goGLOW: $672K Average Sales vs. $232K-$398K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a goGLOW franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a goGLOW franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned goGLOW 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 goGLOW franchise opportunity

Section V – Presentation and analysis of goGLOW’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 revenue, cost of goods sold, occupancy-related costs, payroll, marketing/advertising, other operating costs and expenses, and net revenue less disclosed operating costs/expenses for the 3 affiliate-owned goGLOW businesses that were open and operating during the 2022 calendar year

• 2022 total number of services completed, total payroll hours, average ticket amount, average services completed per payroll hour, reported tips, average reported tips per payroll hour, total hourly comp, average hourly wage, hourly wage, average commission per hour, average reported tips per hour, average hourly comp, and average payroll cost to owner – hourly for the 3 affiliate-owned goGLOW businesses that were open and operating during the 2022 calendar year

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

Section I – goGLOW Franchise Costs

• goGLOW franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $60,000
• Initial Training Fee:  $5,000
• Costs and Expenses Associated with Initial Training Held at Corporate HQ or Corporate Training Facility:  $500 to $2,500
• Lease – Deposit and Rent Over First 3 Months:  $5,000 to $20,000
• Design and Architect Fees:  $8,000 to $12,000
• Construction Management Assistance:  $0 to $15,000
• Utility Deposit:  $500 to $1,000
• Professional Fees:  $5,000 to $10,000
• Net Leasehold Improvements:  $25,000 to $100,000
• Furniture, Fixtures, Equipment, and Signage:  $45,000 to $55,000
• Business Management System:  $9,500
• Technology Fee – 4 Months:  $3,000
• Digital Marketing and Advertising Requirement – 4 Months:  $4,000
• Grand Opening – Project Management Fee:  $5,000
• Business Licenses and Permits:  $2,050 to $5,500
• Computer System Hardware:  $2,100 to $3,500
• Financing/Leasing Amounts Due in Connection with Initial Equipment Package:  $6,000 to $9,000
• Initial Inventory Package (pre-opening):  $22,500
• Other Office Supplies:  $500 to $1,000
• Initial Marketing Spend:  $15,000 to $30,000
• Insurance – 3 Months:  $400 to $1,000
• Additional Funds – 3 Months:  $8,000 to $24,000
• Total Estimated goGLOW Franchise Costs:  $232,050 to $398,500

Section II – goGLOW’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• goGLOW’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $60,000

• Royalty Fee:  the greater of: (i) 8% of the Net Revenue generated by your Franchised Business over the preceding reporting period; or (ii) the applicable minimum Royalty Fee once you have been open and operating for some time

• Brand Fund Contribution:  currently, 1% of the Net Revenue generated by the Franchised Business over the preceding period

• Digital Marketing Management and Advertising Requirement:  currently, $1,000/month (per Franchised Business)

• Local Advertising Requirement:  you must ensure you expend a minimum amount equal to 2% of the Net Revenue of your Franchised Business per month

• Contribution to Advertising or Marketing Cooperative:  currently not assessed

Section III – Number of Franchised and Company-Owned goGLOW Outlets

Franchised

2020

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

2021

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

2022

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

Company-Owned

2020

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

2021

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

2022

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

Section IV – News Updates on the goGLOW Franchise

• goGLOW Announces Largest Partnership To-Date with AMMA Development Group

• goGLOW Welcomes Power Couple Erin and Chris Kobus as New Franchise Owners in Dallas, TX

• Meet the Probation Officer Turned Beauty Exec Behind goGLOW Sunless Tanning Franchise

• goGLOW Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

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

• In this Item, goGLOW discloses the historical performance of the 3 System Businesses that are owned and operated by the franchisor’s affiliates under the Proprietary Marks, and otherwise in a substantially similar manner to the Franchised Business being offered hereunder (each, an “Affiliate Location”) as of December 31, 2022.

• The relevant measuring period for such performance is from January 1, 2022 through December 31, 2022, of which period of time each of the Affiliate Locations were open and operating (the “Measurement Period”). The franchisor did not exclude any other System Business that was open as of December 31, 2022 from this Item.

• Please note that each of the Affiliate Locations was open and operating for some time as of the commencement of the Measurement Period and, as such, should be considered a more mature operation than that associated with a new Franchised Business.

• The information below was reported to the franchisor by the owner of each Affiliate Location. The franchisor has not audited or otherwise independently verified this information.

• Only the Affiliate Locations disclosed below have sold this much. Your individual results may differ. There is no assurance that you’ll sell or earn as much.

Part 1 – Summary of Net Revenue and Disclosed Operating Costs and Expenses Over 2022 Calendar Year

Average

Revenue

• Service Revenue:  $484,717 (72.0%)
• Product Revenue:  $184,545 (27.4%)
• Total Net Revenue:  $672,838 (100.0%)
• Number of Completed Services:  8,878

Cost of Goods Sold

• Merchant Fees:  $15,851 (2.4%)
• Product COGS:  $69,228 (10.3%)
• Shipping:  $1,999 (0.3%)
• Supplies + Materials – COGS:  $5,997 (0.9%)
• Total COGS:  $93,074 (13.8%)

Occupancy-Related Costs

• Rent:  $80,536 (12.0%)
• Utilities:  $5,956 (0.9%)
• Repairs + Maintenance:  $2,982 (0.4%)
• Liability Insurance:  $2,807 (0.4%)
• Total Occupancy:  $92,282 (13.7%)

Payroll

• Management Wages:  $35,480 (5.3%)
• Hourly Wages:  $46,705 (6.9%)
• Commissions:  $12,276 (1.8%)
• Reimbursement:  $1,687 (0.3%)
• Payroll Taxes:  $21,862 (3.2%)
• Total Payroll:  $118,011 (17.5%)

Marketing/Advertising

• Adjusted Local Advertising (2%):  $13,457 (2.0%)
• Estimated Digital Marketing and Management Costs:  $12,000 (1.8%)
• Estimated Fund Contributions:  $6,728 (1.0%)
• Promotional Marketing:  $25,437 (3.8%)
• Total Marketing/Advertising:  $57,622 (8.6%)

Other Operating Costs and Expenses

• Office Expenses:  $4,346 (0.6%)
• Estimated Royalty Fees:  $56,070 (8.3%)
• Estimated Technology Fees:  $9,000 (1.3%)
• Bank Fees:  $121 (0.0%)
• Workers’ Comp:  $1,030 (0.2%)
• Cyber Insurance:  $815 (0.1%)
• Miscellaneous:  $3,671 (0.5%)
• Total Other Operating Costs/Expenses:  $75,053 (11.2%)

Total of Disclosed Operating Costs and Expenses:  $436,041 (64.8%)

Net Revenue Less Disclosed Operating Costs/Expenses:  $236,797 (35.2%)

• “Net Revenue” means the total revenue generated from the offer and sale of all Approved Services and Approved Products, including all client membership agreements, gift card sales (which are accounted for and realized upon the sale [use/redemption] of such gift card) and other categories specifically identified in the Part 1 Chart.

• “COGS” means the total amounts incurred in connection with that System Business’s operation over the Measurement Period, as reported to goGLOW by the owner of said Business, in connection with Required Items and other products that are used to provide the Approved Services and Approved Products, including all operational and retail (for resale) inventory.

• “Occupancy-Related Costs” means the amount that the System Business expended over the Measurement Period on rent, CAM, and other amounts due under or in connection with the lease for that Business’s approved premises.

• “Payroll” means the total amounts incurred in connection with the following labor-related operating costs over the Measurement Period: (i) payroll salaries, including salaries for managers and directors of the Disclosed Business; (ii) the costs for any temporary employees hired by the Disclosed Business; and (iii) payroll taxes. This term does not include or account for health insurance or benefits that would be afforded to full-time employees under applicable law(s).

• “Marketing/Advertising” means: (i) the actual amounts that the owner of that System Business expended on local promotional activities over the Measurement Period within the geographical region around its Premises; and (ii) the (a) adjusted Local Advertising Requirement (amounting to 2% of Net Revenues derived by that Business), (b) estimated amount that a System franchisee is required to expend on Digital Marketing and Management services (currently, $1,000/month payable to the franchisor’s Approved Supplier), and (c) estimated Fund Contribution(s) (amounting to 2% of Net Revenues), that the Disclosed Business would have been required to expend on such marketing/advertising activities if the Business was governed by the franchisor’s current form of Franchise Agreement (collectively with the estimated Royalty Fees and Technology Fees, the “Estimated Fees”).

• “Other Disclosed Operating Costs and Expenses” means the amount that the owner of that Business reported to the franchisor as incurred or otherwise expended on the following items and/or services over the Measurement Period: (i) office expenses; (ii) the adjusted/estimated Technology Fee that the owner of this Business would have been required to pay to the franchisor under its current form of Franchise Agreement (currently, $750/month); (iii) worker’s compensation insurance; (iv) cyber-security insurance; (v) the estimated Royalty Fee(s) the owner of that affiliate-owned Disclosed Business would have been required to pay to the franchisor over the Measurement Period under the current form of Franchise Agreement (8% of the Net Revenues generated by such Business); (v) miscellaneous operations expenses that the owners of each Disclosed Business (goGLOW’s affiliates) reported to the franchisor.

• Please note that this range does not include or account for actual amounts expended by these Affiliate Locations on software subscriptions and/or other technology-related access/services that are provided to System franchisees as part of their then-current Technology Fee (because the franchisor otherwise estimates, and accounts for, that Tech Fee as set forth above).

• Except as specifically provided above, this range does not intend to account for any other operating costs or expenses incurred in connection with the Business operations over the Measurement Period, such as: (i) owner compensation or draws; (ii) any automobile-related costs/payments; (iii) meals and entertainment; (iv) parking and/or tools; (v) certain depreciation and/or amortization; and/or (vi) any other cost or expense not specifically identified in the chart and/or notes above.

Part 2 – Completed Services, Payroll, and Related Cost Data Reported Amongst Affiliate Location(s) Over the Measurement Period

• Total Number of Services Completed:  8,878
• Total Payroll Hours:  4,979
• Average Ticket Amount:  $75.78
• Average Services Completed per Payroll Hour:  1.78

• Reported Tips:  $91,805
• Average Reported Tips per Payroll Hour:  $18.44

• Total Hourly Comp:  $152,474
• Average Hourly Wage:  $30.62

• Hourly Wage:  $10.00
• Average Commission per Hour:  $2.47
• Average Reported Tips per Hour:  $18.44
• Average Hourly Comp:  $30.90

• Average Payroll Cost to Owner – Hourly:  $12.47

• Part 2 of this Item contains the following information for each Affiliate Location as reported by each of the owners of such locations, over the Measurement Period (2022 calendar year of operations):

• (i) the number of sessions involving Approved Services provided and completed by that Business (the “Total Number of Services Completed”);

• (ii) the total number of labor hours that the affiliate owner paid to Business personnel (“Total Payroll Hours”), including hours paid to a single Designated Manager that performed management services in connection with all 3 Affiliate Location operations (the “Applicable Manager”);

• (iii) the average receipt in connection with each transaction involving the Approved Services, which is calculated by taking the Net Revenue generated from such transactions and dividing that figure by the number of such transactions (the “Average Ticket Amount”);

• (iv) the Total Number of Services Completed divided by the Total Payroll Hours (the “Average Services per Payroll Hour”);

• (v) tips and gratuity that was processed via credit card (and not cash) that was payable to the personnel of the Business and not deemed part of the Net Revenue of that Business (the “Reported Tips”);

• (vi) the total Reported Tips divided by Total Payroll Hours (the “Average Reported Tips per Payroll Hour”);

• (vii) the total wages paid out by the owner of the Business to Business personnel, including 1/3 of the total compensation to the Applicable Manager (the “Total Hourly Wages”);

• (viii) Total Hourly Wages divided by Total Payroll Hours (the “Average Hourly Wage”);

• (ix) the (a) sum of Total Hourly Wages, total Reported Tips, and other reported commissions at that Business, divided by (b) the Total Payroll Hours (“Average Hourly Compensation”); and

• (x) the sum of the Average Hourly Wage plus average hourly commissions generated at that Business (the “Average Payroll Cost to Owner – Hourly”), which does not account for any payroll taxes and/or health or other benefits (or Reported Tips that are paid by customers via credit card and remitted to Business personnel, which may include the Applicable Manager).

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