This post was updated on January 2, 2018 to reflect information from Seva Beauty’s 2017 FDD (Item 7).
Detailed Estimates of Seva Beauty Franchise Costs Based on Item 7 (Estimated Initial Investment) of Seva Beauty’s 2017 Franchise Disclosure Document
- Except as agreed upon by third-party suppliers, none of these expenditures are refundable.
1. Initial Franchise Fee: $39,000
2. Leasehold Administration Fee: $0 to $15,000
- If you enter into a sublease with Seva Beauty or its affiliate, Seva Beauty may charge a $15,000 Leasehold Administration Fee, payable upon locating and receiving its approval for a proposed site for the Studio.
3. Pre-Opening Administration Fee: $10,000
4. Training: $0 to $2,000
- The Initial Franchise Fee includes training for 3 individuals before opening the Studio. Training of additional employees will cost $1,000 for each additional employee.
- While training is free for 3 individuals, there may be circumstances where you will have to pay for your employed lead technician to assist with your initial and manager training.
5. Real Estate Improvements/Spa in a Box: $13,100 to $60,000
- Real estate improvements and Spa in a Box includes design plans, blueprints, initial interior build-out, lighting, flooring, mirrors, cooling/heating systems, and other costs associated with initial leasehold improvements.
- The costs estimated will also depend on the brands purchased and other factors.
6. Furniture, Fixtures, and Equipment: $20,000 to $66,000
- Furniture, fixtures, and equipment includes inventory shelves, décor, salon chairs, televisions, monitors, speakers, and other types of furniture and fixtures necessary to outfit your Studio.
- Spa Studios will typically have higher costs for furniture, fixtures, and equipment than Express Studios.
7. Rent: $550 to $15,000 per month
8. Security Deposit: $2,000 to $25,000
- Rent may vary depending on whether you operate an Express or Spa Studio. Spa Studios typically have higher rent than Express Studios as well as a larger footprint. Rent may also vary based on several factors, including size, condition, location, and various market conditions.
- The estimates assume you will lease between 500 to 1,500 square feet.
- A sublease will be subject to the terms and conditions of Seva Beauty’s lease of the space. 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 premises. All rent under a sublease is payable to Seva Beauty or its affiliate.
9. Computer System: $2,000 to $4,000
- This estimate includes the computer equipment and software described in Item 11.
10. 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.
11. Opening Inventory: $1,500 to $12,000
12. Insurance Premiums: $1,000 to $4,000 (for your annual installment)
13. Additional Funds (3 to 6 Months): $24,000 to $46,000
- This estimates the working capital required during the first 3-6 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. Seva Beauty cannot guarantee that your expenses will not be greater.
- Your costs will depend on factors such as: how well you follow Seva Beauty’s operating system, your management skill, market conditions, lease rates, wage rates, media rates, the economy, your competition, and your initial sales levels.
- Seva Beauty makes no representation that the Studio will be profitable during this time period.
14. Total: $114,650 to $301,000
- In compiling these estimates, Seva Beauty has relied on its experience in establishing and operating Studios. Its experience is predominately derived from operating Express Studios inside Walmart locations.
- The estimates may vary significantly dependent upon additional factors, such as the size of your market area, local economic conditions, the number of employees, your choice of optional equipment, availability of labor and materials in your area, freight and delivery costs, taxes, and interest rates.
- If your business is located in a major urban center, the initial 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.
- You should not plan to draw income from the operations during the start-up and development of your business, which period may vary considerably from Studio to Studio and cannot be accurately predicted by Seva Beauty.
- You should have additional financial resources available to cover any additional expenses and any operating losses that you may experience. The amount of reserves will vary greatly and will depend upon many factors, including the rate of growth and success of your business.
- Your initial investment will also depend upon such factors as demographic and local economic conditions, public awareness of Seva Beauty’s marks in particular and the nature of your business in the local area, your ability to operate efficiently and in accordance with Seva Beauty’s system, and local competition.
- Neither Seva Beauty nor any of its affiliates offer direct or indirect financing for any part of the initial investment.