🍟 11/8/2021 – Diesel Barbershop
Cannabis Consumption Lounge Plans National Expansion
Bud’s Place, a startup franchisor of social cannabis consumption lounges, has partnered with a company called Status Group International to accelerate Bud’s growth.
Bud’s Place offers a safe & clean place to smoke and enjoy yourself, and has food and entertainment the same way a bar does for consumers of alcohol.
This story signals a trend that is in early innings but I expect to be major winners in over the next decade: cannabis businesses. Recreational marijuana use is steadily gaining legality across the country, and as it does, franchises like Bud’s place will only see increased demand.
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- Founded in 2011, franchising since 2017
- Based in San Antonio, Texas; 30 units open as of 2021
- A full service barbershop that gives you the classic garage feel for hair and beard needs
Fees + Investment
- Royalty: 7.5% of gross revenue
- Brand Fund: 1% of gross revenue
- Franchise Fee: $40,000
- Initial Investment: $336,500 – $413,500
- The following data is from a table that illustrates historical data from 5-6 affiliate locations. I have snipped the table to show the average total revenue and average net profit for each locations 1st-4th year of operations
The Wolf’s Take 🍟
Diesel shows healthy growth in revenue and profits from year 1 through year 4 for a handful of their affiliate locations. Their oldest store which has been open 8 years as of 2020, shows the highest revenue by a margin of $250k.
Barbershops – outside of a global pandemic – are typically very dependable businesses. Diesel looks to be a more unique brand with its vintage theme, especially when compared to the generic Supercuts/ Sports Clips/Great Clips franchises.
It’s early on in their growth with 30+ units open so if the haircare industry is of interest this is a good brand to look into!
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