Blo Blow Dry Bar Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

1.  Franchise Fee:  $40,000

2.  Real Estate/Rent (1st Month’s Rent):  $3,000 to $7,500

• 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.

• 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:  $5,000 to $9,500

• 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 higher.

• 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.  Drawings and Permits:  $9,500 to $15,000

• The range in the chart provides an estimate of the costs and expense you will incur in connection with securing drawings and permits for the build-out and construction of the premises for the Franchised Business with one of Blo’s approved architectural design firms.

5.  Leasehold Improvements:  $93,350 to $152,500

• 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 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 includes a $3,000 Construction Management Fee payable directly to Blo. 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, equipment, signage, and 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 low estimate includes a tenant improvement allowance of $25,000 that was negotiated with the landlord.

• Blo reserves the right to require you to use its designated vendor for construction management services.

6.  Furniture, Fixtures, and Equipment:  $46,000 to $55,500

• You must purchase décor items and Blo’s proprietary millwork, styling chairs, hair washing stations and chairs, and reception furniture for use in the salon.

7.  Computer System and Software and Training:  $1,900 to $2,012

• 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 current initial cost to set up your Blo Blow Dry Bar email account is $89.

8.  Insurance:  $600 to $750

• 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.

9.  Bar Supplies:  $14,788 to $16,530

• Will include office and reception supplies, storage, and organizational items, as well as styling items such as combs, brushes, and hot tools.

10.  Initial Inventory:  $12,525 to $13,760

• You must carry an inventory from Blo’s approved suppliers which may include hair care products, styling tools, accessories, make-up, and other designated inventory items.

11.  Training:  $9,737 to $14,406

• Prior to opening you will attend 2 to 3 days of training at Blo’s headquarters and you are responsible for your costs to attend this training.

• Trainers will go to your location prior to opening to conduct staff training, franchise partner training, and software training. Blo reserves the right to conduct training entirely remotely, which may include the use of video-conferencing technologies (e.g., Zoom) and other currently existing and/or future developed technology platforms and programs.

• You must pay the trainers’ expenses including travel, accommodations, and meals, plus the Blo U trainer’s salary.

12.  Grand Opening Promotions, Advertising, and Events:  $12,500 to $15,000

• You must conduct a grand opening advertising campaign two months prior to opening and for the first three months of operation.

• You must, unless Blo designates otherwise, pay to Blo the Grand Opening Advertising Expenditure (ranging from $12,500 to $15,000, as Blo designates). Blo may require you to pay a portion of the Grand Opening Advertising Expenditure directly to designated vendors.

• Blo collects the Grand Opening Advertising Expenditure and pays service providers directly for grand opening advertising and marketing related purposes. Blo has the right to retain an administrative fee of up to 15% of the Grand Opening Advertising Expenditure.

• 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.

• As of the issuance date of the Disclosure Document, Blo requires you to participate on Yelp in the Beauty & Spas section and you must pay Blo $28 per month (unless Blo designates otherwise) for this service. Blo remits payment directly to Yelp. Blo reserves the right to modify the payment structure for Yelp services effective on notice to you.

13.  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.

14.  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 and to advise you as to laws, rules, and regulations applicable to the development and operation of your Franchised Business. You will need to employ or engage 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.

15.  Additional Funds (3 Months):  $6,000 to $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.

16.  Total Estimated Initial Investment:  $257,400 to $372,958

• 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.

• The amounts shown do not include shipping or taxes where applicable.