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

• Section I – Background information on the Wine & Design franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Wine & Design 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 Wine & Design franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned Wine & Design 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 Wine & Design’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average, median, highest, and lowest gross sales for the franchised Wine & Design studios that have been open for at least 6 months as of December 31, 2018, divided into 3 groups (studios that have been open for more than 24 months, studios that have been open for more than 12 months but less than 24 months, and studios that have been open for more than 6 months but less than 12 months)

• projected labor cost and cost of goods sold for a 2-hour painting class, with 15, 35, and 50 painter customers per class

Section I – Background Information

15 Things You Need to Know About the Wine & Design Franchise

Two Years After Appearing on “Shark Tank,” Brand Trends Upward

1.  In late November 2019, Franchise Times checked in with Harriet Mills, founder and CEO of Wine & Design, to see how the business was doing after appearing on “Shark Tank” in 2017. According to Mills, the brand’s expansion in 2016 led her to take a chance and seek an investment on “Shark Tank.”

2.  To catch the eye of the investors, Mills brought along a fully nude male model to highlight the special Bachelorette Night concept that Wine & Design offers. Mills’ gamble paid off and she impressed Kevin O’ Leary, who invested $500,000 and is still a member of the brand’s board. Over the next two years, 19 new franchise partners would sign on and join the brand.

3.  According to Mills, “I think people are attracted to the values that we have as a brand.” Wine & Design also has one of the lowest franchise fees in the paint-and-sip category at $25,000 and its initial investment range is from $69,950 to $221,200, including the franchise fee.

4.  While most of its customers are women, it does offer events and specials for people of all ages. “Bachelorette parties are very frequent bookings,” said Mills. “We also have some bigger corporations book a night to do team-building exercises.”

5.  The brand offers some other unique services that revolve around lessons for kids, and it also has a special called Wine & Design on wheels where the customer can pick the venue and receive the same experience. Franchisees can partner with customers to donate a portion of their profits to a charity of the customer’s choosing.

6.  Wine & Design closed out 2019 with more than 80 locations and had broken into the West Coast market. Mills talked briefly about the expansion of the brand looking ahead to the next couple of years. She said, “We are expanding slowly and opening about 10-to-15 locations a year.”

New Location in Texas

7.  In mid-June 2019, Wine & Design opened a new location in Montgomery, Texas. Wine & Design Montgomery is owned and operated by Rachel Anderson and her sister-in-law Rachel Jahn. The Rachels hosted the grand opening of one of the few paint-and-sip concepts in Montgomery with a plan to bring something new and different to the area.

8.  According to Anderson, “We’ve been to places that are a similar concept, and they are always a good time, but there’s nothing like that really close. You’re driving 30 to 45 minutes to get to anything like that.”

9.  Although fun, Anderson said she’d never thought of opening a business quite like Wine & Design. However, that changed one night when Anderson and her husband were watching an episode of “Shark Tank,” and saw the Wine & Design concept presentation. Anderson said she was hooked on the idea and began exploring potential locations and mulling over the idea.

10.  Convinced that the Montgomery community truly would love the idea, she decided to get her sister-in-law involved and called Jahn. “It took me about 2.5 seconds to say yes. I thought it was a great idea,” Jahn said. “Not only the concept, but being in business with my brother and his wife, and keeping it in the family was very appealing.”

11.  Once Jahn was on board, Anderson and her husband flew to North Carolina to learn a little more about the concept. Construction was completed in May. Some of the cool options include painting and crafts for kids, bachelorette parties, DIY projects, team building, and Wine & Design on wheels, where the party comes to you. “We like that this franchise does not focus exclusively on canvas painting,” Anderson said. “It’s not just a paintbrush.”

Company History

12.  Wine & Design was founded in 2010 by Harriet Mills in Raleigh, North Carolina. Mills was inspired to start her own paint-and-sip business after she had spontaneously attended a class on a girls’ night out with friends. After doing extensive research on the paint-and-sip studio industry in 2009, Mills was ready to open the first Wine & Design studio the following year.

13.  After the success of the first location, Mills realized that she wanted to help other people start their own businesses and decided to start franchising the Wine & Design concept. The first franchise location opened in 2011 in Cary, North Carolina. By 2015, there were over 50 Wine & Design franchises open across the U.S.

14.  Two years later, Mills appeared on the television show “Shark Tank” to try and win investment money to help Wine & Design continue its growth. Mills accepted an offer from Kevin O’Leary, who invested $500,000 and is still a board member of Wine & Design.

Entrepreneur’s Franchise 500

15.  Wine & Design did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Wine & Design 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 Wine & Design’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

Franchised

2016

• Outlets at the Start of the Year:  60
• Outlets at the End of the Year:  70
• Net Change:  +10

2017

• Outlets at the Start of the Year:  70
• Outlets at the End of the Year:  73
• Net Change:  +3

2018

• Outlets at the Start of the Year:  73
• Outlets at the End of the Year:  74
• Net Change:  +1

Company-Owned

2016

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2018

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

Part 1 – Historical Statement of Gross Sales for Franchised Studios for Fiscal Year Ended December 31, 2018

• Wine & Design has compiled the following information from gross sales reports provided by franchisees to it in the normal course of the operation of their franchised Studios. These reports are not audited and Wine & Design has not verified the gross sales results but it has no reasonable basis to question the reliability of the gross sales reports.

• The three tables below summarize the annual gross sales of 69 of Wine & Design’s 73 franchised locations that were operating as of December 31, 2018. Wine & Design has excluded 4 franchised Studios, because they have not been opened for at least 6 months as of December 31, 2018.

Franchised Studios Open for More Than 24 Months as of December 31, 2018