In this FDD Talk 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 2019 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 2019 FDD
- Section IV – Number of franchised and company-owned Drybar outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Drybar’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- actual and average total service count (first 12 months), total sales (first 12 months), 2018 sales, and compound annual growth rate for the 22 franchised Drybar Shops with more than 12 months of client visit history (as of December 31, 2018)
- 2018 average gross revenue (services, memberships, and retail products, less refunds), shop consumables, labor, controllable expenses, non-controllable expenses, and operating profit for the 14 franchised Drybar Shops that have been open for longer than 2 years and are considered standard shops since they have 8 or more chairs
Section I – Background Information
14 Things You Need to Know About the Drybar Franchise
Partners with JNSQ Wines
1. In late March 2019, JNSQ Wines announced that it had become the first official wine partner at select Drybar locations throughout the United States. As part of the partnership, JNSQ Rosé Cru and Sauvignon Blanc will be served complimentary to all Drybar customers to elevate their blowout experience. JNSQ wines will also be served at Drybar marquee launches and private events. Drybar customers are among the first to indulge in JNSQ Wines for free.
2. Additionally, Drybar is now offering a little JNSQ style to its menu. Clients will have the option of adding a little JNSQ to any blowout with a few rose gold hair pins at no additional cost, or a stylish hair braid for an additional $10.
3. Clarence Chia, senior vice president of marketing and ecommerce for JNSQ Wines, said, “We are thrilled to be partnering with Drybar, the nation’s premier blow out salon, to introduce JNSQ as its official celebration wine. We look forward to creating unique and meaningful one-of-a-kind experiences for Drybar customers through this mutual collaboration that aims to bring beauty, blowouts, and a little je ne sais quoi to women’s lives.”
4. The Drybar x JNSQ partnership also includes co-branded merchandise spotlighting JNSQ in participating locations throughout 2019.
5. Drybar x JNSQ Instagram-ready photo installations where customers can share their best je ne sais quoi moments were on display in Drybar flagship locations throughout Los Angeles, Miami Beach, Dallas, Austin, New York, and more, late March through mid-April. In addition, email and social collaborations with some of today’s biggest influencers spotlighted all the fun via first-hand experiences sipping, toasting, and celebrating with JNSQ wines, while indulging in signature Drybar x JNSQ hair styling.
6. Alli Webb, co-founder of Drybar, added, “At Drybar it’s always been about the experience and making women feel great. Since the day we opened our very first Drybar, we have been committed to over-the-top customer service, obsessive attention to every detail, and of course providing the perfect blowouts. But that’s only part of the overall experience we have become known for.”
7. Webb added, “Each shop is meticulously designed to create our signature, luxury atmosphere. You never feel like you’re at a ‘salon’ at Drybar, but rather a beautiful bar, being served your favorite beverage or glass of wine while catching up on your favorite movies. I am so excited that we are partnering with JNSQ in our Drybar shops. Like Drybar, the JNSQ brand celebrates women, and it’s such a fun partnership that really enhances our client experience.”
Part of H&M’s New Loyalty Incentive Program
8. In mid-May 2019, retail clothing chain H&M launched a new loyalty program, and discounts on blowouts at Drybar are one of the incentives being used to entice customers to sign up. H&M’s loyalty shopping program includes discounts on H&M products, access to exclusive events, free shipping on orders over $40, and 20% off a blowout at Drybar.
9. The 20% coupon can be used for a blowout or dry style service at any U.S. Drybar location. H&M loyalty program members can also look forward to special events featuring Drybar services at select H&M locations this fall.
First Location in Missouri
10. Drybar opened its first salon in Missouri in St. Louis in May 2019. The 1,200 square-foot location features nine styling chairs and offers all of Drybar’s services. Additionally, as with all Drybar locations, visitors will have the option of ordering wine, champagne, tea, coffee, and sweet treats. Drybar said it chose St. Louis for their new location because they view the city as a Midwest cultural epicenter.
11. Maria Boschetti, senior director of brand marketing for Drybar, said, “This is the first Drybar in the state of Missouri and St. Louis was chosen as the location because it has evolved to become a culture and trend epicenter in the Midwest. With the city’s large urban and suburban populations, its genuine support of locally-run businesses, and its commitment to fashion, festivities, and fun, we knew St. Louis would embrace the Drybar experience.”
12. Drybar was founded in 2010 by Alli Webb, her husband Cameron Webb, and her brother Michael Landau in Brentwood, California. Before opening the first Drybar salon, Webb had been running a side business called Straight At Home, which provided an in-home hair experience. Webb recognized that there was a need for affordable hair blowouts instead of a full salon treatment. At the time, blowout-only salons were popping up in bigger cities like New York City.
13. The Drybar concept was an immediate success and a year after opening the first location, with help from family and friends, the Webbs and Landau raised $2.5 million to expand the business. After opening a few additional locations, Drybar recruited several prominent investors to its board, including Paul Pressler, former CEO of GAP, and Janet Gurwitch, the founder and former CEO of Laura Mercier Cosmetics. In 2012, Drybar began franchising and has since grown across the United States and Canada.
Entrepreneur’s Franchise 500
14. Drybar ranked No. 119 on Entrepreneur’s 2019 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 2019 FDD.
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 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 11
- Outlets at the End of the Year: 15
- Net Change: +4
- Outlets at the Start of the Year: 15
- Outlets at the End of the Year: 23
- Net Change: +8
- Outlets at the Start of the Year: 23
- Outlets at the End of the Year: 35
- Net Change: +12
- Outlets at the Start of the Year: 44
- Outlets at the End of the Year: 53
- Net Change: +9
- Outlets at the Start of the Year: 53
- Outlets at the End of the Year: 66
- Net Change: +13
- Outlets at the Start of the Year: 66
- Outlets at the End of the Year: 81
- Net Change: +15
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
Annual Sales and Service Counts for 22 Franchised Drybar Shops in Their First 12 Months of Operation
- The table below reflects the annual sales and service counts for 22 franchised Shops during their first 12 months of operation beginning with the first day of the first full month when the Shop opened and continuing through the twelfth month the following year (ex: if a Shop opened on May 7th, the period will reflect amounts from June to May of the following year).
- The table includes information on 3 Shops in California, 3 Shops in Arizona, 5 Shops in Dallas Metro Market, 2 Shops in Georgia, 2 Shops in Colorado, 1 Shop in Kentucky, 2 Shops in Florida, 1 Shop in Louisiana, 1 Shop in New York, 1 Shop in Pennsylvania, and 1 Shop in South Carolina. It excludes 12 franchised Shops that opened in 2018.
- Each Shop included in the table offered similar products and services during its first year of operation as would generally be offered by a typical Drybar Shop described in the disclosure document, except that these Shops did not sell Drybar Branded Products at retail during their first year of operation.
- Drybar obtained this information from its Booker Reservations System’s “Operations Report.”
Shop 1 – Opened February 2011