In this exclusive Franchise Chatter 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 2023 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 2023 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 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Salons by JC franchise opportunity

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 2023 FDD, including information on the:

• 2022 average, median, high, and low total square feet, net rent per square foot, free rent (days), free rent total dollars, tenant improvement allowance, total leasable square footage, and leasable square footage % for the 108 franchised Salons by JC businesses that (a) were open and actively operating as of December 31, 2022, and (b) leased and built out their respective facility and provided Salons by JC with the requested data

• 2022 average, median, high, and low total gross sales for the 103 franchised Salons by JC businesses that were open and actively operating for at least one full calendar year as of December 31, 2022

• 2022 actual, average, and median gross sales for the 11 affiliate-owned Salons by JC businesses that were open and operating throughout the entire 2022 calendar year

• tenant occupancy rate for the 11 affiliate-owned Salons by JC businesses open as of the end of 2022, 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 2023 FDD:

• Initial Franchise Fee:  $60,000
• 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:  $62,200 to $93,300
• Leasehold Improvements:  $1,002,000 to $1,503,000
• Signage and Graphics:  $12,480 to $18,720
• Furniture, Fixtures, and Equipment:  $133,800 to $200,700
• 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:  $1,310,355 to $2,026,920

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 2023 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

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

2022

• Outlets at the Start of the Year:  107
• Outlets at the End of the Year:  124
• Net Change:  +17

Company-Owned

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

2022

• Outlets at the Start of the Year:  11
• Outlets at the End of the Year:  11
• Net Change:  0

Section IV – News Updates on the Salons by JC Franchise

• Salons by JC Ranked No. 308 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Salons by JC Franchise (Item 19, 2023 FDD)

• Part 1A of this Item 19 discloses certain historical data regarding the premises and lease costs for the 108 franchised Salons by JC Businesses that (a) were open and actively operating as of December 31, 2022, and (b) 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) four of Salons by JC’s 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) four franchised Salons by JC Businesses that own the building containing their facility; and (iii) eight franchised Salons by JC Businesses which were conversion facilities and, as such, could not provide applicable data.

• In certain instances, Salons by JC was unable to gather leasable square footage values, in which case it has left these values as “unknown” or “N/A” in the table below.

• Part 1B of this Item 19 discloses Gross Sales generated by the 103 franchised Salons by JC Businesses that were open and actively operating for at least one full calendar year as of December 31, 2022.

• Part 1B excludes: (i) the 17 franchised Salons by JC Businesses that were not open and operating prior to December 31, 2021, because they did not have a full year of data as of the Issue Date of the current Disclosure Document to share with Salons by JC; and (ii) the 4 Non-Reporting Franchisees.

• Part 2 of this Item 19 discloses the Gross Sales generated by Salons by JC’s 11 affiliate-owned Salons by JC Businesses (“Affiliate-Owned Facility(ies)”) that were open and operating throughout the entire 2022 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 2022, as well as an average overall tenant occupancy rate for each Affiliate-Owned Facility.

Part 1A – Premises and Lease Cost for Part 1 Franchised Facilities During the 2022 Calendar Year

Average

• Average Total Square Feet:  7,386
• Average Net Rent Per Square Foot:  $23.19
• Average Free Rent (Days):  111
• Average Free Rent Total Dollars:  $56,886.95
• Average Tenant Improvement Allowance:  $283,711.00
• Average Total Leasable Square Footage:  4,351
• Average Leasable Square Footage %:  59%

Median

• Median Total Square Feet:  7,199
• Median Net Rent Per Square Foot:  $21.00
• Median Free Rent (Days):  120
• Median Free Rent Total Dollars:  $41,374.17
• Median Tenant Improvement Allowance:  $250,000.00
• Median Total Leasable Square Footage:  4,281
• Median Leasable Square Footage %:  59%

High

• High Total Square Feet:  16,253
• High Net Rent Per Square Foot:  $65.00
• High Free Rent (Days):  660
• High Free Rent Total Dollars:  $528,222.49
• High Tenant Improvement Allowance:  $1,027,950.00
• High Total Leasable Square Footage:  11,615
• High Leasable Square Footage %:  71%

Low

• Low Total Square Feet:  4,116
• Low Net Rent Per Square Foot:  $7.00
• Low Free Rent (Days):  0
• Low Free Rent Total Dollars:  $ –
• Low Tenant Improvement Allowance:  $ –
• Low Total Leasable Square Footage:  2,143
• Low Leasable Square Footage %:  50%

Part 1B – Gross Sales Generated by Franchised Facilities for the 2022 Calendar Year

• Average:  $548,974.89
• Median:  $529,195.43
• High:  $1,876,226.09
• Low:  $219,599.16
• Total That Met or Exceeded Average:  46 (45%)

• “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 106 of the 108 Part 1 Franchised Facilities. As such, the average, median, and percentage met or exceeded are calculated using 106 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 106 of the 108 Part 1 Franchised Facilities.

• “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 2022 Calendar Year for the Affiliate-Owned Facilities

• Facility No. 1:  $423,154.29
• Facility No. 2:  $451,542.13
• Facility No. 3:  $191,082.40
• Facility No. 4:  $556,810.81
• Facility No. 5:  $831,561.30
• Facility No. 6:  $409,734.27
• Facility No. 7:  $354,782.41
• Facility No. 8:  $646,177.30
• Facility No. 9:  $560,715.49
• Facility No. 10:  $571,295.59
• Facility No. 11:  $455,217.94
• Average Gross Sales:  $495,643.08
• Median Gross Sales:  $455,217.94
• Number and Percentage Exceeding Average:  5 (46%)
• High Gross Sales:  $831,561.30
• Low Gross Sales:  $191,082.40

Part 3 – Tenant Occupancy Rate as of the End of 2022 and Average and Median Year-End Tenant Occupancy Rate for the Affiliate-Owned Facilities

Facility 1

• Open Date:  9/1/1998
• Number of Suites:  44
• Tenant Occupancy Rate as of the End of 2022:  85%
• 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):  90%

Facility 2

• Open Date:  2/1/2000
• Number of Suites:  37
• Tenant Occupancy Rate as of the End of 2022:  92%
• 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):  83%

Facility 3*

• Open Date:  5/1/2002
• Number of Suites:  56
• Tenant Occupancy Rate as of the End of 2022:  89%
• 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 3 relocated in 2022 and reopened as Facility 12.

Facility 4

• Open Date:  5/1/2004
• Number of Suites:  42
• Tenant Occupancy Rate as of the End of 2022:  98%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  91%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  92%

Facility 5

• Open Date:  6/1/2007
• Number of Suites:  73
• Tenant Occupancy Rate as of the End of 2022:  90%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  95%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  98%

Facility 6

• Open Date:  7/1/2010
• Number of Suites:  31
• Tenant Occupancy Rate as of the End of 2022:  96%
• 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):  88%

Facility 7

• Open Date:  12/1/2012
• Number of Suites:  32
• Tenant Occupancy Rate as of the End of 2022:  90%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  83%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  79%

Facility 8

• Open Date:  3/10/2014
• Number of Suites:  44
• Tenant Occupancy Rate as of the End of 2022:  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):  100%

Facility 9

• Open Date:  12/2/2014
• Number of Suites:  44
• Tenant Occupancy Rate as of the End of 2022:  96%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  82%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  82%

Facility 10

• Open Date:  7/1/2011
• Number of Suites:  40
• Tenant Occupancy Rate as of the End of 2022:  94%
• 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):  94%

Facility 11

• Open Date:  9/1/2021
• Number of Suites:  30
• Tenant Occupancy Rate as of the End of 2022:  78%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  69%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  69%

Facility 12*

• Open Date:  5/25/2022
• Number of Suites:  74
• Tenant Occupancy Rate as of the End of 2022:  60%
• Average Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  60%
• Median Year-End Tenant Occupancy Rate (for the Number of Years It Was Open):  60%

*Facility 3 relocated in 2022 and reopened as Facility 12.

• 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) ⬇️