Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Seva Beauty (Eyebrow and Facial Services) Franchise Costs (2015 FDD)

by Franchise Chatter on October 2, 2013

in Franchise Costs, Salon Franchise

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Seva (Eyebrow Threading Salon) at Walmart

This post was updated on October 29, 2015 to reflect information from Seva Beauty’s 2015 FDD (Item 7).

Detailed Estimates of Seva Beauty Franchise Costs Based on Item 7 (Estimated Initial Investment) of Seva Beauty’s 2015 Franchise Disclosure Document

  • Seva is the pioneer of the fast-casual spa, with nationwide locations that maximize one-stop-shop convenience and affordable price points.
  • A Seva Express is the company’s quick-service format offering its “Brows and Face” category of services, which include facial threading and waxing, eyelash extensions, eyebrow tinting, and flash facials, from salon chairs. A Seva Express Studio is typically an open floor plan of approximately 250 to 550 square feet without a spa room. Seva Express Studios are typically located within major retailers such as Walmart, airports, shopping malls, and other non-traditional real estate venues.
  • Seva Spa is the company’s larger, full-service format offering the Brows and Face category of services as well as its Spa services, which include body waxing and full facials, from within one or more spa rooms. A Seva Spa Studio is typically 1,200 to 1,500 square feet with multiple spa rooms. Seva Spas are typically stand-alone or in-line locations located within shopping centers, strip malls, and traditional real estate venues.
  • Except as otherwise noted, none of these expenditures are refundable.

For a Seva Spa Studio Format

1.  Initial Franchise Fee:  $39,000

2.  Entrance Fee:  $0 to $10,000

  • If you sublease the location from the franchisor, you must pay the Entrance Fee directly to it. Once you sign the Franchise Agreement, the Entrance Fee is non-refundable.
  • If you lease the premises from a third-party landlord directly, the third-party landlord may impose and collect an entrance fee directly from you, which fee may be equal to or greater than the fee disclosed in this chart.

3.  Travel and Living Expenses While Training:  $500 to $2,000

  • You will receive approximately 3 days of training at the franchisor’s corporate offices in Highland Park, Illinois, and/or via online training, in which case these expenses may not apply.
  • The Franchise Fee includes training for up to three individuals before opening your Salon. Training of additional employees will cost $1,000 each. You must pay for travel, lodging, meals, compensation, and incidental costs for you and your employees for all training.

4.  Real Estate Improvements/Spa in a Box:  $40,000 to $60,000

  • This estimate assumes that the landlord will pay for some, but not all, of the improvements.
  • You will pay an estimated $20,000 to $40,000 to the franchisor for your Studio Development Package. The Studio Development Package is included in the table as part of the estimates for real estate improvements; for fixtures, furnishings, and equipment; and other costs.

5.  Furniture, Fixtures, and Equipment:  $20,000 to $40,000

6.  Rent:  $2,000 to $6,000 per month

7.  Security Deposit:  $6,000 to $18,000

  • Rent range will vary depending on the type of facility (Seva Express or Seva Spa), size, condition, location, and various market conditions. These figures are based on the payment of the first month’s rent and an initial three month security deposit.
  • These estimates do not include any percentage rent that you may be required to pay.
  • Your sublease will be subject to the terms and conditions of the franchisor’s lease for the space. If the franchisor subleases the premises to you, all rents, deposits, and other lease fees will be paid to the franchisor. The subleases of spaces generally provide that you do not pay rent until the earlier of (a) the opening date of the Studio, or (b) 90 days after you take possession of the space.

8.  Computer System:  $3,000 to $5,000

  • This estimate includes the computer equipment and software described in Item 11.

9.  Grand Opening Promotion:  $1,500 to $3,000

  • You are required to spend a minimum of $1,500 on grand opening marketing and promotion. This estimate may include advertising, brochures, flyers, coupons, banners, and similar materials.

10.  Opening Inventory:  $4,000 to $8,000

11.  Additional Funds (3 to 6 Months):  $30,000 to $60,000

  • This estimates the working capital required during the first three months of operation. It includes payroll expenses, ongoing advertising expenses, initial insurance premiums, utility payments, high speed internet charges, rent, royalty fee payments, brand fund payments, and miscellaneous expenses.
  • This estimate does not include any financing costs associated with the purchase of the franchise. This estimate does not include an owner’s salary or draw. The franchisor cannot guarantee that your expenses will not be greater.

12.  Total:  $146,000 to $251,000

  • In compiling these estimates, the franchisor has relied on its experience in establishing and operating Seva Express Studios.
  • All of the estimates set forth above have been based on costs and expenses that the franchisor would expect to be incurred by a franchisee in an average cost location. If your business is located in a high cost area (i.e. a major urban center), your investment may be significantly higher.
  • These figures do not take into account financing charges, inflation, compensation for your personal time or labor, rent or interest expenses payable before your Studio opens, or similar costs. There are many variables in these costs and expenses, and your actual experience may be lower or higher than the estimates given.

For a Seva Express Studio

  • The total estimated initial investment necessary to begin operation of a Seva Express Studio (approximately 500 square feet of space) ranges from $114,000 to $199,500.

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