 million in revenues in just 24 months," noted Egner, a pioneer in the closet industry with 25 years experience. "Although the tremendous growth was exciting, we didn't want to expand at a rate that made it impossible to properly support all of our franchisees. Now we can say that our support systems and business model are stronger than ever and ready for the next phase of growth."

Still, the company remains cautious and conservative in its approach to growth, projecting to open six new Closets by Design franchises in 2007 and an additional 12 locations in 2008. The company offers territories that encompass 300,000 – 600,000 households.

A look inside the closet

Closets by Design offers homeowners comprehensive solutions to all their organizational needs in a short and simple process, designing, building and installing custom closets, garage cabinets, home offices, wall units, laundries, pantries, wardrobe mirror doors, and other home organization systems with a wide selection of finishes, accessories and hardware.

The Closets by Design process is designed to be quick and hassle-free for the customer. Phone inquiries are quickly followed up with an immediate in-home consultation appointment, where a designer brings a variety of photos and layouts of organizational systems offered, as well as product samples of different colors, styles and hardware for the customer to choose from.

"The demand for closet organization continues to grow exponentially," Egner said. "We plan to stay ahead of the competition by continuing to provide our current and future franchisees with the most innovative and efficient processes. Now, our focus is to find dedicated, qualified franchisees that are serious about this business opportunity, willing to follow our formula for growth and stay consistent with the business model we've perfected over the past 25 years."

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