Detailed Estimates of Sola Salon Studios Franchise Costs Based on Item 7 (Estimated Initial Investment) of Sola Salon Studios’ 2020 Franchise Disclosure Document
1. Initial Franchise Fee: $55,000
- The Initial Franchise Fee for a New Franchisee is $55,000. If you are an Existing Franchisee, you may purchase additional individual franchises at a discounted Initial Franchise Fee of $41,000.
- Sola Salon Studios will not refund the Initial Franchise Fee(s) or any other fees paid to it or its affiliates under any circumstances.
- Sola Salon Studios or its affiliate may, as part of the National Lease Program if any, act as a limited guarantor for your lease for a period up to three years.
- Neither Sola Salon Studios nor its affiliates offer any other financing.
2. Travel and Living Expenses: $2,500 to $4,000
3. Site Selection Assistance: $0 to $3,500
- Sola Salon Studios may charge the Site Selection Assistance Fee if you request it to send a representative more than once to conduct on-site evaluations of proposed location(s) for your Business.
- The high estimate of $3,500 includes a $2,500 flat fee plus two days on-site at a rate of $500 per day. If Sola Salon Studios is on-site for more than two days, you will pay $500 for each additional day. You must also pay Sola Salon Studios’ travel, meals, and living expenses.
4. Rent Manager Property Management Software (6 months): $582 to $882
- Sola Salon Studios requires you to use Rent Manager Property Management Software under Sola Salon Studios’ national account. You will purchase from Sola Salon Studios a sublicense to use the Rent Manager Property Management Software.
- You will incur a one-time set-up fee per account and an additional monthly fee per account for as long as your account is active.
- You will incur additional costs if you choose to maintain more than one account and depending on when you decide to activate your account. Most franchisees elect to maintain one account for their location(s) and activate that account 3-6 months prior to opening their first location.
- You may also incur additional monthly fees if you elect to utilize text messaging services available through Rent Manager.
- The Rent Manager Property Management Software expenditure low estimate includes a $150 setup fee and a $72 per month fee for your first 6 months of activation for one account. The Rent Manager Property Management Software high estimate includes a $150 set-up fee, a $72 per month fee for your first 6 months of activation, and an additional $50 per month fee for text messaging services for your first 6 months of activation for one account.
- You will continue to incur the monthly fee for so long as you have an active account.
- These amounts are subject to change.
5. Lease Conformance Fee: $0 to $7,500
6. Rent or Real Estate: $10,000 to $45,000
- If you do not own adequate space, you must lease the space for your Business. Generally, this will include first and last months’ rent, plus a security deposit equal to one month’s rent payment.
- The numbers provided cover the interior build out of a location and are based on Sola Salon Studios’ 16 years of experience in the salon business and over 14 combined years in the real estate industry.
- These costs are the same regardless of whether you buy a building or lease space.
- These estimates are based on the build out of one location. If you purchase multiple franchises at one time, you will incur additional expenses for each location purchased.
- Typical franchises are located in commercial centers, strip centers, buildings on commercial streets with heavy traffic, malls, and office buildings. Generally, Sola Salon Studios are located in an existing shopping center with a minimum of 3,000 square feet.
- Sola Salon Studios bases its low-end estimate for Rent or Real Estate on the assumption that the gross annual rental rate will be $20 per square foot for the 3,000 square feet, with the landlord requiring a security deposit equal to one month’s rent and prepayment of one month’s rent.
- The high-end estimate assumes 9,000 square feet with a gross annual rental rate of $30 per square foot, with a security deposit equal to one month’s rent and pre-payment of one month’s rent.
- If available, you may also participate in Sola Salon Studios’ National Leasing Program.
- Legal fees are included in Sola Salon Studios’ estimates for leasing the premises but not for the purchase of real estate. The purchase of real estate may have additional legal expenses.
7. Improvements/Conversions: $285,000 to $1,080,000
- If you purchase cabinetry from Sympateco, Inc., then Sympateco, Inc., for an additional fee, will prepare your initial design plans. If you purchase cabinetry from Kaemark Incorporated or other approved cabinet vendor, then you must purchase design services from Sola Salon Studios. Sola Salon Studios will charge you an additional fee for these services.
- In either case, these additional fees will vary depending on the complexity and size of your project. Sola Salon Studios estimates these fees will be between $5,000 and $15,000.
- Franchise locations typically range from 18 Studios to 43 Studios (3,000 to 9,000 square feet).
- Your location will typically be leased, although some franchisees own their locations.
- Individual Studios should be equipped with cabinets, mirrors, styling chair, etc.
- You will license individual studios to salon professionals for one or two-year terms. License payments are collected weekly for the most part; however, in certain markets, you may elect to collect monthly.
- Franchisees can choose whether to office from home, maintain onsite offices, or lease other space. This is not a Sola requirement.
- The costs will vary widely and may be significantly higher than projected in this table depending on such factors as property location, population density, economic climate, prevailing interest rates and other financing costs, conditions of the property, and extent of alterations required for the property.
- You should investigate all of these costs in the area where you wish to establish a Sola Salon Studios franchise.
8. Furniture and Fixtures: $135,000 to $405,000
9. Lease Guarantee Fee: $0 to greater of $1,500 or 15% of your monthly base rent
- If you participate in the National Leasing Program, you will be required to pay the Lease Guarantee Fee.
10. Signage: $5,000 to $13,000
11. Miscellaneous Opening Costs: $1,000 to $13,000
- Includes other deposits, utility costs, telephone, Internet and communications costs, and incorporation fees.
12. Operating Supplies: $1,000 to $5,000
- You must purchase an initial inventory of cleaning supplies and other operating supplies.
13. Advertising/Marketing: $10,900 to $20,000
- The advertising and marketing expenditure includes local marketing of $300 per month for 3 months, which represents a quarter of the annual requirement of $3,600 per year in local marketing expenditure.
- Sola Salon Studios also recommends you spend an additional minimum of $10,000 towards pre-opening and post-opening marketing in your individual market during the first year of operation.
14. Insurance (yearly basis): $5,000 to $10,000
15. Computer Equipment and Software: $1,300 to $2,300
- You will be required to purchase or license computer equipment and software for the operation of your Sola Salon Studios franchise, including, but not limited to, a sublicense from Sola Salon Studios for the Rent Manager Property Management Software.
- While Sola Salon Studios does not require any specific vendors for computer, Internet, and communications equipment, Sola Salon Studios requires that you meet certain minimum standards established periodically in the Manual.
16. Additional Funds for Initial 3 Months: $20,000 to $50,000
- Based on Sola Salon Studios’ experience with its Affiliate locations, this estimates your initial startup expenses for an initial three-month period, not including payroll costs, and does not include any revenue generated by the operation of your Business. These figures are estimates, and Sola Salon Studios cannot guarantee that you will not have additional expenses starting your Business.
17. Total: $532,282 to $1,715,682
- Sola Salon Studios relied on 16 years of experience in the salon business and over 14 combined years in the real estate industry to compile these estimates.