Startup Costs
| Type of Expenditure (Note 1) | Amount: Low to High Range | Method of Payment | When Due | Payable To |
| Initial Franchise Fee (Note 2) | $32,500 to $42,500 | Lump sum | Upon signing franchise agreement | Us |
| Travel and Living Expenses While Training (Note 3) | $5,000 to $6,100 | As incurred | As incurred during training | Airlines, hotels restaurants |
| Real Estate & Leasehold Improvements (Note 4) | $11,400 to $180,746 | Varied times | Before Opening | Landlord & building contractor |
| Architect/Design Fees (Note 5) | $5,000 to $8,000 | As specified in contract | At time of design | Architect |
| Furniture, Fixtures, and Equipment (Notes 6 & 7) | $31,421 to $42,264 | As agreed | Varied times | Us or vendors |
| Office Supplies (Note 8) | $3,800 | As agreed | Varied times | Us or vendors |
| Technology Expenses & Licenses (Note 9) | $6,518 to $21,003 | Lump sum | Before opening | Us or vendors |
| Signage (Note 10) | $14,090 to $15,182 | Lump sum | Before opening | Us or vendors |
| Initial Inventory (Note 11) | $13,963 | As agreed | At delivery | Us or vendors |
| Grand Opening Advertising (Note 12) | $25,000 | Lump sum | Before opening | Us or vendors |
| Insurance | $2,450 to $2,650 | As incurred | Varied times | Third parties |
| Miscellaneous Expenses (Note 13) | $7,108 | As agreed | Varied times | Vendors |
| Additional Funds for Working Capital for First 3 Months (Note 14) | $55,251 | As incurred | As incurred | Vendors or third parties |
| Total Ranges (Note 15) | $213,501 to $423,567 |
Notes:
(1)The high and low ranges in the table are based on a 6 treatment room Waxing Studio. Our estimates assume you will build out your studio space for 6 rooms and that you initially order equipment, furniture and supplies for 6 treatment rooms. These fees are non-refundable unless otherwise noted.
(2)The Initial Franchise Fee is described in Item 5. If you sign an Area Development Agreement, you must commit to opening more than one Waxing Studio, and you will pay the Development Fee at the time you sign the Area Development Agreement. The Development Fee will be credited to the Initial Franchise Fee due under each Franchise Agreement you or your affiliate signs for each Waxing Studio developed under the Area Development Agreement. The Development Fee is described in Item 5.
(3)The person you designate as the “Principal Operator” of your Waxing Studio must attend mandatory training at a location(s) we designate. We also may require the Principal Operator and/or a Principal Owner to spend up to 5 days training in an existing Waxing Studio owned by us or an existing franchisee. If your Principal Operator is not also a Principal Owner, then this individual must attend the training, and must sign a confidentiality and non-disclosure agreement that meets our requirements and you must provide a copy to us before they attend training. In addition, if your Principal Operator is not also a Principal Owner, then a Principal Owner must also attend and complete this training to our satisfaction before you open your Waxing Studio.While we do not currently charge for this training, you must pay all travel and living expenses for your attendees. The estimates are the estimated costs for 1 person to attend the Initial Training Program at our corporate offices in Woodbury, MN for 5 days. As of the date of this Disclosure Document, we only require you to attend the Initial Training Program for 5 days. We may increase this requirement to 10 days or decrease this attendance requirement in the event we provide all or part of the training in an online, webinar, or other virtual format. We will also conduct Initial Cerology Training for each of your aestheticians at our offices or, at our discretion, another location that we designate, before you open for business. There currently is no fee for this training, however, you must pay all travel and living expenses for your attendees. During the first 12 months after your Waxing Studio opens, we will also train additional people at no additional cost. After that time, you must pay our then-current fee, currently $250 per person, or $500 - $1,000 per day, plus travel and lodging expenses, per trainer if Initial Cerology Training is offered at any location other than our corporate offices. Our estimate assumes 3 people attend Initial Cerology Training at our corporate office within the first 12 months of operation. Your costs may differ if your aestheticians attend Initial Cerology Training at a location other than our corporate office.
(4)Our estimate for initial expenses for real estate and improvements assumes you will lease space for your Waxing Studio. Waxing Studios are generally located in commercial retail areas. The typical size of a Waxing Studio is approximately 1,800 square feet. The cost for build-out is approximately $115 per square foot, which, at a minimum, includes rooms that will work as waxing treatment rooms, concrete floors, demised exterior walls, HVAC, roof, and utilities stubbed to the premises sufficient for a Waxing Studio. Our estimates are based on these assumptions, as well as an assumption that you will receive an approximate $25.36 per square foot tenant improvement allowance from your landlord. Rent for these locations will typically vary from per square foot per year, not including CAM or tax expenses. Our estimate assumes you must only pay first month rent and an additional month as a security deposit. As described in Item 8, we offer a “Construction Management Services” program through our approved vendor to oversee the construction of your Waxing Studio. We do not currently require you to participate in the Construction Management Services program, however we may transition this to a mandatory program. If this occurs, you will be required to purchase Construction Management Services if you have not already signed a Franchise Agreement with us or have not commenced the construction of your Waxing Studio. As of the issuance date of this Disclosure Document, we anticipate that the cost of the Construction Management Services will be $5,000 to $8,000. The amount of your leasehold improvements will likely vary substantially based on existing conditions, size, design, including the availability and prices of labor and materials. The amounts do not include the costs of any necessary site development or site engineering work, nor do they include capitalized costs of rent or other occupancy costs, over either the life of the lease or the life of your investment. In addition, these amounts do not reflect costs for the purchase of unimproved land and construction of a free-standing Waxing Studio, which also would result in a significantly greater initial investment. You should carefully investigate all of these costs in the area where you wish to establish your Waxing Studio. In addition, we assumed the general contractor will include permitting fees in the construction costs. If you are receiving a tenant improvement allowance from your landlord, the landlord may require you to show them that you paid for the leasehold improvements before giving you the money. In the exercise of our sole discretion, we may provide a short term loan to qualified franchisees for tenant improvements, so that you can pay for those improvements, pending receipt of money from your landlord. The maximum amount we will finance for any franchisee is $150,000. We require you to pay us a 6% origination fee, but we do not charge interest on the loan, unless it is in default. The loan must be repaid at the earlier of (i) when the landlord pays the tenant improvement money, (ii) 90 days after the last cash distribution is made to you under the loan documents, or (iii) 30 days after you open your Waxing Studio. See Item 10 for additional details.
(5)You will be required to retain an architectural vendor to create a complete set of detailed Construction Documents. See Item 5. We will provide one Compliance Drawing for you at no charge, but you will be required to pay us $250 for each additional Compliance Drawing as needed. You will also be required to pay a fee of $2,700 if you do not use our designated architectural vendor to create the Construction Documents. We do not construct, remodel or decorate your premises. The estimates assumes standard tenant improvements within a structure, designed for commercial use, and excludes items such as structural modifications, site work, energy studies, surveys and/or exterior improvements.
(6)We estimate the total cost to purchase furniture, fixtures and equipment for the reception area, common areas, 6 waxing treatment rooms and the employee break room to approximately $43,000. The Retail Product Package and waxing supplies components of the Studio Design Package will be purchased from us, and the rest may be purchased from third party vendors. If you choose to use a vendor to supply the millwork and fixtures for your Waxing Studio, you must pay us a fee of $2,700 to review the fabrication drawings of the vendor.
(7)Before beginning operations, you must purchase equipment and supplies as described in the Operations Manual, including intake forms, postcards, membership brochures, posters, and shopping bags. This estimate also includes additional marketing materials, like branded promotional products, printed materials, large format indoor or outdoor signage for tradeshows, and similar items, which you may purchase through our marketing portal. You may purchase initial supplies from us (see Item 5) or from a third party vendor.
(8)This estimate assumes you purchase the basic technology package offered by ProVision, and the remaining items are purchased from third party vendors.
(9)The total cost for the signage varies depending on the size of the signs, quantity, whether the signs are illuminated, and the requirements of the landlord and governing authority. If you choose to use a vendor other than our designated vendor, you must pay us a fee of $1,900 to review the signage fabrication drawings.
(10)Your initial inventory of body waxing and service offering supplies and retail products will include branded products for retail sale, wax, applicators, gloves, linens and other supplies and products as described in the Operations Manual. We have the right to change the inventory requirements at any time.
(11)The estimate also includes the $25,000 we require you spend to advertise your Waxing Studio for the Grand Opening and Ramp Up Plan described in Item 11. You may spend more than this amount. Factors that may affect the actual amount you spend include the type of media used, the location of your Waxing Studio, the size of the area you are advertising to, local media cost, and the time of year.
(12)This amount includes utility costs, licensing fees, criminal background checks on all your initial employees, and professional expenses such as legal and accounting.
(13) This amount includes estimated operating expenses you should expect to incur during the first 3 months of operations, not including any revenue generated by your Waxing Studio. These figures do not include any taxes or other permitting or licensing fees that you may pay. The estimate assumes you pay no rent the first month and that you pay rent in the second and third month for a studio with approximately 1,800 square feet.
(14)These figures are estimates only. We have relied on our experience in operating company-owned Waxing Studios in the Minneapolis-St. Paul metropolitan area, and the experience of the franchised locations in various states during 2017, 2018 and 2019 to compile these estimates. This is only an estimate of your initial investment and is based on our estimate of nationwide costs and market conditions prevailing as of the date of this Disclosure Document. It is possible to significantly exceed costs in any of the areas above. You must bear any deviation or escalation in costs from the estimates that we have given. You should review these figures carefully with a business and a legal advisor before making any decision to purchase a franchise. Many factors that are unique to your location can make a dramatic difference in the estimates provided. Except as specifically stated, we do not offer financing for any part of the initial investment. The availability and terms of financing will depend on factors like the availability of financing generally, your credit worthiness, your relationship with local banks, your experience in the waxing industry, and any additional collateral you may offer to a lender to secure the loan. Our estimates do not include any finance charges or fees, interest or debt service obligations.