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Phenix Salon Suites Franchise ProfileHealth & Beauty Franchises > Hair Salons |
What Are the Initial Investment Costs for a Phenix Salon Suites Franchise?
Phenix Salon Suites requires an initial investment ranging from $710,467 to $1,626,956. This includes a franchise fee of $52,500. Additionally, franchisees should be prepared for ongoing costs, including a 6% royalty fee and a 1% marketing fee. To start, franchisees need to have a cash requirement between $710,467 and $1,198,282, as well as a net worth of $500,000 to $1,000,000.
What Is the Revenue Potential for Phenix Salon Suites Franchisees?
Franchisees can expect average annual revenue of approximately $467,819 per unit, with a median revenue of $442,634. The revenue can vary significantly, with the lowest reported annual revenue at $172,495 and the highest reaching $1,062,513. This potential for revenue underscores the opportunity for profitability in the salon suite industry.
What Are the Financial Metrics to Consider with Phenix Salon Suites?
Phenix Salon Suites has a gross profit margin of 71.4%, which indicates a healthy financial performance despite operating expenses being relatively high at 144.6% of revenue. The EBITDA stands at $171,885, representing 36.7% of revenue. Understanding these metrics is crucial for franchisees to evaluate their financial viability and operational efficiency.
How Quickly Can Franchisees Expect to Break Even?
The breakeven time for a Phenix Salon Suites franchise is approximately 12 months, which is relatively quick compared to many other franchise opportunities. Franchisees can anticipate an investment payback period of around 23 months, making this franchise an attractive option for those looking to recover their initial investment in a reasonable timeframe.
Phenix Salon Suites Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Phenix Salon Suites Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 261 | 292 | 322 |
| Net Change YoY | 31 | 30 | |
| Franchised Units | 255 | 285 | 307 |
| Net Change YoY | 30 | 22 | |
| Corporate Units | 6 | 7 | 15 |
| Net Change YoY | 1 | 8 |
Investment Overview
The Phenix Salon Suites franchise requires an initial investment ranging from $710,467 to $1,626,956. This includes a franchise fee of $52,500 and ongoing royalty and marketing fees of 6% and 1%, respectively. Prospective franchisees should be prepared with a minimum cash requirement of $710,467 to $1,198,282 and a net worth between $500,000 and $1,000,000 to ensure they meet the financial prerequisites for ownership.
Revenue Potential
Franchisees can expect average annual revenue of approximately $467,819 per unit, with a median revenue of $442,634. The revenue range is quite broad, with some units achieving as low as $172,495 and others exceeding $1,062,513 annually. This variability highlights the potential for profitability depending on location and management practices.
Breakeven and Payback
The Phenix Salon Suites franchise typically sees a breakeven point within 12 months of operation. Franchisees can expect to recoup their initial investment in about 23 months, making it a relatively attractive option for those looking for a quicker return on investment in the salon suite industry.
Franchise Growth
As of 2022, Phenix Salon Suites has seen steady growth in its franchised units, increasing from 255 units in 2020 to 307 units by 2022. This upward trend indicates a strong market presence and brand acceptance, providing a promising environment for new franchisees looking to enter the salon sector.
Corporate Support
Phenix Salon Suites operates a combination of franchised and corporate-owned units, with 15 corporate locations as of 2022. This structure allows franchisees to benefit from corporate support while also fostering a community of franchise owners who can share best practices and operational insights.
Financial Performance Metrics
The average financial performance metrics for Phenix Salon Suites reveal key insights for potential franchisees. With operating expenses reported at $676,675, and an EBITDA of $171,885, franchisees can assess the financial viability of their investment. Understanding these metrics is crucial for managing operational costs and optimizing profitability within the franchise model.
Frequently Asked Questions
The initial investment for a Phenix Salon Suites franchise ranges from $710,467 to $1,626,956, which includes the franchise fee and other startup costs.