My Salon Suite Franchise Costs: Estimated Initial Investment (Item 7, 2023 FDD)

New Location

• All amounts that you pay to the franchisor are nonrefundable. Third-party lessors and suppliers will decide if payments to them are refundable. Neither the franchisor nor any of its affiliates offer any financing for any of your initial investment.

1.  Initial Franchise Fee:  $50,000

• You will pay an Initial Franchise Fee of $25,000, a discount of 50%, if you are a veteran of the U.S. Armed Forces that meets the requirements of the VetFran Program, or if you are a First Responder, as determined by the franchisor.

• The Initial Franchise Fee is non-refundable under the terms of the Franchise Agreement.

2.  Travel and Living Expenses:  $1,000 to $3,000

3.  Rent or Real Estate:  $13,554 to $41,540

• You must lease or otherwise acquire a suitable facility for the operation of your Franchised Business. You will need a facility with approximately 3,715 to 14,250 square feet of space.

• Your actual rent payments may vary depending upon your location and your market’s retail lease rates.

• If you purchase instead of lease the premises for your Franchised Business, then the purchase price, down payment, interest rates, and other financing terms will determine your monthly mortgage payments.

4.  Improvements/Conversions:  $531,236 to $1,583,846

• The cost of building out and constructing your Franchised Business will vary significantly based on the geographic location and square footage of your Franchised Business.

• Tenant improvement costs typically range between $150 per square foot and $180 per square foot. Tenant improvement allowance has ranged from $0 to $100 per square foot.

5.  Furniture and Fixtures:  $193,417 to $388,151

6.  Signage:  $4,700 to $19,641

7.  Miscellaneous Opening Costs:  $1,000 to $3,000

• This estimate is for miscellaneous opening costs and expenses such as installation of telephone; deposits for gas, electricity, and other services; business licenses; vehicular registrations; legal and accounting expenses for your start-up period.

8.  Operating Supplies:  $1,000 to $5,000

• You will need to purchase an initial inventory of cleaning supplies and other operating supplies.

9.  Advertising/Marketing (3 Months):  $10,000

10.  Insurance (Annual):  $1,400 to $4,000

• You must obtain and maintain, at your own expense, the insurance coverage the franchisor requires, and satisfy other insurance-related obligations.

• If you have had prior issues or claims from previous operations unrelated to the operation of a Franchised Business, your rates may be significantly higher than those estimated above.

11.  Additional Funds (3 Months):  $0 to $40,000

• These amounts represent the franchisor’s estimate of the amount needed to cover your expenses for the initial 3-month start-up phase of your Franchised Business. They include payroll costs during the first 3 months of operation, but not any draw or salary for you.

• These figures do not include standard pre-opening expenses, Royalty Fees or Brand Building Fund contributions payable under the Franchise Agreement, or debt service, and assume that none of your expenses are offset by any sales generated during the start-up phase.

• These figures are estimates, and the franchisor cannot guarantee that you will not have additional expenses starting your Franchised Business.

12.  Design Standards Fee:  $1,000

13.  Architectural Services Fee:  $11,880 to $40,000

• You will be required to pay various fees to architects and/or design professionals to construct the Franchised Business. These fees consist of site surveys, plus travel, architectural design fees, and permit submittal/service fees.

14.  Project Management Fee:  $2,500

15.  Licensing and Permitting:  $657 to $50,122

16.  Total Estimated Initial Investment:  $823,344 to $2,241,800

• This is an estimate of your initial start-up expenses for 1 Franchised Business.

• You should review these figures carefully with a business advisor before making any decision to purchase the Franchise Business.