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

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

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

Section III – Number of franchised and company-owned Waxing the City 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 – News updates on the Waxing the City franchise opportunity

Section V – Presentation and analysis of Waxing the City’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, median, highest, and lowest gross revenues for the top 1/3, middle 1/3, bottom 1/3, and all 98 franchised Waxing the City studios that were in operation for at least 12 months as of January 1, 2021 and operated throughout 2021

• 2021 average, median, highest, and lowest gross revenues for the top 1/3, middle 1/3, bottom 1/3, and all 7 company-owned Waxing the City studios that were in operation for at least 12 months as of January 1, 2021 and operated throughout 2021

• 2021 average gross revenues, cost of goods sold, operating expenses, and earnings before owner’s compensation, interest, taxes, depreciation, and amortization for the 7 company-owned Waxing the City studios that were in operation for at least 12 months as of January 1, 2021 and operated throughout 2021

Section VI – Key ratios, comparables, computations, and analyses for the Waxing the City franchise opportunity (exclusive content for Platinum subscribers)

Section I – Waxing the City Franchise Costs

• Waxing the City franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $42,500
• Travel and Living Expenses While Training:  $1,650 to $2,350
• Deposit and Leasehold Improvements:  $4,816 to $225,066
• 3 Months’ Rent:  $14,500
• Architect/Design Fees:  $6,000 to $15,550
• Furniture, Fixtures, and Equipment:  $36,000 to $46,700
• Office Supplies:  $3,500 to $4,500
• Technology Package and Licenses:  $10,419 to $22,452
• Interior and Exterior Signage:  $16,000 to $20,100
• Initial Retail Inventory:  $4,500 to $5,500
• Initial Waxing Supply Inventory:  $6,000 to $7,000
• Grand Opening Advertising:  $25,000
• Insurance:  $2,550 to $2,850
• Miscellaneous Expenses:  $6,670 to $7,500
• Additional Funds and Working Capital for First 3 Months:  $43,860 to $51,860
• Total Estimated Waxing the City Franchise Costs:  $223,965 to $493,428

Section II – Waxing the City’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fee:  $30,000 to $42,500
• Royalty Fee:  greater of (a) the Minimum Royalty Fee ($100/week), or (b) 6% of Gross Revenue
• General Advertising and Marketing Fund Contributions:  currently 2% of your Gross Revenue each month
• Local Advertising:  $1,500 per month

Section III – Number of Franchised and Company-Owned Waxing the City Outlets

Franchised

2019

• Outlets at the Start of the Year:  95
• Outlets at the End of the Year:  107
• Net Change:  +12

2020

• Outlets at the Start of the Year:  107
• Outlets at the End of the Year:  108
• Net Change:  +1

2021

• Outlets at the Start of the Year:  108
• Outlets at the End of the Year:  118
• Net Change:  +10

Company-Owned

2019

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  9
• Net Change:  +1

2020

• Outlets at the Start of the Year:  9
• Outlets at the End of the Year:  7
• Net Change:  -2

2021

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  7
• Net Change:  0

Section IV – News Updates on the Waxing the City Franchise

• Waxing the City Opens New Location Off US 380 in North Frisco

• Why Owning a Waxing Franchise With Waxing the City Delivers Strong ROI

• Waxing the City Ranks No. 448 on Entrepreneur’s 2022 Franchise 500 List

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

Part 1 – 2021 Gross Revenues for Franchised Waxing Studios

• The Gross Revenues described below reflect the Gross Revenues reported to Waxing the City between January 1, 2021 and December 31, 2021 by the 98 franchised Waxing Studios that were in operation for at least 12 months as of January 1, 2021 and operated throughout 2021.

• One other franchised Waxing Studio that was open for 12 months as of January 1, 2021 was excluded because it permanently closed during 2021. That studio was open for more than 12 months before closing.

Average (98 Studios)

• Average Gross Revenues:  $563,626
• Number/Percentage Above Average Gross Revenues:  45/46%
• Median Gross Revenues:  $549,947
• Highest Gross Revenues:  $1,359,825
• Lowest Gross Revenues:  $173,622

Top 1/3 (33 Studios)

• Average Gross Revenues:  $805,220
• Number/Percentage Above Average Gross Revenues:  13/39%
• Median Gross Revenues:  $736,864
• Highest Gross Revenues:  $1,359,825
• Lowest Gross Revenues:  $659,030

Middle 1/3 (32 Studios)

• Average Gross Revenues:  $550,147
• Number/Percentage Above Average Gross Revenues:  16/50%
• Median Gross Revenues:  $549,947
• Highest Gross Revenues:  $658,684
• Lowest Gross Revenues:  $453,572

Bottom 1/3 (33 Studios)

• Average Gross Revenues:  $335,101
• Number/Percentage Above Average Gross Revenues:  16/48%
• Median Gross Revenues:  $329,435
• Highest Gross Revenues:  $452,256
• Lowest Gross Revenues:  $173,622

• These Gross Revenues were compiled from Waxing Studios that opened as early as November 1, 2003 and as recently as December 31, 2019.

• For the year ended December 31, 2021, the average Gross Revenues per ticket was $57.44 for these Waxing Studios. 40, or 41%, reported Gross Revenues per ticket higher than this average. The median Gross Revenues per ticket for these Waxing Studios was $56.50, and the range of the average Gross Revenues per ticket reported by these franchisees was $47.97 to $75.97.

Part 2 – 2021 Gross Revenues for Company-Owned Waxing Studios

• The Gross Revenues described below are based on the Gross Revenues reported to Waxing the City between January 1, 2021 and December 31, 2021, by the 7 company-owned Waxing Studios that were in operation for at least 12 months as of January 1, 2021 and operated throughout 2021.

• No company-owned Waxing Studios closed during 2021.

Average (7 Studios)

• Average Gross Revenues:  $547,650
• Number/Percentage Above Average Gross Revenues:  3/43%
• Median Gross Revenues:  $505,240
• Highest Gross Revenues:  $736,069
• Lowest Gross Revenues:  $364,612

Top 1/3 (2 Studios)

• Average Gross Revenues:  $720,101
• Number/Percentage Above Average Gross Revenues:  1/50%
• Median Gross Revenues:  $720,101
• Highest Gross Revenues:  $736,069
• Lowest Gross Revenues:  $704,133

Middle 1/3 (3 Studios)

• Average Gross Revenues:  $518,513
• Number/Percentage Above Average Gross Revenues:  1/33%
• Median Gross Revenues:  $505,240
• Highest Gross Revenues:  $572,533
• Lowest Gross Revenues:  $477,765

Bottom 1/3 (2 Studios)

• Average Gross Revenues:  $418,907
• Number/Percentage Above Average Gross Revenues:  1/50%
• Median Gross Revenues:  $418,907
• Highest Gross Revenues:  $473,201
• Lowest Gross Revenues:  $364,612

• These Gross Revenues were compiled from Waxing Studios that opened as early as December 2012 and as recently as January 2017.

Part 3 – 2021 Net Profit for Company-Owned Waxing Studios

• Waxing the City does not receive complete expense information from its franchisees, but it does have that information from its company-owned Waxing Studios.

• The tables below provide financial information based on the 7 company-owned Waxing Studios disclosed above for the 12 months ended December 31, 2021. The Gross Revenues shown are the Gross Revenues in the chart above for the 7 company-owned Waxing Studios.

• The expenses are the actual expenses incurred by those Waxing Studios, adjusted as described in the footnotes to reflect the expenses that would have been incurred if the Waxing Studios had been operated as franchised Waxing Studios with the same results.

Gross Revenues

• Membership Dues:  $175,043 (32.0%)
• Refunds:  ($1,776) (-0.3%)
• Service Sales:  $387,456 (70.7%)
• Product Sales:  $55,882 (10.2%)
• Sales Returns and Discounts:  ($68,954) (-12.6%)
• Total Gross Revenues:  $547,650 (100.0%)

Cost of Goods Sold

• Cost of Goods Sold – Product:  $92,105 (16.8%)
• Cost of Goods Sold – Labor:  $186,667 (34.1%)
• Total Cost of Goods Sold:  $278,771 (50.9%)

Operating Expenses

• Studio Manager Compensation:  $40,665 (7.4%)
• Commissions/Bonuses for Studio Manager:  272 (0.0%)
• Payroll Taxes on Studio Manager:  $4,650 (0.8%)
• Employee Benefits for Studio Manager:  $3,640 (0.7%)
• 401k Expense for Studio Manager:  $1,103 (0.2%)
• Part-Time Studio Coordinator Compensation:  $18,403 (3.4%)
• Payroll Taxes on Studio Coordinator:  $1,524 (0.3%)
• Employee Benefits for Studio Coordinator:  $724 (0.1%)
• 401k Expense for Studio Coordinator:  $388 (0.1%)
• Rent:  $59,794 (10.9%)
• Utilities/Telephone:  $9,481 (1.7%)
• Royalty Fees:  $32,859 (6.0%)
• Local Marketing Fees:  $18,000 (3.3%)
• Advertising Fund Contribution:  $11,211 (2.0%)
• Insurance:  $1,913 (0.3%)
• Technology Fee:  $4,903 (0.9%)
• Office Supplies:  $13,407 (2.4%)
• Credit Card Fees:  $15,384 (2.8%)
• Other:  $3,955 (0.7%)
• Conference:  $550 (0.1%)
• Total Adjusted Company-Owned Studio Operating Expenses:  $242,827 (44.3%)

Earnings Before Owner’s Compensation, Interest, Taxes, Depreciation, and Amortization (“EBITDA”):  $26,052 (4.8%)

Number/Percentage Exceeding Average EBITDA:  4/57%

• If you manage your own Waxing Studio, you would not have the expenses associated with a Studio Manager (or this would be owner’s compensation). Likewise, if a franchisee owns 2 Waxing Studios, these expenses would be about half as much for each studio as the cost of the manager could be spread out between the 2 studios.

• The company-owned Waxing Studios have 401k plans, but most of Waxing the City’s franchisees do not have them and would not have this expense.

• Waxing the City shares Studio Coordinators (receptionists) across its company-owned Waxing Studios, and averaged the labor costs across all of these studios, giving it an average of $21,039 per studio. Waxing the City allocated that amount in the chart above over base compensation, payroll taxes, benefits, and a 401K contribution for a part-time studio coordinator.

• Your reservations will be taken by your part-time studio manager, your Cerologists, and your studio coordinator(s). Waxing the City estimates your actual cost for a part-time coordinator will be between $15,000 and $35,000, depending on the number of hours they work each week and the cost of labor in your market.

• The actual rent incurred in Waxing the City’s company-owned Waxing Studios ranged from $18,000 to $77,000 a year. Your actual rent will vary significantly depending on the site you lease. This amount is based on a studio having 1,823 square feet, and a total rent, including CAM, of $32.80 per square foot that Waxing the City estimated in Item 7 that a typical franchisee would pay.

• The Franchise Agreement requires you pay a Royalty Fee equal to the greater of $100 per week and 6% of your Waxing Studio’s Gross Revenues.

• The Franchise Agreement requires you spend $1,500 per month to promote your business. Waxing the City’s actual expenses for local marketing in 2021 were slightly lower.

• The Franchise Agreement requires you contribute 2% of your Gross Revenues to Waxing the City’s General Advertising and Marketing Fund.

• This includes courier fees, dues and subscription, professional consulting fees, repairs and maintenance, Cerologist training, and miscellaneous expenses.

• Waxing the City holds its franchise conference every other year. Waxing the City estimates the costs for attendance, including travel, hotel, and the conference fee, will be $1,100. The amount shown above reflects one-half of this total since you would only attend every other year.

• These figures were prepared without an audit. Prospective franchisees or sellers of the franchises should be advised that no certified public accountant has audited these figures or expressed his/her opinion as to the content or form.

• Some Waxing Studios have sold and earned this amount. Your individual results may differ. There is no assurance that you’ll sell or earn as much.

Section VI – Waxing the City Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️