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

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

• Section II – Estimated initial investment for a Sola Salons franchise, based on Item 7 of the company’s 2021 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Sola Salons franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned Sola Salons outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Sola Salons’ financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2019 and 2020 average, median, highest, and lowest gross revenue for the 370 Sola Salons franchised locations that (a) operated in the United States under a Franchise Agreement; (b) had been open for at least 25 months as of December 31, 2020; (c) submitted all required revenue reports during the 2019 and 2020 calendar years; and (d) were not under contract for purchase by the franchisor or any of its affiliates at any time during the 2019 and 2020 calendar years

Section I – Background Information

18 Things You Need to Know About the Sola Salons Franchise

Achieves Significant Franchise Development Growth in First Half of 2021

1.  In mid-July 2021, Sola Salons announced that at the close of the second quarter, it had opened 21 new locations and signed 15 franchise agreements to develop 60 new locations throughout the U.S. and Canada. The brand continued to grow its presence across North America in the first half of 2021, as it recently signed a multi-unit agreement for the Boston area and another in West Virginia. This growth came on the heels of a successful 2020 despite the pandemic, where Sola saw a 15 percent increase in stylist lead volume and reported that occupancy was at an all-time high.

2.  The company was recently recognized with numerous industry awards, including a placement on the Franchise Gator Top 100 2021 list. Additionally, the #SolaStrong campaign, created in order to support beauty professionals struggling during the closures of the pandemic, was awarded the Best Digital Campaign honor in Franchise Update Media’s Innovation Awards Marketing & Branding category. This annual award identifies and recognizes franchise brands that have created and implemented the most original and successful innovation strategies and tactics.

Announces Acquisition of Eight Franchised Locations and One Conversion

3.  In mid-September 2021, Sola Salons announced that it had successfully purchased eight units in the Sacramento market from a former Sola franchise owner. The units will now be integrated into the Sola home office’s corporate portfolio, which includes locations across Denver and the front range in Colorado and Orange County. In addition to these eight Sacramento locations, the Sola home office team is also welcoming a new Denver location that will be a conversion from a former Blue Lion Salon Studios.

4.  The eight Sacramento locations were formerly owned and operated by Sola Sacramento, a longtime franchise group led by Aaron Ramsey, Lara Ramsey, and Paul Kirby. This group of early franchise owners dedicated the past 15 years to growing Sola’s presence across the Sacramento market and developing strong and successful operations at each location.

5.  Sola also added a Denver unit to the home office’s corporate portfolio through an acquisition from competitor brand Blue Lion Salon Studios. Three additional units were purchased from Blue Lion Salon Studios by existing franchise owners in the Houston and Dallas-Fort Worth areas.

6.  All nine new locations acquired by corporate will be managed by the corporate unit operational team under Jeremy Tebo, vice president of corporate operations at Sola Salons.

7.  Christina Russell, CEO of Sola Salons, said, “We are incredibly excited to welcome these locations into our corporate portfolio and are tremendously grateful to the Sola Sacramento team in particular for their dedication to the brand for more than 15 years. Their commitment to excellence has led to great performance by all of these locations and we look forward to continuing to build upon the success they established with these newly acquired units. With this acquisition, as well as the purchase and conversion of a competitor location in Denver, we look forward to continuing to add to our corporate owned unit portfolio and experience exciting growth alongside our network of Sola franchise owners.”

8.  Jordan Levine, COO of Sola Salons, added, “With our acquisition of multiple Blue Lion locations, we’re learning how to integrate competitor units into the Sola brand. We’ve welcomed the professionals into the Sola community, giving them immediate access to our proprietary technology and resources. We look forward to facilitating more successful acquisitions in our foreseeable future.”

Marks Growth in 2021 with 600th Location Opening

9.  At the end of January 2022, Sola Salons announced its 600th location worldwide – marking the brand’s 17th location in Wisconsin. In addition to expanding the Sola franchise footprint, the brand is celebrating a year of achievements including 53 new locations, 72 signed franchise agreements, and reaching a milestone of 18,000 independent beauty professionals in 2021 throughout the U.S.

10.  Christina Russell, CEO of Sola Salons, said, “It’s been exciting to watch Sola grow at such a rapid pace throughout 2021. Reaching 600 locations nationwide is a landmark milestone for the company. Sola’s accelerated growth is the result of an innovative business model combined with a strong spirit of entrepreneurship and independence in the professional beauty industry. We continue to be motivated by the successes of our franchisees and are eager to continue this momentum in 2022.”

11.  The brand’s growth throughout North America in 2021 culminated with its 600th salon located in Janesville, Wisconsin. Behind the milestone opening is first-time franchise owner Alicia Modjeska, a former healthcare executive and U.S. Veteran. Modjeska was so impressed with the Sola business model that she came out of retirement to open her first location. Modjeska, who signed an agreement to open three Sola locations, is already searching for real estate to open her second studio.

12.  Modjeska said, “I’m thrilled to join the Sola community while spearheading the launch of a new territory for the brand, which will give job opportunities to beauty professionals in Janesville and surrounding markets. With an extensive background in corporate America, this journey with Sola is giving me the opportunity to have freedom and flexibility as a business owner while giving back to my community, and ultimately providing a successful growing business that I can one day pass down to my daughters.”

Company History

13.  Sola Salons (formerly Sola Salon Studios) was founded in 2004 by Stratton Smith and Matt Briger in Denver, Colorado. Smith and Briger wanted to create a community where independent beauty professionals could build a career they would be proud of.

14.  While Smith and Briger were first developing the concept for Sola Salons, they consulted with Denver-based stylist Kim Bennett to learn more about what was important to her in creating her dream salon. Bennett was impressed by Smith and Briger’s commitment to helping stylists achieve their dreams and she became the first Sola Salons franchisee in 2005. The company continued to grow over the next decade.

15.  To help franchisees, Sola Salons released tools and resources to make running their businesses easier. In 2016, Sola launched Sola Pro, an exclusive app, to host industry deals, special offers, and a variety of educational resources to bridge the gap between the professional beauty industry and the Sola community.

16.  The following year, Sola released SolaGenius – an all-in-one business platform launched in partnership with GlossGenius, designed to help an independent salon owner manage their schedule, customer relationship management, marketing, analytics, and payment processing.

17.  Today, Sola Salons has locations across the United States, Canada, and Brazil.

Entrepreneur’s Franchise 500

18.  Sola Salons ranked No. 50 on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Sola Salons franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• Detailed information on Sola Salons’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  362
• Outlets at the End of the Year:  413
• Net Change:  +51

2019

• Outlets at the Start of the Year:  413
• Outlets at the End of the Year:  459
• Net Change:  +46

2020

• Outlets at the Start of the Year:  459
• Outlets at the End of the Year:  512
• Net Change:  +53

Company-Owned

2018

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  13
• Net Change:  0

2019

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  25
• Net Change:  +12

2020

• Outlets at the Start of the Year:  25
• Outlets at the End of the Year:  30
• Net Change:  +5

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

Historical Gross Revenue Data

• The figures below represent the median and average Gross Revenue for each quarter during calendar years 2019 and 2020 reported by Sola Salons locations that satisfied the Reporting Criteria (as defined below).

• The following table includes information regarding the total number of Sola Salons franchise locations in the United States that met or exceeded all of the following criteria as of December 31, 2020 (“Reporting Criteria”): (a) operated in the United States under a Franchise Agreement; (b) had been open for at least 25 months as of December 31, 2020; (c) submitted all required revenue reports during the 2019 and 2020 calendar years; and (d) was not under contract for purchase by the franchisor or any of its affiliates at any time during the 2019 and 2020 calendar years.

• The Reporting Criteria excludes any Sola Salons locations (i) located outside the United States, or (ii) owned, operated, or under contract to purchase by the franchisor or any of its affiliates at any time during the 2019 and 2020 calendar years.

• Sola Salons franchise locations that temporarily closed in 2020 as a result of governmental closure orders or mandates related to COVID-19 but that otherwise met the Reporting Criteria are included in the following table.

• The median and average information for Gross Revenue was prepared from the records and reports, as reported by franchisees of each of the Sola Salons locations satisfying the Reporting Criteria as of December 31, 2020. Sola Salons has relied solely on the information reported to it by franchisees. Sola Salons does not know of an instance, nor does it have reason to believe, that any franchisee would misstate their information. However, these franchisee reports have not been audited, and Sola Salons has not verified the numbers reported.

• To calculate the median and average Gross Revenue, Sola Salons analyzed information, as reported by franchisees of each of the Sola Salons franchised locations satisfying the Reporting Criteria. Sola Salons then provided the lowest Gross Revenue amount and the highest Gross Revenue amount for such franchised locations for each quarter of the calendar years 2019 and 2020.

• Pursuant to the Franchise Agreement, “Gross Revenue” includes the total of all income derived from gross sales and gross receipts, whether the income is received by cash, credit, checks, services, property, or other means of exchange and excludes only those sales taxes that a franchisee must by law collect from customers and that the franchisee pays to the government, promotional or discount coupons to the extent that the franchisee realizes no income, and employee or lessee receipt of services, if free, or any portion not paid for by an employee or studio lessee.

• As of December 31, 2020, there were 512 Sola Salons franchised locations open and operating in the United States. Of this total, 370 (72.27%) met the Reporting Criteria and 142 (27.73%) Sola Salons locations did not meet the Reporting Criteria.

• One franchised outlet, which had been open for more than 12 months, closed during 2019. One franchised outlet, which had been open for more than 12 months, closed during 2020. No franchised outlet closed during 2019 or 2020 after being open less than 12 months.

Median and Average Gross Revenue for 2019 and 2020 for Franchised Locations Satisfying the Reporting Criteria

Q1 2019

• Average Gross Revenue:  $89,340.62
• Median Gross Revenue:  $85,637.94
• Highest Gross Revenue:  $234,095.00
• Lowest Gross Revenue:  $7,372.00

Q2 2019

• Average Gross Revenue:  $93,879.55
• Median Gross Revenue:  $89,205.83
• Highest Gross Revenue:  $234,411.00
• Lowest Gross Revenue:  $9,360.00

Q3 2019

• Average Gross Revenue:  $98,387.71
• Median Gross Revenue:  $95,611.50
• Highest Gross Revenue:  $235,898.92
• Lowest Gross Revenue:  $10,078.00

Q4 2019

• Average Gross Revenue:  $95,993.09
• Median Gross Revenue:  $94,095.65
• Highest Gross Revenue:  $240,933.00
• Lowest Gross Revenue:  $12,007.00

Full Year 2019

• Sum of Q1 to Q4 Average Gross Revenue:  $377,600.97

Q1 2020

• Average Gross Revenue:  $83,849.78
• Median Gross Revenue:  $81,323.00
• Highest Gross Revenue:  $212,886.00
• Lowest Gross Revenue:  $15,579.00

Q2 2020

• Average Gross Revenue:  $41,107.89
• Median Gross Revenue:  $39,829.05
• Highest Gross Revenue:  $164,613.00
• Lowest Gross Revenue:  $443.92

Q3 2020

• Average Gross Revenue:  $85,172.80
• Median Gross Revenue:  $81,482.00
• Highest Gross Revenue:  $218,057.84
• Lowest Gross Revenue:  $6,720.00

Q4 2020

• Average Gross Revenue:  $93,293.54
• Median Gross Revenue:  $89,139.08
• Highest Gross Revenue:  $216,278.00
• Lowest Gross Revenue:  $11,102.00

Full Year 2020

• Sum of Q1 to Q4 Average Gross Revenue:  $303,424.01

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