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

Section I – Estimated initial investment (franchise costs) for a My Salon Suite franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a My Salon Suite franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned My Salon Suite outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the My Salon Suite franchise opportunity

Section V – Presentation and analysis of My Salon Suite’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2022 average total occupancy percentage, square footage, number of suites, gross revenue, general operating expense, rent expense, royalties, and EBITDA, by quartile, for the 211 My Salon Suite franchise locations in the United States that had been open and continuously operating for at least 12 full months as of December 31, 2023; is at least 3,000 square feet; submitted all required reports under the Franchise Agreement during 2023; and were not under contract for purchase at any time during 2023

• 2023 average occupancy, by maturity (open 0-6 months, open 7-12 months, open 12+ months), of the 315 My Salon Suite franchise locations and company-owned locations in the United States that were open and operating as of December 31, 2023

• 2022 median total occupancy percentage, square footage, number of suites, gross revenue, general operating expense, rent expense, royalties, and EBITDA, by quartile, for the 211 My Salon Suite franchise locations in the United States that had been open and continuously operating for at least 12 full months as of December 31, 2023; is at least 3,000 square feet; submitted all required reports under the Franchise Agreement during 2023; and were not under contract for purchase at any time during 2023

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

Section I – My Salon Suite Franchise Costs

• Initial Franchise Fee:  $50,000
• Travel and Living Expenses:  $1,000 to $3,000
• Rent or Real Estate:  $1,200 to $45,200
• Improvements/Conversions:  $611,020 to $931,088
• Furniture and Fixtures:  $237,504 to $376,655
• Freight:  $6,537 to $11,013
• Signage:  $2,538 to $14,275
• Miscellaneous Opening Costs:  $5,000 to $9,000
• Operating Supplies:  $10,000
• Advertising/Marketing (3 Months):  $10,000 to $12,000
• Insurance (Annual):  $1,400 to $4,000
• Additional Funds (3 Months):  $30,000 to $50,000
• Design Standards Fee:  $1,500 to $2,500
• Architectural Services Fee:  $10,500 to $39,505
• Project Management Fee:  $5,000
• Licensing and Permitting:  $1,800 to $14,000
• Total Estimated My Salon Suite Franchise Costs:  $984,999 to $1,577,236

Section II – My Salon Suite’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $50,000
• Royalty Fee:  5.5% of Gross Revenues for the first year. Beginning the 13th month after your Franchised Business opens through the end of the term of the Franchise Agreement, you will pay the greater of $1,000 or 5.5% of Gross Revenues.
• Brand Building Fund Contribution:  currently a minimum of $200 per month. My Salon Suite may increase this up to 2% of your monthly Gross Revenues.

Section III – Number of Franchised and Company-Owned My Salon Suite Outlets

Franchised

2021

• Outlets at the Start of the Year:  163
• Outlets at the End of the Year:  190
• Net Change:  +27

2022

• Outlets at the Start of the Year:  190
• Outlets at the End of the Year:  232
• Net Change:  +42

2023

• Outlets at the Start of the Year:  232
• Outlets at the End of the Year:  273
• Net Change:  +41

Company-Owned

2021

• Outlets at the Start of the Year:  30
• Outlets at the End of the Year:  32
• Net Change:  +2

2022

• Outlets at the Start of the Year:  32
• Outlets at the End of the Year:  32
• Net Change:  0

2023

• Outlets at the Start of the Year:  32
• Outlets at the End of the Year:  44
• Net Change:  +12

Section IV – News Updates on the My Salon Suite Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the My Salon Suite Franchise (Item 19, 2024 FDD)

• The figures below represent the median and average occupancy and net profit reported in accordance with the typical monthly royalty and occupancy reporting procedure for 2023 by My Salon Suite franchise locations that satisfied the Reporting Criteria.

• The following chart includes information regarding the total number of My Salon Suite franchise locations in the United States that met or exceeded all of the following criteria as of December 31, 2023 (“Reporting Criteria”):

• (a) operated in the United States under a Franchise Agreement;
• (b) had been open and continuously operating for at least 12 full months as of December 31, 2023;
• (c) is at least 3,000 square feet;
• (d) submitted all required reports under the Franchise Agreement during 2023; and
• (e) was not under contract for purchase at any time during 2023.

• As of December 31, 2023, there were 273 My Salon Suite franchised locations open and operating in the United States under a Franchise Agreement (“Franchise Group”). Of this total, 211 locations met the Reporting Criteria and represent the reporting group for 2023 (“Reporting Group”).

• The median and average information was prepared from the records and reports, as reported by franchisees of each of the franchise locations satisfying the Reporting Criteria. The franchisor has relied solely on the information reported to it by franchisees. The franchisor does not know of an instance, nor does it have reason to believe, that any franchisee would misstate its information. However, these reports have not been audited and the franchisor has not independently verified these numbers.

• Some My Salon Suite Businesses have earned this amount. Your individual results may differ. There is no assurance you’ll earn as much.

• The following tables provide information regarding the average occupancy, square footage, number of suites, gross revenues, certain expenses, and EBITDA, as defined below. Also shown are the percentage of locations that meet or exceed the average for each category.

• The expense figures were extracted from the 2023 financial statements submitted by the My Salon Suite Franchisees included in the 2023 Financial Benchmark Survey.

Part 1 – Top Quartile by Revenue (52 Locations)

• The following is the average P&L for the Top 25% My Salon Suite Franchised Businesses of the 211 reporting My Salon Suit Franchised Businesses based on profitability.

Average

• % of Total Occupancy:  93.8%
• Square Footage:  7,225
• Number of Suites:  37.5
• Gross Revenue:  $654,538 (100.0%)
• General Operating Expense:  $101,399 (15.5%)
• Rent Expense:  $192,382 (29.4%)
• Royalties:  $36,042 (5.5%)
• EBITDA:  $324,715 (49.6%)

Part 2 – Second Highest Quartile by Revenue (53 Locations)

• The following is the average P&L for the Second 25% My Salon Suite Franchised Businesses of the 211 reporting My Salon Suit Franchised Businesses based on profitability.

Average

• % of Total Occupancy:  92.6%
• Square Footage:  5,853
• Number of Suites:  30.2
• Gross Revenue:  $463,472 (100.0%)
• General Operating Expense:  $87,041 (18.8%)
• Rent Expense:  $146,766 (31.7%)
• Royalties:  $25,491 (5.5%)
• EBITDA:  $204,173 (44.1%)

Part 3 – Third Highest Quartile by Revenue (54 Locations)

• The following is the average P&L for the Third 25% My Salon Suite Franchised Businesses of the 211 reporting My Salon Suit Franchised Businesses based on profitability.

Average

• % of Total Occupancy:  91.3%
• Square Footage:  5,158
• Number of Suites:  27.0
• Gross Revenue:  $384,633 (100.0%)
• General Operating Expense:  $73,339 (19.1%)
• Rent Expense:  $119,518 (31.1%)
• Royalties:  $21,155 (5.5%)
• EBITDA:  $170,621 (44.4%)

Part 4 – Bottom Quartile by Revenue (52 Locations)

• The following is the average P&L for the Bottom 25% My Salon Suite Franchised Businesses of the 211 reporting My Salon Suit Franchised Businesses based on profitability.

Average

• % of Total Occupancy:  80.6%
• Square Footage:  4,962
• Number of Suites:  25.4
• Gross Revenue:  $270,918 (100.0%)
• General Operating Expense:  $69,988 (25.8%)
• Rent Expense:  $103,239 (38.1%)
• Royalties:  $14,942 (5.5%)
• EBITDA:  $82,749 (30.5%)

• Occupancy is calculated by dividing the number of suites occupied by the total number of available suites. Occupancy shown is based on reported occupancy as of December 31, 2023.

• Square Feet is the square footage of the Franchised Business.

• Gross Revenues means the total selling price of all services and products sold and accrued at, from, or through the Franchised Business, whether or not sold or performed at or from the Franchised Business, and all income and revenue of every other kind and nature related to the Franchised Business operation, whether for cash, check, debit, credit, barter, exchange, trade credit, items of financial or non-financial benefit to franchisee, or other credit transactions, and
  regardless of collection in the case of credit.

• Gross Revenues does not include the amount of any applicable sales tax imposed by any federal, state, municipal, or other governmental authority if such taxes are stated separately when the customer is charged, and the franchisee pays such amounts as and when due to the appropriate taxing authority.

• Also excluded from Gross Revenues are the amount of any documented refunds, chargebacks, credits, and allowances given to customers in good faith pursuant to the franchisor’s standard procedures for issuing such refunds. All barter and exchange transactions for which the franchisee furnishes services or products in exchange for goods or services to be provided to the franchisee by a vendor or customer will be valued at the full retail value of the goods or services provided to franchisee.

• General Operating Expenses include professional fees, repair and maintenance, insurance, permit and fees, telephone, water and sewer, garbage, electricity, gas, internet, office expenses, advertising and marketing, technology fee, and security system. You may incur other expenses not included in this definition. General operating expenses are cash expenses only. General operating expenses do not include non-cash expenses, such as amortizing equipment.

• Rent Expense includes the base rent plus NNN or CAM expenses being paid to the landlord.

• EBITDA is defined as Earnings Before Interest, Taxes, Depreciation, and Amortization. It is calculated by subtracting the General Operating Expense, Rent Expense, and Royalties from Gross Revenues. The EBITDA number excludes any debt service and interest payments.

• Percentage (%) that met or exceeded the average is calculated by dividing the number of locations that met or exceeded the average for each category by the total number of locations for that category.

Part 5 – Average Occupancy

• Part 5 shows the average occupancy for December 2023 by maturity, of the Franchise Group, and company-owned locations that were open and operating as of December 31, 2023.

Open 0-6 Months

• Average Occupancy of Franchised Businesses:  48.0%
• Number of Units:  26

• Average Occupancy of Company-Owned Locations:  88.2%
• Number of Units:  13

• Total Average Occupancy:  61.43%
• Number of Units:  39

Open 7-12 Months

• Average Occupancy of Franchised Businesses:  84.7%
• Number of Units:  17

• Average Occupancy of Company-Owned Locations:  0.0%
• Number of Units:  0

• Total Average Occupancy:  84.7%
• Number of Units:  17

Open 12+ Months

• Average Occupancy of Franchised Businesses:  89.1%
• Number of Units:  228

• Average Occupancy of Company-Owned Locations:  91.4%
• Number of Units:  31

• Total Average Occupancy:  89.4%
• Number of Units:  259

Part 3 – Median Performance of the Reporting Group

• Part 6 shows the median performance of stores within the Reporting Group open and operating as of December 31, 2023.

• Number of Locations:  211
• Median Occupancy Percentage:  94.1%
• Median Square Feet:  5,500
• Median Number of Suites:  29
• Median Gross Revenues:  $422,747 (100.0%)
• Median General Operating Expense:  $78,572 (18.6%)
• Median Rent Expense:  $133,314 (31.5%)
• Median Royalties:  $23,251 (5.5%)
• Median Net Profit:  $186,306 (44.1%)

• My Salon Suite is unable to verify the accuracy of the expense information provided by My Salon Suite franchisees and makes no representations or warranties regarding the same.

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