For one manager-run Clothes Mentor store, a defensible analytical range is approximately $96,000 to $420,000 in annual pre-tax owner earnings, with a base scenario near $210,000. The 2026 Franchise Disclosure Document reports Net Sales and Gross Profit—not store-level operating profit, net income, owner compensation, or cash flow—so these earnings figures are estimates rather than an official franchisor result.
This range is an independent analytical scenario, not an Item 19 financial performance representation by Clothes Mentor, LLC. It combines identified facts from the 2026 Clothes Mentor FDD with U.S. Census Bureau retail-expense data, a Bureau of Labor Statistics wage benchmark, and explicitly stated sensitivity assumptions. Actual results can differ materially with location, store size, Net Sales, inventory buying, labor, occupancy, financing, owner involvement, local competition, e-commerce mix, and execution.
Legal franchisor: Clothes Mentor, LLC, a Delaware limited liability company; parent: NTY Franchise Company, LLC. The FDD was issued April 6, 2026. Item 19 covers 103 franchised Clothes Mentor stores that operated for the entire calendar year ended December 31, 2025. It excludes three stores that permanently closed during 2025, seven temporarily closed stores, and three stores that opened during 2025. Item 20 reports 113 franchised stores and no company-owned stores at year-end. The modeled format is the single-store format described in Item 7, typically 2,800 to 4,000 square feet. Evidence checked July 21, 2026.
FDD citations: 2026 Clothes Mentor FDD, cover; Item 1, pp. 1–2; Item 7, pp. 9–11; Item 19, pp. 29–36; Item 20, pp. 36–41.
Median 2025 Net Sales
Revenue for the 103 full-year franchised stores; it is not owner income.
Average Gross Profit margin
Net Sales less product cost and inventory shrinkage; store operating expenses remain unpaid.
Full-year stores in Item 19
Approximately 91% of the 113 franchised stores reported at year-end 2025.
Core sales-based obligations
4% royalty plus at least 5% local/cooperative advertising, before fixed and online fees.
Retail supervisor wage
May 2025 national mean wage used to value owner labor when replacing a manager.
What does the Clothes Mentor FDD actually disclose?
The official disclosure measures Net Sales and Gross Profit for full-year franchised stores, not annual owner earnings. For calendar 2025, Item 19 reports average Net Sales of $819,550, median Net Sales of $743,699, average Gross Profit of $559,044, and an average Gross Profit margin of 69.43% across 103 stores.
“Net Sales” includes store and online revenue after sales tax, coupons, discounts, and returns. “Gross Profit” is Net Sales minus product cost and inventory shrinkage only. The definition expressly says Gross Profit does not reflect store operating expenses; freight and warranty costs are also outside the disclosed Cost of Goods definition. Gross Profit therefore cannot be relabeled as owner earnings.
| 2025 Item 19 measure | Lower quartile | System total | Upper quartile |
|---|---|---|---|
| Average Net Sales | $384,809 | $819,550 | $1,338,058 |
| Median Net Sales | $390,189 | $743,699 | $1,204,677 |
| Average Gross Profit | $269,677 | $559,044 | $911,490 |
| Average Gross Profit margin | 70.73% | 69.43% | 69.23% |
The Net Sales and Gross Profit quartiles are separately ranked populations; the table should not be read as if every sales-quartile store is the same store as the corresponding Gross Profit-quartile store. Source: 2026 Clothes Mentor FDD, Item 19, pp. 29–31.
The $819,550 average and $743,699 median are revenue measures. Payroll, occupancy, advertising, royalty, technology, bookkeeping, card fees, insurance, utilities, depreciation, repairs, and other operating costs must still be paid before residual owner earnings exist.
How is the estimated owner-earnings range calculated?
The estimate applies a broad official retail operating-cost proxy to the Clothes Mentor Gross Profit margin, then substitutes the franchise’s disclosed advertising and fee obligations. This is a transparent Mode C model because the current FDD supplies strong revenue and Gross Profit evidence but no compatible store-level operating-expense or earnings table.
The benchmark starts with the U.S. Census Bureau’s 2022 Annual Retail Trade Survey for legacy NAICS 448, Clothing and Clothing Accessories Stores: $102.664 billion of operating expenses on $303.413 billion of sales, or 33.84% of sales. Purchased advertising and promotional services were $6.865 billion, or 2.26% of sales. The model removes that broad advertising component, inserts Clothes Mentor’s 5% local advertising minimum, adds the 4% royalty, adds the $3,000 National Marketing and Promotional Fee, and estimates the e-commerce program fee at 0.236% of sales—2% of the FDD’s 11.81% average 2025 e-commerce share.
The Census category is broader than upscale women’s resale and is not franchise-specific. Its operating expenses include payroll, occupancy-related costs, technology, professional services, depreciation, and other operating expenses, while excluding Cost of Goods Sold, interest expense, capital expenditures, and income, sales, and excise taxes. Because the table does not isolate franchise royalties or every required vendor charge, the model uses a three-percentage-point cost sensitivity and does not separately stack technology, software support, hosting, Shopify, and bookkeeping charges on top of the broad expense ratio.
- Conservative: $384,809 lower-quartile average Net Sales and the adjusted operating-cost proxy increased by 3 percentage points.
- Base: $743,699 system median Net Sales and the central adjusted operating-cost proxy.
- Upside: $1,338,058 upper-quartile average Net Sales and the adjusted operating-cost proxy reduced by 3 percentage points.
Estimated manager-run annual owner earnings
The scenarios use disclosed 2025 sales anchors and an independently modeled operating margin.
Interpretation: Sales level drives most of the range, while the ±3 percentage-point operating-cost sensitivity recognizes the lack of same-brand operating-expense data. These are analytical scenarios, not probabilities or franchisor forecasts.
Sources: 2026 Clothes Mentor FDD, Item 19, pp. 29–31; U.S. Census Bureau 2022 Annual Retail Trade Survey tables; Census detailed retail operating-expense tables.
What does the base scenario subtract?
The base bridge leaves approximately $209,847 after modeled operating expenses and disclosed recurring percentage fees, before interest, financing principal, personal income taxes, and capital expenditures. It uses median 2025 Net Sales and the 69.43% average Gross Profit margin.
| Base-scenario bridge | Evidence class | Annual amount |
|---|---|---|
| Median Net Sales | Official FDD fact | $743,699 |
| Product cost and shrinkage at 30.57% | Derived from FDD Gross Profit margin | ($227,349) |
| Core operating expenses, excluding Census purchased advertising | Government benchmark | ($234,814) |
| Local advertising at 5% | Official FDD obligation | ($37,185) |
| Royalty at 4% | Official FDD obligation | ($29,748) |
| National Marketing and Promotional Fee | Official FDD obligation | ($3,000) |
| E-commerce program fee | Derived from FDD fee and sales-share data | ($1,757) |
| Estimated pre-tax manager-run owner earnings | Independent scenario | $209,847 |
Rounding is applied only after the full-precision calculation. The benchmark includes depreciation but excludes interest expense and capital expenditures. The model assumes ordinary technology, software, bookkeeping, card-processing, insurance, occupancy, payroll, repairs, utilities, and similar costs are represented within the broad operating-cost proxy; separately adding every Item 6 and Item 8 vendor fee would risk double counting.
How does owner involvement change the result?
An owner who personally replaces a paid store manager may realize an estimated owner-operator benefit about $53,380 above the modeled manager-run residual, but that increment compensates the owner for full-time labor. The May 2025 Bureau of Labor Statistics national mean wage for First-Line Supervisors of Retail Sales Workers is $53,380. It is a labor-value benchmark, not passive business profit.
Item 15 requires the store to be under the direct supervision of the owner, a Principal Owner, or an approved operating manager who has completed training. If a manager supervises the store, the owner or Principal Owner must remain active in operations and oversee the manager and communications with the franchisor. The day-to-day supervisor serves full time. A manager-run Clothes Mentor store therefore should not be modeled as fully passive ownership.
Manager-run earnings versus owner-operator benefit
Owner-operator benefit adds the $53,380 national retail-supervisor wage benchmark to residual operating earnings.
Interpretation: The $53,380 difference is the market value of labor performed by the owner. It should not be described as additional passive profit, and actual manager compensation varies substantially by geography and experience.
Sources: 2026 Clothes Mentor FDD, Item 15, p. 25; BLS May 2025 national occupational wage table.
The modeled owner-operator benefit is approximately $149,000, $263,000, or $473,000 across the three scenarios. Part of each figure is compensation for managing the store full time. It is not equivalent to distributable business profit from a passive asset.
Why is the confidence rating limited?
Confidence is limited because the strongest same-brand disclosure stops at Gross Profit, while the operating-cost layer comes from a broad 2022 clothing-retail benchmark. The model is reproducible, but it cannot replace store-level payroll, rent, card fees, insurance, utilities, maintenance, local wage rates, shrinkage controls, or owner-compensation records.
- Excluded outlets: Item 19 omits stores that permanently closed, temporarily closed, or opened during 2025. The conservative scenario therefore is not a failure-case floor; actual earnings can be lower or negative.
- Benchmark mismatch: Census legacy NAICS 448 covers clothing and clothing-accessories retailers, not only used women’s apparel stores or franchised Clothes Mentor locations.
- Owner-pay treatment: Census payroll can include corporate officer salaries but excludes proprietor or partner payments. Owner labor is therefore not measured consistently across the benchmark population.
- Occupancy dispersion: Item 7 estimates 2,800 to 4,000 square feet and approximately $20 to $40 per square foot in rent, including common-area maintenance and taxes. Local occupancy can move annual earnings by tens of thousands of dollars.
- Financing and reinvestment: Census operating expenses exclude interest and capital expenditures. The estimates are before loan interest, financing principal, remodels, replacement equipment, and personal income taxes.
Which recurring obligations matter most?
The largest clearly disclosed recurring burden is the combination of the 4% royalty and the 5% local/cooperative advertising minimum. At the $743,699 base-sales level, those two obligations total about $66,933 before the $3,000 national marketing fee and e-commerce program fee.
| Recurring obligation | FDD amount | Model treatment |
|---|---|---|
| Royalty Fee | 4% of Net Sales | Explicitly deducted |
| Local/cooperative advertising | Minimum 5% of Net Sales | Explicitly deducted |
| National Marketing and Promotional Fee | Currently $3,000 per year | Explicitly deducted |
| E-Commerce Program Fee | Currently 2% of online Net Sales | Applied to 11.81% average online share |
| Technology Access and software support | $1,500 per year plus $300 per month | Assumed within broad operating-cost proxy |
| Bookkeeping, e-commerce hosting, Shopify | Current third-party monthly charges | Assumed within broad operating-cost proxy |
Source: 2026 Clothes Mentor FDD, Item 6, pp. 5–8; Item 8, pp. 12–13. Current fee schedules can change under the agreement and vendor arrangements.
What should a buyer verify before relying on the range?
A buyer should replace every broad assumption with current store-level evidence from the franchisor’s written substantiation and franchisee interviews. The FTC advises prospects to examine the source, limitations, assumptions, sample, and typicality of an Item 19 claim and to request written substantiation.
- Request the written substantiation for the 2025 Item 19 Net Sales and Gross Profit tables, including store-level definitions and any data-quality adjustments.
- Ask multiple current franchisees for normalized profit-and-loss statements showing payroll, manager compensation, rent, card fees, advertising, royalty, technology, insurance, repairs, depreciation, and owner compensation separately.
- Interview former and closed-store franchisees identified through Item 20 and Exhibit C; Item 19 excludes the 2025 closures and temporary closures.
- Confirm whether the proposed store will be owner-operated or manager-run, the owner’s expected weekly hours, and the local all-in cost of an approved operating manager.
- Stress-test occupancy using the actual lease, common-area charges, taxes, tenant-improvement obligations, and required remodeling or relocation costs.
- Model interest, principal, maintenance capital expenditures, and working-capital needs separately; do not treat the operating estimate as after-tax take-home pay.
What is the decision-useful earnings takeaway?
The strongest defensible annual range is approximately $96,000 to $420,000 for a manager-run single store, with a base scenario near $210,000; an owner-operator benefit range is approximately $149,000 to $473,000 after adding the market value of full-time retail supervision. Every figure is scenario-based, not an official Clothes Mentor earnings disclosure.
The dominant earnings driver is Net Sales: Item 19’s lower- and upper-quartile average sales differ by more than $950,000. The largest unresolved uncertainty is the absence of same-brand store-level operating-expense and owner-compensation data, compounded by Item 19’s exclusion of closed, temporarily closed, and newly opened stores. A buyer should verify the Item 19 substantiation, actual franchisee P&Ls, owner hours, manager cost, occupancy, financing, and reinvestment requirements before using the range in an acquisition or financing decision.