Franchise Costs: Detailed Estimates of Blo Blow Dry Bar Franchise Costs (2017 FDD)

Detailed Estimates of Blo Blow Dry Bar Franchise Costs Based on Item 7 (Estimated Initial Investment) of Blo Blow Dry Bar’s 2017 Franchise Disclosure Document

1.  Franchise Fee:  $39,000

2.  Real Estate/Rent (3 Months):  $9,000 to $15,000

• You must lease or otherwise provide a suitable facility for the operation of the Franchised Business. Typically, a Blo Blow Dry Bar will be located within a mall, plaza, or freestanding location and should have approximately 700 to 1,000 square feet of space.

• Lease costs will vary based upon the square footage leased, the cost per square foot, and the required maintenance costs.

• The amounts you pay are typically not refundable, but in certain circumstances the security deposit may be.

• If you choose to purchase real estate for your Franchised Business, Blo cannot estimate how this would increase your initial investment. Blo’s estimates assume that you will lease an existing building and build it out to Blo’s specifications.

3.  Security Deposits:  $3,000 to $5,000

• Blo assumes you will have to pay your landlord a security deposit equal to one month’s rent in advance but in some instances may be up to 3 months’ rent.

• If you are a new customer of your local utilities, you will generally have to pay deposits in connection with services such as electric, telephone, gas, and water. The amount of deposit will vary depending upon the policies of the local utilities.

4.  Leasehold Improvements:  $50,000 to $135,000

• The facility must be renovated according to Blo’s standards and specifications. This estimate is based on Blo’s experience in renovating/constructing a Blo Blow Dry Bar Business.

• The high amount is for construction of a Blo Blow Dry Bar with a minimum of 8 styling stations and the equipment necessary to provide makeup services.

• The costs are approximate estimates and will vary according to locality.

• The estimate is for the total construction/renovation cost of a Franchised Business, excluding the cost of building permits which may vary due to wide variations in building and site conditions. The estimate also excludes financing costs, which may vary widely based on factors like the type of loan, the size and location of the Franchised Business, and your creditworthiness.

• Building construction and renovation costs vary greatly from region to region depending on material, labor costs, union or non-union practices, your ability to negotiate with the landlord, and other variables.

• You will incur costs to bring the property into conformity with the System. These costs necessarily vary in each individual situation based on the physical condition of the property, fixtures, equipment, furnishings, furniture, signage, and similar items already present on the property.

• The signage requirements and costs will vary based upon the size and location of the Franchised Business, local zoning requirements, and local wage rates for installation, among other things.

• Blo’s estimates do not include any tenant improvement allowance that you may negotiate with your landlord.

5.  Furniture, Fixtures, and Equipment:  $20,000 to $45,000

• You must purchase décor items and Blo’s proprietary millwork, styling chairs, hair washing stations and chairs, and hot tools for salon use.

6.  Computer System and Software and Training:  $2,500 to $4,000

• You must purchase a computer system with the peripheral equipment and software that Blo requires.

• On-site computer training will be supplied by the software provider at your expense.

• The cost to set up your Blo Blow Dry Bar email account is $85.

7.  Insurance (3 Months):  $900 to $1,500

• You must purchase the type and amount of insurance specified in Section 15 of the Franchise Agreement in addition to any other insurance that may be required by applicable law, any lender, or your landlord.

8.  Supplies and Collateral:  $2,000 to $3,000

• You must purchase general office supplies including stationery, business cards, and typical office equipment. You must also purchase certain collateral items, including promotional items, menus, bags, and other printed materials used in the operation and promotion of your Franchised Business.

9.  Initial Inventory:  $4,500 to $10,000

• You must carry an inventory from Blo’s approved suppliers which will include hair care products, styling tools, and accessories.

10.  Blo U Training:  $5,700 to $7,300

• Trainers will go to your location prior to opening to conduct staff training, franchise partner training, and software training. You must pay the trainers’ expenses including travel, accommodations, and meals, plus the Blo U trainer’s salary.

11.  Grand Opening Promotions, Advertising, and Events:  $10,000

• You must conduct a grand opening advertising campaign during the month before you open and for the first three months of operation. Blo must approve of your grand opening advertising campaign before you conduct it.

• You must participate on Yelp in the Beauty & Spas section, currently $30 per month.

12.  Licenses and Permits:  $500

• Local government agencies typically charge fees for occupancy permits, operating licenses, and sales tax licenses, among other things. Your actual costs may vary based on the requirements of local government agencies. State licenses for barbering and/or cosmetology typically range from $25 to $80 annually.

13.  Legal and Accounting:  $2,000 to $5,000

• Blo strongly recommends that you engage an attorney or accountant to assist you in your review of the franchise offering. You will need to employ an attorney, an accountant, and other consultants to assist you in establishing your Franchised Business.

• These fees may vary from location to location depending upon the prevailing rates of local attorneys, accountants, and consultants.

• Blo’s estimates do not include the formation of an entity for ownership of the franchise.

14.  Additional Funds (3 Months):  $25,000

• Blo recommends that you have a minimum amount of working capital available to cover operating expenses, including employees’ salaries, for the first three months that the Franchised Business is open. However, Blo cannot guarantee that its recommendation will be sufficient.

• Additional working capital may be required if sales are low or operating costs are high.

15.  Total Estimated Initial Investment:  $174,100 to $305,300

• In compiling this chart, Blo relied on its and its Parent’s combined industry experience and experience in operating Blo Blow Dry Bars. The amounts shown are estimates only and may vary for many reasons including the size of the facility you lease, the capabilities of your management team, where you locate your Franchised Business, and your business experience and acumen.