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

• Section I – Background information on the Salons by JC franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Salons by JC franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Salons by JC franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Salons by JC outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Salons by JC’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• average and median square feet under management, net rent, free rent (days), free rent total dollars, tenant improvement allowance, total leasable square footage, leasable square footage %, construction cost per square foot, and gross sales during the 2019 calendar year for the 82 franchised Salons by JC Facilities that were (a) open and actively operating as of December 31, 2019, and (b) leased and built out their respective premises and provided Salons by JC with the aforementioned data

• actual, average, and median gross sales for the 10 affiliate-owned Salons by JC Facilities that were open and operating throughout the entire 2019 calendar year

• average number of salon suites leased by the 78 franchised Salons by JC Facilities that were open and actively operating prior to December 31, 2018 as of the following dates: (i) 3 months after the Facility opens; (ii) 6 months after the Facility opens; (iii) 9 months after the Facility opens; and (iv) 12 months after the Facility opens

• tenant occupancy rate for each of the 10 affiliate-owned Salons by JC Facilities as of the end of 2019, along with the average and median year-end tenant occupancy rate

Section I – Background Information

21 Things You Need to Know About the Salons by JC Franchise

Celebrates 100th Location at Third Annual Franchise Owners Conference

1.  In early November 2019, Salons by JC held its 3rd annual Salons by JC Franchise Owners Conference. Over 75 Salons by JC franchise owners and vendors attended the 3-day conference that took place at the beautiful and historic Omni La Mansion del Rio hotel in San Antonio, Texas.

2.  When asked why the annual conference is so important, Drew Johnston, vice president of operations for Salons by JC, said, “Our conference is always a great opportunity for our franchisees to come together and learn from one another and celebrate the many successes of the year.”

3.  The conference kicked off with an exclusive mixer at The Fairmount Hotel Rooftop Bar. Franchisees from across Salons by JC’s system were able to catch up with one another while enjoying some cocktails. New members of the Salons by JC team also had the opportunity to meet many of the franchise owners in person for the first time.

4.  New to the agenda last year was The President’s Circle Dinner hosted by founders Jack Griffey, Cecil Miller, and Steve Griffey (president). The VIP dinner honored past Franchisee of the Year winners and the newest addition to that elite club. The dinner took place at NONNA Osteria located inside of The Fairmount Hotel.

5.  The highlight of the first day of the conference was the presentation of awards for Concierge of the Year, highest occupancy honors, presentation of the 100th franchise location, and Suite of the Year – Salons by JC’s newest award. Concierge of the Year honors was awarded to Miriah Clasen, concierge at Salons by JC’s Uptown, Minnesota location owned by April Simek.

6.  Clasen has been with the Salons by JC community for 3 years. She has worked at all 3 locations owned by Simek – Minnetonka, Southdale-Edina, and most recently, Uptown. Clasen is passionate about her job and the success of each location and each individual salon suite owner. Clasen was unable to attend the conference due to a new addition to her family, her son Owen.

7.  The company celebrated its 21st year in the industry and also the opening of its 100th location. That honor was bestowed upon the Greenville, South Carolina location owned by Wayne Kosbe and Rick Schwartz. Kosbe and Schwartz have been working hand in hand with the corporate operations and marketing teams, gaining momentum for their opening.

8.  Nick Dunlap, director of marketing for Salons by JC, said, “A huge part of each location’s success is based upon having a solid organizational structure and that is what Wayne and Rick have created. They really took the time and paid attention to our advice and suggestions. It shows as they are opening with 11 signed leases.”

9.  The highlight of the conference came at the end of the day with the crowning of the 2019 Franchisee of the Year. The award went to Cyndi and Peter Scher who own 3 locations in Florida – Hollywood, Palm Beach Gardens, Kendale Lakes, and the soon to open Kendall Palms. Cyndi and Peter are franchise veterans who started their careers in the food franchise industry. They have taken what they have learned from past experiences and developed a successful mix for their locations in the salon suite industry.

10.  The husband and wife team delegated duties to one another in order to have their business run at peak performance. Peter manages all operations, while Cyndi controls all marketing efforts. According to Cyndi, “We took into consideration our areas of expertise as we opened store number 3. This worked perfectly for us and as we prepare to open store number 4, we are running like a well-oiled machine.”

Provides Tips for How Salon Owners Should Communicate with Clients During COVID-19 Pandemic

11.  In mid-March 2020, as many states were entering lockdown as the COVID-19 pandemic became more serious, Salons by JC provided crucial tips for its franchise owners on how to convey important information to clients as the pandemic continues.

12.  According to Salons by JC, as independent beauty professionals, salon owners have the ability to speak directly to their clients about the steps they are taking to make sure that their business adheres to the state agency-mandated sanitation as well as any extra precautions salon owners are taking above and beyond those measures.

13.  The most distinctive advantage Salons by JC owners have over traditional salons is the fact that they can control client flow into their suites and even the hours they are offering services.

14.  Clear, concise, and responsible social posts aimed directly at clients that convey an owner’s willingness to support them in challenging times can go a long way to keep these salon owners top of mind as both a beauty professional and a trusted friend.

15.  Salons by JC said that the best and most proactive way to do this is for salon owners to call their clients directly and assure them that the salon was still open for business and that direct steps have been taken to ensure clients’ well-being. During the call, it would be prudent to let clients know the following:

• Salon owner has followed their state board rules for sanitation and cleanliness;
• Salon owner has taken extra measures to exceed sanitation requirements in their suite;
• Salons by JC as a company has reinforced its commitment to ensuring the facility is sanitized;
• Salons by JC owners have the advantage of a lockable space with low activity as compared to other retail businesses;
• (If they are willing) salon owners can adjust their hours to provide services at low volume times in the salon.

16.  Salons by JC also noted that updating clients on social media platforms is just as important as direct messaging. Short, simple, and clear messages directly aimed at the following topics should be useful. Salons by JC encourages salon owners to address the following topics:

• Cleanliness/sanitization
• Cancellations
• Hours of businesses
• Salon Owner contact information
• What Salons by JC is doing

17.  The Salons by JC family is closely monitoring communications and news about the COVID-19 situation and will take all actions necessary to keep its salons and communities safe and healthy during these trying times. Salon owners will keep clients updated with any news or changes that come from corporate.

Company History

18.  Salons by JC was founded in 1998 by Jack Griffey and Cecil Miller in Dallas, Texas. Unlike a traditional salon, Salons by JC offers individual suites to hairdressers instead of the typical open-floor salon layout. This unique approach to salons was developed by Griffey after the salon that his wife worked at closed down.

19.  After worrying about having to move her clientele to another salon, Griffey’s wife did some research and found a place that offered salon suite ownership. Griffey was impressed by his wife’s new solo salon and saw the opportunity to turn this idea into a large business. So, Griffey enlisted the help of his friend and business partner, Cecil Miller, and together they launched Salons by JC.

20.  The first Salons by JC location was a success and Griffey and Miller followed it up with a second location in 2001 when Griffey’s son showed interest in the business. In 2008, Griffey and Miller launched a franchising program for Salons by JC and the company grew around the U.S. over the next decade. Today, there are also Salons by JC locations in Canada.

Entrepreneur’s Franchise 500

21.  Salons by JC ranked No. 347 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Salons by JC franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Salons by JC’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  63
• Outlets at the End of the Year:  74
• Net Change:  +11

2018

• Outlets at the Start of the Year:  74
• Outlets at the End of the Year:  82
• Net Change:  +8

2019

• Outlets at the Start of the Year:  82
• Outlets at the End of the Year:  89
• Net Change:  +7

Company-Owned

2017

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  10
• Net Change:  0

2018

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  10
• Net Change:  0

2019

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  10
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• Part 1 of this Item discloses certain historical data regarding the premises and construction costs, as well as Gross Sales and certain other information, for the 82 franchised Facilities that were (a) open and actively operating as of December 31, 2019, and (b) leased and built out their respective premises and provided Salons by JC with the data detailed in Part 1 so that Salons by JC could disclose it in this Item (the “Part 1 Franchised Facilities”).

• Part 1 excludes (i) 4 of Salons by JC’s first franchised Facilities that are governed by a different form of franchise agreement that does not require them to report the relevant information to Salons by JC (the “Non-Reporting Franchisees”); and (ii) 3 franchised Facilities that purchased their premises and therefore were not able to provide Salons by JC with certain information disclosed in Part 1.

• Part 2 of this Item discloses the average Gross Sales generated by the affiliate-owned Facilities that were open and operating throughout the entire 2019 calendar year.

• Part 2 excludes all franchised Facilities since Gross Sales information for the franchised Facilities is disclosed in Part 1.

• Part 3 of this Item discloses the number of salon suites leased by each of Salons by JC’s 78 franchised Facilities that were open and actively operating prior to December 31, 2018 as of the following dates: (i) 3 months after the Facility opens; (ii) 6 months after the Facility opens; (iii) 9 months after the Facility opens; and (iv) 12 months after the Facility opens.

• Part 3 excludes: (i) the 7 franchised Facilities that were not open and operating prior to December 31, 2018 because they did not have a full year of data as of December 31, 2019 to share with Salons by JC; and (ii) the 4 Non-Reporting Franchisees.

• Part 4 of this Item discloses the average tenant occupancy rate for all 10 of Salons by JC’s affiliate-owned Facilities (each, a “Corporate Facility”) as of the end of 2019, as well as an average overall tenant occupancy rate for each Corporate Facility amongst the applicable years that Corporate Facility was open.

Part 1 – Premises, Lease, and Construction Cost Information for Part 1 Franchised Facilities

Average