🍟 6/23/2022 – $200k Down To $900k In Revenue

FRANCHISES OF THE WEEK

1) Sugaring NYC

Fast Facts

Background

  • Founded in 2015, franchising since 2017
  • Based in Florida; 35 locations open at the start of 2022
  • Provides “sugaring hair removal”, a healthier alternative to waxing

Fees + Investment

  • Royalty: 5%
  • Brand Fund: 1%
  • Franchise Fee: $29,900
  • Initial Investment: $118,650 – $200,600

Financial Performance

  • The below tables disclose the gross sales in 2021 for:
    • 6 affiliate locations
    • 10 franchised locations

The Wolf’s Take 🍟

Sugaring is an emerging concept showing an investment level of $200,000 with the potential to return revenue almost 5x that!

Assuming even modest margins, this business likely has very healthy EBITDA for owners.

Beyond the numbers, you may be wondering – wtf is “sugaring”?!?

Have no fear, The Wolf has done a deep dive into the world of waxing for you:

Waxing vs Sugaring

Waxing

  • Must be heated and can burn/scar your skin
  • Made with resins and potentially toxic chemicals
  • Can cause skin irritation and requires chemicals to help remove it

Sugaring

  • Made of 100% natural ingredients (just water and sugar)
  • Applied to the body at room temperature, thus no burning
  • Can be easily removed with water so it doesn’t irritate the skin

Sugaring also appears to be a more effective hair removal process as well, as it removes more hair and doesn’t lead to ingrown hairs like waxing can.

Overall, it’s just as effective as waxing (if not better), and it’s a more pleasant user-experience and arguably a healthier one too.

My main question would be this: can every salon that offers waxing pivot quickly to sugaring? Or is there some sort of defensibility to the service?

If you’re interested in this franchise, you can ask them that via the link to their franchise website below!

Resources


2) Hommati

Fast Facts

Background

  • Founded in 2017, franchising since 2018
  • Based in Ohio; 125 locations open at the start of 2022
  • 3D tours, aerial videos, photography, augmented reality, and other services for real estate agents

Fees + Investment

  • Royalty: 5-9% (depending on monthly gross revenues)
  • Brand Fund: None
  • Franchise Fee: $29,900
  • Initial Investment: $61,683 – $77,583

Financial Performance

  • The below table represents financial information based on 25 franchisees that were operating the business on a full-time basis

Note: The “annualized” results are based on the monthly revenue of each franchisee in August of 2021 and extrapolated on a 12 month basis

The Wolf’s Take 🍟

Right off the bat, it’s important to note that these annualized gross revenues and gross profits are based off of 1 month of data (see the explainer above the table).

I’m not sure why Hommati chose to display their financials this way (yet another reason why franchise financials should have a required standard), but nonetheless that’s what we have to work with.

Given the innovative nature of the business, I wanted to highlight this franchise.

Owners of Hommati cater to real estate agents and companies, and offer services such as:

  • Virtual Staging
  • 3D walkthroughs
  • Virtual Reality Tours
  • 3D Interactive Tours
  • Aerial HD Video / Stills
  • Floor Plans With Measurements

Below is an example of their virtual staging services:

That’s pretty realistic imaging, and is definitely a value add for real-estate agents.

Overall, Hommati is a franchise that has low operating costs, and could even be run part-time if wanted.

If you’re interested in this franchise check out their website below!

Resources


THIS WEEK’S GUEST ON FRANCHISE EMPIRES

Erik Van Horn

Erik is a former multi-unit franchisee of brands like Sola Salon, Yoga Six, and Liberty Tax.

He eventually sold his franchises to private equity, and now only works 15-20 hours a week on things he enjoys doing. 

The rest of his time? He spends outdoors and/or with his family. Click here if you want to hear his journey!

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