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

• Section I – Estimated initial investment (franchise costs) for a Salons by JC franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for a Salons by JC franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned Salons by JC outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

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

• Section V – Presentation and analysis of Salons by JC’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2021 average and median total square feet, net rent per square foot, 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 for the 42 franchised Salons by JC businesses that were (a) open and actively operating as of December 31, 2021, (b) opened within the past 5 calendar years, and (c) leased and built out their respective facility and provided Salons by JC with the requested data

• 2021 actual, average, and median gross sales for the 10 affiliate-owned Salons by JC businesses that were open and operating throughout the entire 2021 calendar year

• tenant occupancy rate for all 11 affiliate-owned Salons by JC businesses open as of the end of 2021, along with the average and median year-end tenant occupancy rate

• Section VI – Key ratios, comparables, computations, and analyses for the Salons by JC franchise opportunity (exclusive content for Platinum subscribers)

Section I – Salons by JC Franchise Costs

• Salons by JC franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $50,000
• Initial Training:  $0 to $1,000
• Travel and Living Expenses During Training:  $1,500 to $2,500
• Site Selection Assistance and/or Site Evaluation Expenses:  $0 to $1,000
• Security Deposits – Lease and Utilities:  $10,000 to $35,000
• Insurance Premium (3 months):  $900 to $1,500
• Business License and Permits:  $100 to $300
• Rent (3 months):  $0 to $65,000
• Blueprints, Plans, Permits, Architectural Fees:  $45,000 to $65,000
• Leasehold Improvements:  $780,000 to $1,170,000
• Signage and Graphics:  $8,000 to $25,000
• Furniture, Fixtures, and Equipment:  $85,000 to $175,000
• Internet (3 months):  $375 to $900
• Initial Inventory and Operating Supplies:  $2,000 to $4,000
• Initial Marketing Spend:  $15,000 to $20,000
• Additional Funds (3 months):  $10,000 to $20,000
• Total Estimated Salons by JC Franchise Costs:  $1,007,875 to $1,636,200

Section II – Salons by JC’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Salons by JC’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $50,000
• Royalty Fee:  the greater of 5.5% of Gross Sales or a minimum royalty payment of $500 per month
• Local Advertising Requirement:  up to $1,000 per month, depending upon specific marketing deemed necessary by Salons by JC
• Brand Development Fund:  1% of Gross Sales

Section III – Number of Franchised and Company-Owned Salons by JC Outlets

Franchised

2019

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

2020

• Outlets at the Start of the Year:  89
• Outlets at the End of the Year:  102
• Net Change:  +13

2021

• Outlets at the Start of the Year:  102
• Outlets at the End of the Year:  107
• Net Change:  +5

Company-Owned

2019

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

2020

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

2021

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  11
• Net Change:  +1

Section IV – Background Information on the Salons by JC Franchise

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

Salons by JC in Williamson, Tennessee Attracts High-End Talent to Historic Downtown

1.  In early 2022, Salons by JC in Williamson, Tennessee said that it had leased seven of its units to beauty-industry businesses. Positioned on the corner of 1st Avenue South and East Main Street, the 37,000-square-foot retail development was completed in 2020 during the heat of the pandemic. Many of its tenants are brand new lessees who have snagged spaces this year like Flower + Field Beauty who relocated from the Westhaven Golf Club to move into Salons by JC, a collaborative space for beauticians.

2.  Beth Wade’s advent brought Flower + Field in late January around the same time that six other beauty establishments brought new licenses to Salons by JC suites: Alexandrea’s Lashes, Bangs Beards & Bourbon, Blue Suede Salon, Hair by Aleah, Hair Therapy Salon, and Morgan Stradiot Luxury Extensions.

3.  Alexandrea’s Lashes offers a variety of eyelash and brow services including lash extensions, hair removal, and waxes – the latter for not only brows but also lips. Leah Luther is a licensed, double-certified esthetician who established Alexandrea’s Lashes at 99 E. Main St., suite 22.

4.  Bangs, Beards & Bourbon provides hair coloring, styling, and cuts in suite 11. Their staff of three educated technicians aims to foster relationships with patrons to help clients plan the growth of their hair to realize long-term hair goals both for growth and for style.

5.  Blue Suede Salon is the third location for a preexisting franchise launched in Eagle, Col., and it is the first location to reach Tennessee. It comes from prolific hair specialist Ryan Collingwood who opened one of the aforementioned Colorado shops, and he plans to travel back and forth between his Colorado space and the new one in suite 32 of 1st and Main. Collingwood previously ran one of the most prominent salons in San Diego, Ryan Thomas Hair Studio.

6.  Morgan Stradiot Extensions boasts of bringing the first certified hair lingerie specialist to the Nashville area, also operating as a uniquely certified Kacey Welch Method artist. The Kacey Welch Method is a luxury extension method using patented silk wefts.

7.  Salons by JC already has a Cool Springs location in addition to other Nashville-area establishments in Murfreesboro, Mt. Juliet, and downtown Nashville.

Opens New Location in Minnesota

8.  In early October 2021, Salons by JC opened one of its newest locations in Cottage Grove, Minnesota. The location is owned and operated by Karen and Ron Ruckdashel. The married couple of 28 years lives in Hastings, MN.

9.  “Creative” is a word that Karen would use to describe herself. After graduating high school, she attended Hastings Beauty School. Then, she pursued a career in beauty for over three decades and counting. Ron is a “logistical” mechanic and engineer, as labeled by Karen. In an interview with a local newspaper, Karen illustrated how their relationship was complementary. “We really have skill sets that balance each other out really well.”

10.  Karen Ruckdashel added, “The salon suites, for us, is kind of a capstone for my career. To be able to take all of the years and miles of education and development in my industry and provide a space for new business owners to come in and I can help them, not just be a landlord but someone who can be a resource for them. It was a way to give back to the industry, I think.”

11.  Ron Ruckdashel said, “We envision a great new Salons by JC location that will access and serve a large population of beauty and wellness professionals in the area.”

Company History

12.  Salons by JC was founded in 1998 by Jack Griffey and Cecil Miller in Dallas, Texas. Griffey was first introduced to the salon suite concept by his wife, Elke, who was a hairstylist, after the salon she worked for closed. Elke began searching for a new salon and stumbled on the salon suite concept. Although the space was small, Elke became her own boss and was able to bring over all of her old clientele. Griffey was impressed by what he saw and wanted to develop his own salon suite concept.

13.  After conducting more research into salon suites, Griffey brought in Miller and they launched Salons by JC. The first location was a success and in 2001, Griffey’s son, who had moved to San Antonio, asked if he could open another location in the area. After several years of successfully running the first few Salons by JC locations, Griffey and Miller began franchising in 2008. Today, there are Salons by JC locations around the United States and Canada.

Entrepreneur’s Franchise 500

14.  Salons by JC ranked No. 373 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Salons by JC Franchise (Item 19, 2022 FDD)

• Part 1A of this Item 19 discloses certain historical data regarding the premises and construction costs for the 42 franchised Salons by JC Businesses that were (a) open and actively operating as of December 31, 2021, (b) opened within the past 5 calendar years, and (c) leased and built out their respective Facility and provided Salons by JC with the requested data that is detailed in Part 1A (the “Part 1 Franchised Facilities”).

• Part 1A excludes (i) 4 of the first franchised Salons by JC Businesses 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”); (ii) 58 franchised Salons by JC Businesses that opened prior to January 2017; and (iii) 3 franchised Salons by JC Businesses that own the building containing their facility.

• Three franchised Salons by JC Businesses purchased the Facilities for their Salons by JC Businesses. Because of this, these three franchised Salons by JC Businesses are not included in Part 1A, but Salons by JC has included their Gross Sales information in Part 1B.

• Part 1B of this Item 19 discloses Gross Sales generated by the 104 franchised Salons by JC Businesses that were open and actively operating as of December 31, 2021, and excludes the three Non-Reporting Franchisees discussed in the preceding paragraph.

• Part 2 of this Item 19 discloses the average Gross Sales generated by the 10 affiliate-owned Salons by JC Businesses (“Affiliate-Owned Facilities”) that were open and operating throughout the entire 2021 calendar year.

• Part 2 excludes one affiliate-owned Salons by JC Business that the franchisor reacquired from a franchisee in 2021 because it was not operated as an affiliate-owned Facility for the entirety of the 2021 calendar year.

• The Affiliate-Owned Facilities do not pay Royalty Fees, Fund Contributions, and are not subject to the Local Advertising Requirement, which a franchised Salons by JC Business will have to pay. Salons by JC does not currently charge the Technology Fee.

• The Affiliate-Owned Facilities included in this financial performance representation offer similar services and face a similar degree of competition anticipated for the franchised Salons by JC Businesses offered under the Franchise Disclosure Document.

• Part 3 of this Item 19 discloses the average tenant occupancy rate for all 11 Affiliate-Owned Facilities as of the end of 2021, as well as an average overall tenant occupancy rate for each Affiliate-Owned Facility.

Part 1A – Premises, Lease, and Construction Cost Information for Part 1 Franchised Facilities During the 2021 Calendar Year

Average

• Average Total Square Feet:  7,434
• Average Net Rent Per Square Foot:  $25.43
• Average Free Rent (Days):  117
• Average Free Rent Total Dollars:  $70,107.23
• Average Tenant Improvement Allowance:  $354,739
• Average Total Leasable Square Footage:  4,441
• Average Leasable Square Footage %:  59%
• Average Construction Cost Per Square Foot:  $122.65

Median

• Median Total Square Feet:  7,327
• Median Net Rent Per Square Foot:  $23.00
• Median Free Rent (Days):  120
• Median Free Rent Total Dollars:  $41,337
• Median Tenant Improvement Allowance:  $285,398
• Median Total Leasable Square Footage:  4,384
• Median Leasable Square Footage %:  59%
• Median Construction Cost Per Square Foot:  $119.29

Part 1B – Gross Sales Generated by Franchised Facilities for the 2021 Calendar Year

• Average:  $488,603.11
• Median:  $500,659.98
• Total That Met or Exceeded Average:  52 (51%)

• “Total Square Feet” means the total amount of square feet that a given Part 1 Franchised Facility has under management, including: (i) portions of a premises that are leased as an individual suite to potential customers (each, a “Suite”); and (ii) all other square footage that makes up the Facility for the Part 1 Franchised Facility.

• “Net Rent Per Sq. Ft.” means the net rent charged per square foot under the lease for the premises of each Part 1 Franchised Facility. Net Rent for a given Part 1 Franchised Facility (i) does not account for the corresponding Free Rent or Tenant Improvement Allowance, if any, that the landlord provided to the franchise owner of that Facility (and as disclosed more fully in the table above), and (ii) is not the same as “triple net” rent.

• “Free Rent (Days)” means the number of days, if any, that the landlord for the premises of a given Part 1 Franchised Facility (each, a “Lessor”) agreed not to charge the owner of that Facility as part of the negotiations to incentivize the owner to enter into the lease.

• If a Part 1 Franchised Facility has Free Rent (Days), then the term “Free Rent Total Dollars” means the dollar value of the Free Rent over that number of Days, which is calculated by taking the applicable rent per day and multiplying it by the number of Free Rent (Days).

• “Tenant Improvement Allowance” means the total dollar amount that the Lessor for the premises of a given Part 1 Franchised Facility agreed to pay, contribute, or credit in connection with gross construction costs associated with building out that Facility as part of the negotiations to incentivize the franchise owner to enter into a lease for that premises.

• “Leasable Square Footage” for a given Part 1 Franchised Facility means the actual square footage at that Facility that can be leased/subleased to a third party (rather than the Total Square Footage). Please note that Salons by JC only had data for 39 of the 42 Part 1 Franchised Facilities. As such, the average, median, and percentage met or exceeded are calculated using 39 as the total for this category.

• “Leasable Square Footage %” for each Part 1 Franchised Facility is calculated by taking the total Leasable Square Footage for that Facility, and dividing that figure by the Total Square Feet for that Facility. Please note that Salons by JC only had data for 38 of the 42 Part 1 Franchised Facilities. As such, the average, median, and percentage met or exceeded are calculated using 38 as the total for this category.

• “Construction Cost Per Sq. Ft.” for a given Part 1 Franchised Facility is calculated by taking: (i) the gross construction costs incurred in connection with leasehold improvements made at that Facility, as well as costs incurred in connection with obtaining and/or installing fixtures, laundry room equipment (washers and dryers), break room equipment, vending machines, exterior signage, common area chairs, access key entry system, and standard office equipment at that Facility; and (ii) dividing this figure by the Total Square Feet for that Facility.

• Please be advised that these construction costs for the Part 1 Franchised Facilities were incurred prior to the time that Facility first opened and commenced operations. The gross construction costs that you incur in connection with building out your Salons by JC Business at this time may be higher due to inflation, increases in costs of labor/materials, and other factors. Please note that Salons by JC only had data for 26 of the 42 Part 1 Franchised Facilities. As such, the average, median, and percentage met or exceeded are calculated using 26 as the total for this category.

• “Gross Sales” means the total revenue generated by your Salons by JC Business, including all revenue generated from leasing salon suites at your Facility and all amounts paid by Operators and/or their clientele for vending, laundry, and any other Approved Products or Approved Services offered at your Facility, whether such revenues are evidenced by cash, check, credit, charge, account, barter, or exchange.

• Gross Sales does not include the sale of products or services for which refunds have been made in good faith to customers, the sale of equipment used in the operation of the Salons by JC Business, any sales tax or other taxes collected from customers by you and paid directly to the appropriate taxing authority, or any reduction in revenue due to coupon sales.

Part 2 – Actual, Average, and Median Gross Sales During the 2021 Calendar Year for the 10 Affiliate-Owned Facilities

• Facility No. 1:  $449,488.08
• Facility No. 2:  $397,978.50
• Facility No. 3:  $692,168.01
• Facility No. 4:  $504,576.03
• Facility No. 5:  $756,914.92
• Facility No. 6:  $404,250.93
• Facility No. 7:  $302,463.96
• Facility No. 8:  $603,675.23
• Facility No. 9:  $455,337.15
• Facility No. 10:  $539,645.94
• Average Gross Sales:  $510,649.88
• Median Gross Sales:  $479,956.59
• Number and Percentage Exceeding Average:  4 (40%)
• High Gross Sales:  $756,914.92
• Low Gross Sales:  $302,463.96

Part 3 – Tenant Occupancy Rate as of the End of 2021 and Average and Median Year-End Tenant Occupancy Rate for the 11 Affiliate-Owned Facilities

Facility 1

• Open Date:  9/1/1998
• Number of Suites:  40
• Tenant Occupancy Rate as of the End of 2021:  95%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  86%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  85%

Facility 2

• Open Date:  2/1/2000
• Number of Suites:  37
• Tenant Occupancy Rate as of the End of 2021:  87%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  84%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  87%

Facility 3

• Open Date:  5/1/2002
• Number of Suites:  56
• Tenant Occupancy Rate as of the End of 2021:  97%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  99%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  99%

Facility 4

• Open Date:  5/1/2004
• Number of Suites:  42
• Tenant Occupancy Rate as of the End of 2021:  91%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  89%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  91%

Facility 5

• Open Date:  6/1/2007
• Number of Suites:  55
• Tenant Occupancy Rate as of the End of 2021:  99%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  97%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  96%

Facility 6

• Open Date:  7/1/2010
• Number of Suites:  31
• Tenant Occupancy Rate as of the End of 2021:  95%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  86%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  84%

Facility 7

• Open Date:  12/1/2012
• Number of Suites:  32
• Tenant Occupancy Rate as of the End of 2021:  83%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  81%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  83%

Facility 8

• Open Date:  3/10/2014
• Number of Suites:  44
• Tenant Occupancy Rate as of the End of 2021:  99%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  96%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  99%

Facility 9

• Open Date:  12/2/2014
• Number of Suites:  44
• Tenant Occupancy Rate as of the End of 2021:  89%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  78%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  75%

Facility 10

• Open Date:  7/1/2011
• Number of Suites:  40
• Tenant Occupancy Rate as of the End of 2021:  95%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  93%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  93%

Facility 11

• Open Date:  9/1/2021
• Number of Suites:  30
• Tenant Occupancy Rate as of the End of 2021:  59%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  59%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  59%

• The “Tenant Occupancy Rate” for each Affiliate-Owned Facility was calculated by taking the total number of Suites leased by that Facility as of December 31 of the calendar year, and dividing that number by the total number of Suites that Facility has available to lease at its respective Facility.

Section VI – Salons by JC Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️