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

Section I – Estimated initial investment (franchise costs) for an IMAGE Studios franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for an IMAGE Studios franchise, based on Items 5 and 6 of the company’s 2024 FDD

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

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

• 2023 average revenue, key operating expenses (accounting, advertising, cleaning supplies, insurance, janitorial, legal, office supplies, rent and NNN/CAMS expense, repairs and maintenance, utilities), royalty expense (royalty expense, brand development fund expense), and estimated earnings after expenses for the 30 franchisee-owned IMAGE Studios salon suites businesses that were in operation from January 1 through December 31, 2023 and who met IMAGE Studios’ reporting requirements

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

Section I – IMAGE Studios Franchise Costs

• Initial Franchise Fee:  $64,500
• Business Formation:  $1,000 to $3,000
• Lease Costs and Rent/Real Estate – First Month’s Rent & Security Deposit:  $20,000 to $65,000
• Initial Floor Plan Layout:  $500 to $1,000
• Construction Project Management Fee:  $25,000
• Utility Deposits:  $0 to $3,500
• Architectural Plans and Engineering:  $15,000 to $47,000
• Licensing and Permits:  $3,500 to $34,500
• Leasehold Improvements:  $725,000 to $2,100,000
• Furniture, Fixtures, and Equipment:  $155,000 to $349,000
• Initial Training Expenses:  $0 to $2,500
• Computer Equipment:  $1,500 to $3,000
• Insurance (annual basis):  $1,500 to $5,500
• Additional Funds for 3 Months:  $35,000 to $75,000
• Miscellaneous Opening Costs and Grand Opening:  $1,500 to $5,000
• Advertising and Marketing for First 3 Months:  $6,000 to $18,000
• Operating Supplies:  $1,000 to $2,500
• Total Estimated IMAGE Studios Franchise Costs:  $1,056,000 to $2,804,000

Section II – IMAGE Studios’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Franchise Fee:  $64,500
• Royalty:  5.5% of gross revenue, or $300 per week minimum, whichever is greater
• Brand Development Fund:  2% of gross revenue, or $110 per week minimum, whichever is greater
• Local Marketing Requirement:  $2,000 each month minimum, until you reach greater than 70% occupancy. The minimum will reduce to $400 per month after you reach greater than 70% occupancy.

Section III – Number of Franchised and Company-Owned IMAGE Studios Outlets

Franchised

2021

• Outlets at the Start of the Year:  23
• Outlets at the End of the Year:  24
• Net Change:  +1

2022

• Outlets at the Start of the Year:  24
• Outlets at the End of the Year:  37
• Net Change:  +13

2023

• Outlets at the Start of the Year:  37
• Outlets at the End of the Year:  68
• Net Change:  +31

Company-Owned

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  1
• Net Change:  +1

2022

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2023

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section IV – News Updates on the IMAGE Studios Franchise

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

• The financial performance representation shown in the table below contains the historical data for the 2023 calendar year for certain franchisee-owned IMAGE Studios Salons who met IMAGE Studios’ reporting requirements by submitting monthly financial reports for the entire 2023 calendar year.

• The table shows average information for total revenue and estimated earnings after key operating expenses and royalty expenses during the reporting period for the 30 franchisee-owned IMAGE Studios Salons that were in operation from January 1 through December 31, 2023 and who met IMAGE Studios’ reporting requirements. These outlets had at least 12 months or more of operations.

• These IMAGE Studios Salons are located in urban or suburban areas.

• There was one company-owned outlet that opened in 2022 whose financial data is not included in the financial performance representations.

• The following table and financial performance data are Image Studios’ only authorized statements regarding financial results relating to IMAGE Studios Salons. The data comes from actual historical financial performance information reported to Image Studios by its franchisees. Note that these figures have not been audited or prepared in accordance with generally accepted accounting standards and do not meet professional or other standards for complete financial statements.

• Some outlets have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.

Total 2023 Revenue and Estimated Earning (Averages)

Total 2023 Revenue:  $397,694 (100.00%)

Key Operating Expenses

• Accounting:  $3,384 (0.85%)
• Advertising:  $7,573 (1.90%)
• Cleaning Supplies:  $1,312 (0.33%)
• Insurance:  $3,574 (0.90%)
• Janitorial:  $9,624 (2.42%)
• Legal:  $1,051 (0.26%)
• Office Supplies:  $2,891 (0.73%)
• Rent and NNN/CAMS Expense:  $153,471 (38.59%)
• Repairs and Maintenance:  $8,134 (2.05%)
• Utilities:  $20,880 (5.25%)
• Total Key Operating Expenses:  $211,897 (53.28%)

Estimated Earnings Before Royalties:  $185,797 (46.72%)

Royalty Expense

• Royalty Expense (5.5%):  $21,873 (5.50%)
• Brand Development Fund Expense (2.0%):  $7,954 (2.00%)
• Total Royalty Expense:  $29,827 (7.50%)

2023 Estimated Earnings After Key Expenses:  $155,970 (39.22%)

• There were 30 IMAGE Studios Salons that were open for the entire January 1 to December 31, 2023 reporting period and who met IMAGE Studios’ reporting requirements. 7 outlets were excluded because they did not report sufficient data and 31 outlets were excluded because they opened after January 1, 2023 or left the system during the reporting period.

• “Total Revenue” consists of all receipts derived by a salon from gross rental receipts and other revenue, whether the receipts are evidenced by cash, credit, checks, services, property, or other means of exchange.

• “Key Operating Expenses” include the primary and material expenses that IMAGE Studios Salons incur in the operation of their franchised business. Key Operating Expenses is not necessarily all expenses and you will likely have other expenses that are excluded from Key Operating Expenses including common business deductions and expenses such as personal travel expenses through the business, personal automobile expenses, home office lease and expenses.

• “Royalty Expense” is the 5.5% Royalty Fee and 2.0% Brand Development Fee that you will be required to pay to IMAGE Studios according to your Franchise Agreement.

• “Estimated Earnings After Key Expenses” is calculated by subtracting the Total Key Operating Expenses and the Total Royalty Expense from Total Revenue.

• The current Royalty amount is 5.5% and the current amount for the Brand Development Fund is up to 2%.

• IMAGE Studios has imputed the 5.5% Royalties and 2% Brand Development Fund contributions for all salons in the table, though some of these franchised salons did not actually pay this amount. You will be expected to pay the Royalties and Brand Development Fund contributions required in your Franchise Agreement.

• IMAGE Studios allowed some franchisees whose data was used to create this table to spend less than the minimum local marketing expenditures. You will be expected to meet your local marketing requirements.

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