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FDD Talk 2017: What You Need to Know About the Drybar Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on May 24, 2017

in FDD Talk 2017: Salon Franchises, Franchise Earnings, Salon Franchise

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In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Drybar franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Drybar franchise, based on Item 7 of the company’s 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Drybar franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Drybar’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • actual and average annual and monthly client visits and gross revenue during the first 12 months of operation for the 10 franchised Drybar Shops with more than 12 months of client visit history (as of December 31, 2016)
  • 2016 average gross revenue (services, memberships, and retail products, less refunds), shop consumables, labor, controllable expenses, non-controllable expenses, and operating profit for the 8 franchised Drybar Shops that have been open for longer than 2 years

Section I – Background Information

13 Things You Need to Know About the Drybar Franchise

Drybar Helps to Pass Bill Making It Legal to Have a Drink in California Beauty Salons

1.  At the beginning of 2017, AB13 (a.k.a the “Drybar bill”) went into effect in California. The new law allows beauty salons and barber shops to legally serve a glass or two of free alcohol to customers without having to obtain a liquor license. The bill was spearheaded by Drybar’s founder Alli Webb, whose company has been offering free drinks to clients since opening in 2010.

2.  The law limits customers who are 21 years old or over to six ounces of wine or 12 ounces of beer per visit. The only other condition is that the alcohol must be served at no extra charge.

New Products to Extend Blowouts

3.  In February 2016, Drybar announced that it would be rolling out a new line of products and hair accessories to maintain blowouts for as long as four days. According to Drybar founder Alli Webb, the number one question customers ask is how to make a blowout last. The new line of products includes the Detox Dry Conditioner, which provides the benefits of a conditioner without the need to wash hair, to go along with the already available Detox Dry Shampoo.

4.  Other new products include a silk pillowcase and a travel kit with Detox Dry Shampoo, Detox Dry Conditioner, The Morning After Shower Cap, and a Lil’ Lemon Drop Detangling Brush.

New Travel Blow Dryer

5.  Over the summer of 2016, Drybar released the Baby Buttercup, a travel-sized version of the company’s signature full-sized Buttercup Blow-Dryer. According to the company, the Baby Buttercup has the power and speed of a large dryer.

6.  Alli Webb says that it took Drybar three years to develop the Baby Buttercup as the company wanted to produce the best and strongest travel dryer on the market. The Baby Buttercup has two temperature settings and a “cool shot” button, plus the same shine-increasing, frizz-reducing Ionic technology as its larger full-sized counterpart.

7.  The travel dryer is available for purchase on the company’s website, in Drybar stores, Sephora, Nordstrom, and select Ulta and Bloomingdale’s locations.

Launched Affiliate Program

8.  In August 2016, Drybar announced that it had launched an affiliate program on the Rakuten Affiliate Network. The affiliate program will help further grow the company’s product business by providing publishers with the ability to promote a wide variety of hair care products and tools sold on the Drybar website.

9.  During the fall of 2016, the company extended the affiliate program to support publishers promoting Drybar’s brick and mortar retail shops.

10.  U.S. Interactive Media & IMW Agency has partnered with Drybar to manage the affiliate program.

Company History

11.  The first Drybar salon was founded in Brentwood, California in 2010 by Alli Webb, her husband Cameron Webb, and her brother Michael Landau, former Vice President of Brand Marketing at Yahoo!. The following year, Webb, with the help of friends, raised $2.5 million to expand the business.

12.  Although Drybar’s growth was initially slow, the company has pushed for greater expansion in recent years and hopes to open 30 new locations in 2017. Today, there are over 70 Drybar salons in the U.S. and Canada.

Entrepreneur’s Franchise 500

13.  Drybar has yet to rank on Entrepreneur’s annual Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of Drybar franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Drybar’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

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