Tài liệu Case Study FYB Regal Nails Salon Spa là một tài liệu nghiên cứu đầy thú vị, tập trung vào việc phân tích và trình bày chi tiết về hành trình xây dựng và phát triển thương hiệu làm đẹp và spa chất lượng cao FYB Regal Nails Salon Spa. Tài liệu này cung cấp một cái nhìn sâu rộng về cách thương hiệu đã nắm bắt tâm hồn và nhu cầu của khách hàng để tạo nên sự thành công và tạo dựng danh tiếng.Trong tài liệu này, bạn sẽ tìm thấy câu chuyện hấp dẫn về cách FYB Regal Nails đã bắt đầu từ việc xây dựng một ý tưởng và biến nó thành một thương hiệu làm đẹp và spa đáng tin cậy. Tài liệu này đi sâu vào việc phân tích chiến lược kinh doanh, quản lý chất lượng dịch vụ và cách thương hiệu đã tạo ra sự tương tác tích cực với khách hàng.Không chỉ dừng lại ở mức độ kinh doanh, tài liệu còn trình bày về cách FYB Regal Nails đã xây dựng một môi trường thư giãn, an lành và chất lượng cho khách hàng. Tài liệu phân tích cách họ đã tích hợp sự chăm sóc cá nhân và sự tập trung vào chi tiết để tạo ra một trải nghiệm thực sự tốt cho khách hàng.Tài liệu Case Study FYB Regal Nails Salon Spa không chỉ là một tài liệu học thuật mà còn là một nguồn cảm hứng cho những ai muốn hiểu về cách xây dựng thương hiệu và cung cấp dịch vụ đỉnh cao trong lĩnh vực làm đẹp và spa. Từ việc định hình tầm nhìn cho đến việc quản lý hoạt động hàng ngày, FYB Regal Nails là một ví dụ xuất sắc về cách tạo dựng và duy trì một thương hiệu thành công.
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES
At Regal Nails, Salon & Spa, LLC, referred to as "we," "us," or "our," we are a Nevada-limited liability company established on September 30, 2005, with our principal office located at 5150 Florida Boulevard, Baton Rouge, Louisiana, 70806.
Regal Nails Salon & Spa operates under our registered trademark, offering franchise opportunities since April 1, 2006 As of January 1, 2011, we also assumed the rights and obligations as franchisor for Regal Nails & Spa outlets previously managed by Regal Nails Select, LLC It is important to note that we do not own or operate any nail salons ourselves.
We have never offered franchises outside of the specific business activities described herein and do not engage in any other business operations Our designated agents for service of process in states requiring a franchise registry are listed on Exhibit D, ensuring compliance with state franchise laws.
Regal Nails, LLC, founded in 1996 and headquartered at 5150 Florida Blvd., Baton Rouge, LA 70806, operates as an independent entity with no parent companies From 1997 to 2005, Regal Nails, LLC offered salon franchises under the “Regal Nails” trade name, providing similar services across franchise locations.
In 2006, we assumed Regal Nails, LLC’s rights and obligations under 227 franchise agreements and subleases By March 1, 2008, all Regal Nails franchise agreements and subleases were transferred to us, with no new Regal Nails franchises being offered by either party The existing Regal Nails franchises transferred to us are already operating or will soon operate as Regal Nails Salons, ensuring continued brand presence and franchise continuity.
Regal Nails, LLC specializes in "Spa" salon services and has never offered franchises outside of its core business The company previously operated four company-owned Regal Nails salons in California but has since sold these locations Currently, Regal Nails, LLC has no plans to open any additional salons, focusing instead on its existing operations.
Regal Nails, Canada, ULC is a wholly-owned subsidiary of our company, based at 5150 Florida Blvd., Baton Rouge, Louisiana Established as an Alberta ULC on October 13, 2006, it specializes in selling Regal Nails, Salon & Spa franchise opportunities under the Canadian Trademark Since December 2006, Regal Nails, Canada, ULC has exclusively offered franchises for its Salon & Spa business line, and as of December 31, 2020, it had sold a total of 88 franchises across Canada.
Alfalfa Nail Supply, Inc., a Louisiana corporation established in 1995, is headquartered at 11488 S Choctaw Dr., Baton Rouge, LA 70815 The company specializes in selling a comprehensive range of nail supply products, furniture, and fixtures to nail salons, including both Regal Nails Salon & Spa franchise locations and independent salons It is important to note that Alfalfa does not own, operate, or offer franchise opportunities.
The Franchise, The Market and Competition
Regal Nails Salon & Spa will operate as a full-service nail salon, offering essential services such as manicures and pedicures The availability of these services will adhere to the restrictions outlined in the lease agreement and any other applicable contracts, such as the Exchange Concessionaire Contract (ECC) for military base exchanges Typically, Regal Nails salons are situated within Walmart stores, but they can also be located in other large retail stores and shopping centers, providing convenient access to customers.
With the proper licenses, equipment, and space, franchisees may offer waxing services, provided they are not restricted by the landlord’s policies A select few franchisees, based on your landlord’s approval, may also be granted the privilege to perform eyelash extension services, though this opportunity is limited and not expected to be extended to all franchisees These additional services are supplementary to the core business of operating a full-service Regal Nails Salon & Spa, which primarily focuses on nail services If you are authorized to provide eyelash extension services, you can purchase approved materials and supplies from any supplier, although specific furniture for waxing and lash services may need to be purchased from Alfalfa as required.
If your salon is located within a Wal-Mart or other party-tenant location, our ability to support your franchise depends on maintaining a master lease agreement with the landlord, which we do not control or predict The landlord decides whether to lease specific store spaces, and there is no obligation for us to secure new lease agreements When we do lease a space, it involves a formal lease with the landlord, and your franchise agreement's Sublease Schedule will govern the terms of our lease to you If the lease is terminated by the landlord for any reason, we reserve the right to terminate your franchise agreement without fault or liability.
Currently, Wal-Mart locations exclusively offer manicure, pedicure, and waxing services, along with related product sales However, we retain the right to franchise or operate "test locations" that may provide additional services like hair care and eyelash extensions within Wal-Mart stores, expanding our service offerings in the future.
This paragraph solely pertains to locations within a Wal-Mart center in the United States Our current master lease agreement with Wal-Mart (the “2009 Wal-Mart
The “Master Lease Agreement” (2009 MLA) is effective from the disclosure date and has no specified end date Typically, initial leases or subleases for Wal-Mart locations last 60 to 66 months, with up to two additional 3-year renewal options contingent upon your compliance and lease renewal approval Renewals require mutual agreement between us and Wal-Mart, and further extensions are at the discretion of both parties Franchisees who remodel their stores as requested may receive longer initial lease terms with renewal options; in rare cases, shorter lease terms are granted if requested by franchisees, though we reserve the right to decline such requests Failure to remodel as required at renewal may result in losing the location, and Wal-Mart may reduce renewal terms to just one year if remodeling conditions are not met Under the 2009 MLA, subleasing, assigning, or transferring premises in California requires Wal-Mart’s prior written consent, emphasizing the need to adhere to lease transfer restrictions.
Under the 2009 MLA, performance covenants must be met; failure to do so at a specific location grants Wal-Mart the right to terminate the lease for that location If the lease or the 2009 MLA for your salon premises ends for any reason, including declining to relocate within Wal-Mart, your Franchise Agreement will also terminate, and Wal-Mart bears no liability to you It is important to understand that Wal-Mart is not a party to your Franchise or any agreement with you and has no obligations toward you; however, your Sublease Schedule within the Franchise Agreement requires you to operate the salon as if you were the primary tenant under the 2009 MLA For detailed information regarding the termination of your Regal Nails Salon & Spa franchise rights, refer to Items 10, 17, and Exhibit C-1 of the disclosure document.
Our company has entered into master lease agreements with major retailers such as HEB and Meijer, where we are the primary tenants While the landlords in these agreements are not directly involved with our franchisees, our Franchise Agreement's Sublease Schedule requires franchisees to operate salons as if they were the primary tenants under the master lease Most recent master lease agreements have a 60-month term with a 5-year mutual renewal option, though lease durations can vary and may be shorter The sublease terms typically mirror the duration of the master lease, ensuring consistency Unlike Wal-Mart locations, which are often inside the store, salons leased at other big box retailers are frequently situated outside the retail store itself.
BUSINESS EXPERIENCE
Mr Ton has been our CEO and Manager since our founding in September 2005, providing leadership and strategic direction As a co-founder of Regal Nails, LLC in Baton Rouge, Louisiana, he has held the position of General Manager since 1995, demonstrating extensive experience in the nail salon industry He has also been the General Manager of Regal Nails Select, LLC since 2008, further expanding his management expertise Additionally, Mr Ton is the President and founder of Alfalfa, an affiliate established in 1997, and has served as a Manager of Beautiful Regal, LLC since 2012, highlighting his ongoing commitment to growing successful businesses in the beauty industry.
Chief Financial Officer - David Anderson
Mr Anderson has been our CFO since September, 2005 He has been the CFO of Regal Nails, LLC in Baton Rouge, Louisiana since July 2003
Chief Operating Officer- Loan Nguyen
Ms Nguyen has been our Chief Operating Officer since October 2007, bringing extensive leadership experience to our company She has also held the same position at Regal Nails since October 2007, demonstrating her expertise in operations management Throughout this period, Ms Nguyen has been based in Baton Rouge, Louisiana, where she has contributed significantly to the company's growth and success.
Manager and President- Human Resources, Inspection and Set-Up - David Nguyen
Mr Nguyen has been serving as the President of Human Resources, Inspection, and Set-Up since June 2010, demonstrating his longstanding leadership within the company He has managed the Human Resources department since April 2009, the Inspection department since October 2007, and the Set-Up department since September 2005, showcasing his extensive experience across key sectors Since the company's inception in 1995, Mr Nguyen has overseen the set-up operations for Regal Nails, LLC, emphasizing his vital role in establishing the company's foundation Additionally, on November 29, 2011, he was appointed as a Manager of Regal Nails, Salon & Spa, LLC, further solidifying his leadership position within the organization.
Chief Accounting Officer- Suan Le
Ms Le has served as our Chief Operating Officer since February, 2020 Ms Le was previously employed by Regal Nails, Salon & Spa, LLC in its accounting department since January, 2007.
LITIGATION
Regal Nails, Salon & Spa, LLC v Kinh Nguyen Filed November 2, 2020 in the District Court of the Southern District of Florida, Palm Beach Division, State of Florida Case # 9:20-82006-CIV-AMC
Regal Nails, Salon & Spa, LLC v Hoang Minh T Ha Filed November 2, 2020 in the District Court of the Southern District of Florida, Fort Pierce Division, State of Florida, Case # 2:20-CV-14388-JEM
Regal Nails, Salon & Spa, LLC v Nancy Nguyen Filed November 6, 2020 in the District Court of 101 st Judicial District Court, Dallas County, State of Texas, Case# DC-2016626
Regal Nails, Salon & Spa, LLC v Thu Anh Vu Filed December 4, 2020 in the County Court of Smith County, State of Texas, Case# 72470
In the case of Commonwealth of Virginia, ex Rel State Corporation Commission v Regal Nails, LLC and Quy T Ton (Case No SEC-2007-00043), Regal Nails and Mr Ton settled with the Virginia Division of Securities and Retail Franchising without admitting or denying any violations They agreed to comply with the Virginia Retail Franchising Act in the future, pay a $20,000 penalty, and cover $1,000 in investigation costs.
Other than this one action, no litigation is required to be disclosed in this Item.
BANKRUPTCY
There is no bankruptcy which must be disclosed in this Item.
INITIAL FEES
To begin the franchise application process, you must submit an application along with a non-refundable fee of $125.00, which covers background checks including credit and criminal record screenings to determine your qualification as a franchisee The initial franchise fee is $25,000, applicable regardless of your salon's size or location If we are involved as a party to your lease, a $45,000 Confirmation Fee must be paid within ten days after site approval; otherwise, the fee is due within 60 days of signing the Franchise Agreement or upon site confirmation by us, whichever occurs first.
The prices listed are applicable to salons scheduled for franchise delivery and Grand Openings in 2019, excluding applicable taxes for which you are responsible The Snow White Package is designed for locations with a white box space and includes a fully equipped, custom-built nail salon with furniture, fixtures, signage, equipment such as an autoclave, start-up supplies, initial inventory, and Regal Nails Salon & Spa décor, based on a 400 sq ft space Costs may decrease if furniture, fixtures, décor, equipment, or initial inventory are reduced by agreement Notably, Snow White Package prices for Wal-Mart locations tend to be lower than those in other shopping centers or standalone salons due to generally less extensive construction requirements.
Prices for Salons with Grand Openings in 2019 UNITED STATES (US) and Puerto Rico (PR) Square Feet 0-450 451-600 601-799 800-999 901-1200
Our franchise cost ranges from $500 to $15,000, depending on various factors The monthly fee covers the franchise fee, base rent, and applicable rental taxes, particularly when we are a party tenant to the lease of the premises These costs are essential for establishing and maintaining your franchise location efficiently.
Up to $30,000 over the prices for the Snow White Package shown above
Up to $20,000 over the prices of Snow White Package shown above
Up to $40,000 over the prices for the Snow White Package shown above
Up to $150,000 over the prices for the Snow White Package shown above
Note 1: In Most Areas (those areas other than “High Cost Areas,” as defined below), the
Snow White Package will cost $150,000 to $250,000 In 2019, the cost for the Wal-Mart Snow White Package in Most Areas was negotiated down to $48,534.98 for one location
"High Cost Areas are regions characterized by elevated wage rates for tradespeople, increased material and shipping charges, and more stringent building and construction codes These areas often incur expensive permits and higher local taxes and fees Additionally, construction projects in these zones may experience delays caused by adverse weather conditions and other unforeseen factors, leading to overall increased project costs."
High Cost Areas include states such as Alaska, Arizona, California, Connecticut, Florida, Hawaii, Massachusetts (within a 65-mile radius of Boston’s City Hall), New Hampshire, New Jersey, Nevada, New York (within an 85-mile radius of New York City’s City Hall), Oregon, Rhode Island, Texas (within a 45-mile radius of Houston or Dallas City Hall), Vermont, Washington, and Puerto Rico Distances are measured in a straight line from City Hall In these areas, the Snow White Package typically costs between $200,000 and $300,000 However, in 2019, the lowest negotiated price for a Wal-Mart Snow White Package in High Cost Areas was approximately $95,000 to $132,500, offering more affordable options within the high-cost regions.
"Existing Locations are open and operating premises, typically custom-built for other retailers, that will be renovated to become Regal Nails Salon & Spa franchises These sites often require extensive renovations, which contributes to the higher cost of the Snow White Package Customers should inquire if a salon site is an Existing Location, as the Snow White Package may be up to $20,000 more expensive than other locations This pricing applies across all locations."
Some franchisees may be eligible for exclusive brand add-ons, including branded polishes supplied initially at a special price by Alfalfa Nail Supply, Inc To access these benefits, franchisees might need to enter into an exclusivity agreement with the polish manufacturer, ensuring they are the sole distributor of that brand in their location Additionally, participating franchisees can receive special products and services from the polish manufacturer, enhancing their nail salon offerings and competitive edge.
Note 5: Certain government authorities may impose additional governmental, municipal, or impact fees for salon construction or business operation in specific jurisdictions These fees are outside our control and vary depending on the location Clients are responsible for paying these fees and any future increases This requirement applies to all locations.
Additional Construction Costs refer to unexpected increases in expenses during construction, which may arise from changes in government regulations, labor demands, scope of work, or supply shortages These costs can also result from client requests for additional features, like extra rooms or plumbing, that are not standard in a typical Regal Nails salon Such increases are beyond our control and vary by project, with clients responsible for paying these costs and any subsequent increases This policy applies to all locations.
B Salons that are delivered after 2021:
1 There is an annual increase of 8% over the price for the Snow White Package shown above for salons that are delivered and open after 2021
If your salon's Grand Opening is delayed by no more than six months due to reasons beyond your control, the original pricing will be maintained, even if the opening extends into the following year.
3 The Monthly Fee in the U.S may be increased by 25%
The rent structure for Wal-Mart locations may shift towards a percentage-based system for salons in the future If adopted, monthly rent will be calculated as a specific percentage of your gross sales each month This new approach is expected to ensure a more aligned and flexible rent model, with monthly payments anticipated not to exceed a predetermined limit.
A minimum monthly rent payment of 20% may apply if the rent is implemented between Wal-Mart and our organization This percentage-based rent could also affect your salon's rental costs, potentially leading to an amendment of the Monthly Fee structure As a result, rent payments and rental tax would be separated from the Monthly Fee to reflect the new rent structure.
The Initial Franchise Fee of $25,000 is fully earned and payable in a lump sum upon signing the Franchise Agreement, regardless of your salon's size or location, and is credited toward the total cost of the Snow White Package Conditions for potential refunds of the Initial Franchise Fee are detailed below When requesting a site with a lease in which we are a party tenant, you must sign and return a Site Deposit Addendum and adhere to its terms Once the landlord confirms the site, you will be notified and required to make the necessary payment.
A $45,000 Confirmation Fee must be paid within ten days if our company is listed as a party tenant to the lease of your premises If we are not a party to the lease, the Confirmation Fee is due within 60 days of signing the Franchise Agreement or upon your confirmation that you have secured a landlord-approved site, whichever occurs first.
If you are a party tenant to the lease for your premises, you may be eligible for a refund of your Initial Franchise Fee if the landlord declines your site request or deems the premises unavailable Specifically, if the landlord rejects your offer or communicates that the site is unavailable, you can request a full refund If you withdraw after requesting a site but before landlord confirmation, you can request a refund minus $15,000.00 Once the landlord confirms your site request, you are required to pay a $45,000 Confirmation Fee within 10 days; failure to pay results in forfeiting your entire Initial Franchise Fee with no refund Additionally, if you have paid both the Initial Franchise Fee and the Confirmation Fee but later communicate your intent to renege or breach the agreement, your franchise may be terminated without liability, and no refund will be issued.
OTHER FEES
Wal-Mart may charge additional fees before opening your salon, including utility reimbursements, key money, lease improvement charges, security deposits, and fire insurance reimbursements; you are responsible for paying these fees through us prior to opening While Wal-Mart currently does not plan to charge for lease improvements or security deposits, it reserves the right to do so in the future The store also intends to insure the premises against fire damage, with estimated costs around $0.10 per square foot annually, though this may vary by area Additionally, Wal-Mart may impose key money fees if extra services are requested on its property, and although not confirmed, it might decide to charge key money for new locations All applicable fees charged by Wal-Mart must be paid through us, and we will forward these payments accordingly.
Salon fees and charges vary depending on the salon, and are generally non-refundable unless we fail to deliver possession of the agreed-upon salon site as specified.
To offer eyelash extension services at Wal-Mart locations, you must purchase specific furniture prior to opening, with non-refundable costs separate from previous fees We recommend the electronic HT Perfect Chair for eyelash extensions, priced at $1,999, or the non-electronic model at $1,699; both must be purchased from Alfalfa Conditions for obtaining the privilege to provide eyelash extensions or waxing are detailed in Item 16, and currently, this privilege is only available to franchisees within our testing group.
Monthly Fee may increase by up to 12% upon renewal
First week of each month, payable in advance for that month
Paid via ACH debits to your account (electronic funds transfers) The authorization form you sign is attached as Part 5 to the Franchise Agreement (See Exhibit A to this disclosure document)
The monthly fee varies based on our tenancy status: if we are not a party tenant to the salon lease, the fee is at the lower end of the range However, if we are a party tenant, the fee is at the higher end and includes the franchise fee, base rent, and rental tax Monthly fees start on the Payment Commencement Date specified in your Franchise Agreement when we are a party tenant to your lease.
Percentage Rent (2) , if we are a party tenant to the lease to the premises
Variable, dependent upon formula by Landlord
January, for the amount due for the preceding calendar year’s gross sales
Via ACH debits to your account for payment by us
Some landlords require tenants to pay a percentage of gross sales exceeding a specified break point, in addition to the base rent If this percentage rent is due, we will collect the amount from you and ensure it is passed on to the landlord.
Currently, the formula is 6.5% of Gross Sales above the natural break point of base rent divided by 0.065
Monthly Utility Charge and/or CAM (2) , if we are a party tenant to the lease to the premises and the lease incudes a utility or CAM charge
Last week of each month, payable in advance for the following month
Via ACH debits to your account for payment by us
CAM, or Common Area Maintenance, includes property insurance and property taxes charged by the landlord, even if these items are separately itemized or separated from CAM charges in the lease agreement.
The CAM may increase based on the actual cost to the landlord
These charges will begin on the Payment Commencement Date identified in your
CGL and PL and limited
Currently $1000 to $8,000 per year Poor rating with the underwriter or locations along the Gulf of Mexico coast may cost as much as the higher end of the range
A $15 to $25 fee is applied per installment if we permit premiums to be paid in installments
Each year, via ACH debits from your account, payments are made to the insurance broker or carrier for coverage, subject to change Underwriters, not us, determine which salons must pay higher premiums and the specific amounts Currently, this insurance coverage is unavailable to Puerto Rico franchisees, but we reserve the right to designate an insurance provider for them By participating, you grant us limited power of attorney to obtain, maintain, and cancel insurance policies on your behalf and to execute all necessary documents.
$50.00 Annually, in addition to the insurance premium, due at the same time
To compensate us for finding, placing, and obtaining CGL and PL and limited Property insurance and for assistance in handling your claims
Fund Contribution (not yet required)
Periodic basis to be established by us, such as monthly, quarterly, semi- annually or annually
We may establish an advertising fund requiring your mandatory contribution Once the contribution amount is set, it will remain unchanged throughout the term of the Franchise Agreement Payments will be made via ACH debits from your account, as detailed in Item 11.
When cooperative formed, initial contribution,
$10; after that, as decided by your cooper- ative, at least
We offer the opportunity to form an advertising cooperative in your area, with a simple initial contribution of $10 paid to us, which is then passed on to the cooperative Ongoing fees will be a minimum of $10 per month, supporting the cooperative's advertising initiatives Company-owned salons are not members of the cooperative and will have no voting rights, as detailed in Item 11.
NSF, stop payment, returned item charges and interest
Interest is 1% per month on amounts owed us
30 days of the date of the invoice
We may also charge you for any bank charges incurred because of your late payments
Subscription Fee Currently, $50 to $100 per month, subject to increase by designated vendor
Monthly This is the monthly subscription fee for our designated cloud-based data storage system required for use in connection with our designated Point of Sale system
Expansion Fee $2,500 Upon signing of expansion agreement plus the estimated costs of expansion
Requests to expand, initiated by you, require a $2,500 fee The costs of the expansion are customarily prepaid The costs of expanding your salon may range from $25,000 to
$40,000 depending upon its size and location
Cost depends upon the condition of your salon
As a tenant seeking renewal of the lease, you may request that the landlord contribute 50% of the estimated costs for remodeling, updating furniture, fixtures, equipment, and décor Upon request, the landlord agrees to pay this contribution, helping to cover the expenses associated with revitalizing the premises before lease renewal.
With signing of the agreement
Occurs when the landlord/prime lessor remodels, expands, moves or converts a store to a super center Also occurs upon your request Costs range from
The value of the salon ranges from $2,000 to $50,000, depending on its condition, size, and location, with higher costs likely in non-Wal-Mart locations If requested by us or the landlord, and if you have not recently remodeled within the last three years, you are required to remodel the salon at your own expense according to our specific plans, specifications, and timeline Failure to comply with these requirements may result in us hiring a contractor to complete the remodel at your expense Additionally, upon our request, you must provide photographs of the fully remodeled salon as proof of completion according to our standards.
The Successor Franchise Fee in effect when a renewal franchise is granted will be
Payable on or before you sign a successor Franchise Agreement
The successor franchise fee is currently set at $500 as of this disclosure date; however, it is subject to change and may be higher at the time of any subsequent franchise grant.
$500 for transfer to a business entity owned by you
Waived in the event of death or disability of the franchisee
Reimbursement for the expenses of a quality assurance inspection if corrective work is not done within 14 days of written report
Assessed if your operation does not meet our standards or requirements, as provided in the COM, which we can change
Expenses may include board, lodging, wages, transportation as well as the actual costs of the corrections, repairs or replacements and the costs of re-inspection
Payment for failure to open on Targeted
$300/day for each additional day salon is not open
Additional charge if your salon is not open on scheduled Grand Opening
(Applicable only to franchisees to open in a new, relocated or expanded Wal-Mart store)
Payment for failure to be operational within 120 days of taking possession (6)
$300/day for each additional day salon is not operating
Additional charge if your salon is not operational within timeframe (Applicable only to franchisees to open in an already operating Wal-Mart store)
Failure to operate business according to
Failure to operate your salon in accordance with the Sublease Schedule of the Franchise Agreement may result in additional charges For instance, providing services not authorized by the landlord can lead to penalties Accumulating more than two violations could ultimately result in eviction from the premises.
Failure to maintain premises as required under Franchise
Failure to maintain the premises as outlined in the Sublease Schedule of the Franchise Agreement will result in additional charges These charges cover repairs and replacements of lighting, plumbing, utilities, and addressing sewer stoppages, ensuring the property remains in proper condition.
Failure to repair premises on vacating the salon premises (6)
Failure to repair the premises in accordance with the Sublease Schedule outlined in the Franchise Agreement upon vacating the salon will result in an additional charge The Security Deposit will be used to cover this amount if applicable.
Failure to maintain required insurance (6)
Cost of insurance + 10% administrative fee and interest
We may obtain required insurance for you if you fail to do so
Currently not expected to exceed $100 per year
ESTIMATED INITIAL INVESTMENT
Package, against which the Initial
Confirmation Fee will be credited (1 and 2)
Initial Franchise Fee due on your signing of the Franchise Agreement
Confirmation Fee due on receipt of landlord’s confirmation of proposed site Snow White Package due in Installments (See Item 5, above)
Premiums determined by underwriter, based on location and experience
Following set up of your salon before opening and annually in February
Estimated to be between $1,000 to $30,000
Based on a Franchise Fee of
Before Opening Us If we are party tenant to lease to premises, this includes the monthly franchise fee, base rent and rental tax
Based on a Franchise Fee of
Paid Monthly First of the month in advance for that month
Us If we are party tenant to lease to premises, this includes the monthly franchise fee, base rent and rental tax
Rent for 3 Months if we are not a
As negotiated between you and your
As negotiated between you and your landlord
IS TO BE MADE party tenant to lease to premises landlord
As negotiated between you and your landlord
As negotiated between you and your landlord
Fee (4) for month of salon opening
Estimated to be from $0 to
Lump Sum Following set up of your salon before opening
If you are a tenant under the lease agreement, utility payments that are included in the amounts due under the lease should be accounted for accordingly Additionally, if the lease requires you to contract directly with your utility company, ensure that these utility costs are clearly specified and managed as part of your lease obligations Properly understanding these terms helps tenants stay compliant with lease conditions and manage utility responsibilities effectively.
To your landlord, if we are not party tenant to the lease, and utility companies if lease calls for you to contract directly with them
Security Deposit (6) Equal to last two months’ Monthly Fee plus any applicable rental taxes and Monthly Utility Charges and/or CAM Estimated to be from $1,000 to
Lump Sum Following set up of your salon before opening
Monthly As arranged between you and
$300 to $1,000 As Arranged Before Opening Insurance Carriers
$200 to $600 As Incurred Before Opening State and local authorities
$0 to $25,000 As Incurred Following set up of your salon before opening
$700 to $3,000 As Incurred Before Opening Transportation
$400 to $800 As Incurred As Incurred Suppliers, utility company, PO box rental Additional
As Incurred As Incurred Employees,
$3,000 to $5,000 Lump Sum Upon Purchase Snow White
Package Sales: Collected by Us Consumer sales/License: State & Local Authorities
Application Fee $125 Lump Sum Upon Submission Us
$50 Lump Sum Paid with insurance premium
Certain estimated costs for opening most salons and first three months of operation of most salons equipped with the Snow White Package Amounts are not refundable, unless otherwise noted
(1) The Snow White Package will cost, for salons in the 50 U.S states and Puerto Rico,
Starting your salon franchise costs typically range from $150,000 to $250,000 in most areas, and $200,000 to $300,000 in high-cost locations The higher figures account for additional expenses, such as up to $30,000 more if opening in an existing location, up to $40,000 for municipal and impact fees, up to $150,000 for extra construction costs, and up to $20,000 if you choose the exclusive brand add-on, if available The initial franchise fee of $25,000 and the confirmation fee of $45,000 are credited toward the cost of the Snow White Package Refund policies for the initial franchise fee and site deposit are detailed in Item 5 of the franchise disclosure document.
Estimated costs for salon setups vary depending on size, ranging from a 400 sq ft salon to a 1,200 sq ft salon Each salon is delivered fully furnished, decorated, and stocked with an initial inventory supply, with all equipment installed and tested by our team We recommend selecting a location with at least 800 sq ft to ensure optimal operations, and we reserve the right to decline approval for sites smaller than 800 sq ft., prioritizing your business success and growth.
Our Franchise Agreement requires you to purchase comprehensive CGL, PL, and limited Property insurance policies through our approved group carrier, ensuring group rates and additional coverage The insurance package includes $4 million in general aggregate coverage, $2 million per occurrence, and coverages for property damage, medical expenses, personal and advertising injury, as well as professional liability with $1 million per wrongful act and a $2 million aggregate Premium costs vary by location, and Regal charges a $50 administrative fee to cover costs related to policy management and claims assistance Premiums are generally paid in a lump sum, though we may allow installment payments at our discretion, with premium increases billed to you accordingly The insurance underwriters determine the premium, not us, and fewer than 20 locations are paying the higher premium rate.
Our fee for each installment ranges from $15 to $25 We are listed as additional insureds on all relevant insurance policies, including those held by Wal-Mart or other landlords if we are a party to the lease Additionally, Wal-Mart requires that you maintain workers’ compensation coverage meeting statutory limits or, if none, at least $500,000 per occurrence, along with Employer’s Liability coverage of a minimum of $500,000 per employee for bodily injury by accident and disease These premiums typically range from $300 to $1,000 annually, depending on state law Proof of this coverage must be provided upon request.
The Monthly Fee covers the franchise fee, base rent, and rental tax if we are a party to the lease It is determined at our sole discretion, based on the monthly base rent charged for the premises If the lease includes additional rent such as percentage rent, you are responsible for these amounts and applicable taxes, which we will handle and remit to the landlord The Monthly Fee is specified in your Franchise Agreement prior to signing You can request us to negotiate the lease terms with the landlord to potentially lower the Monthly Fee, but there is a risk that the landlord may choose not to renew the lease.
Please note that Wal-Mart, one of our landlords, may transition to a percentage-based rent model, where rent is calculated as a certain percentage of your gross sales each month, typically not exceeding 20% Once this change is implemented, there will be a minimum monthly rent payment This shift to a percentage-based rent structure could impact your occupancy costs significantly, depending on your sales performance.
Monthly Fee structure may be amended to reflect the change by separating rent payments and rental tax from the Monthly Fee
Rental tax charges depend on the laws of your salon's jurisdiction For example, in high-market value areas, a 400 sq ft salon typically incurs no rental tax, while a 1,500 sq ft salon may be subject to an $800 monthly rental tax If your salon is a party tenant to the lease, the rental tax will be incorporated into the Monthly Fee.
When starting your salon operation mid-month, you'll pay a pro-rata share of the Monthly Fee based on the number of days you occupy the space The pro-rata amount varies from no fee if you begin on the first day of the month to approximately $14,517 for a 30-day operation in a 31-day month, based on an estimated $15,000 monthly fee.
If you are not a party tenant to the lease, the pro-rata rent and total rent for three months are negotiated directly with your landlord; these figures are estimates based on a low-end abated rent rate and can reach up to $10,000 per month, with your actual rent potentially higher The pro-rata rent amount depends on the day of the month your salon opens, with the maximum estimated rent of $10,000 monthly assuming a 30-day operation within a 31-day month.
In addition to the monthly base rent and rental tax, tenants may be responsible for additional charges such as the Monthly Utility Charge for shared utility use and common area maintenance (CAM) fees, regardless of whether they occupy the premises directly If these charges are required by the landlord, tenants must pay them, and our organization will collect and pass these amounts to the landlord When we are a party tenant to the lease, the CAM included in our Franchise Agreement covers property insurance and property taxes charged by the landlord, even if the landlord itemizes these costs separately in the lease.
The Security Deposit, totaling equivalent to the last two months’ Monthly Fee plus applicable rental taxes, Monthly Utility Charges, and CAM if applicable, is held to ensure your faithful performance of the Franchise Agreement, including returning the premises in white box and broom clean condition The deposit is returned at the end of the franchise, without interest, after vacating the premises, returning property, and settling any claims, but no earlier than three months after franchise expiration The deposit is not maintained in a separate interest-bearing account We may apply it against any overdue obligations or costs incurred due to your operations and customer issues, with the right to require replenishment within 14 days of notice if needed If your Security Deposit is increased, the additional amount must be paid within 14 days Upon early termination or holdover, the security deposit is forfeited.
To operate your nail salon legally, you must obtain and pay for all necessary business licenses, fictitious name filings, and permits required by state authorities The State Board of Cosmetology or similar regulatory agencies oversee your profession and business operations, and compliance with their licensing and operational standards is mandatory before opening and throughout the franchise term Failing to meet these regulations can result in temporary or permanent shutdowns, emphasizing the importance of adhering to all legal and licensing requirements.
Many franchisees opt to order additional furnishings and equipment, such as extra pedicure spas, technician’s tables, and dryers, beyond what is included in the Snow White Package If your salon exceeds 400 sq ft., you may need to purchase extra furnishings, which will increase startup costs, with expenses varying based on your selections and salon size For services like waxing and eyelash extensions offered before opening, specific furniture such as a wax material cart ($250) and an electronic HT Perfect Chair ($1,999) or a $1,699 non-electronic model must be purchased from Alfalfa, and these costs are not included in the initial estimate Conditions for offering eyelash extension services are detailed in Item 16 of the agreement.
All trainees, including you and your manager, are required to attend training at our Baton Rouge, Louisiana facility prior to opening, with all associated costs—such as transportation, lodging, meals, and incidentals—covered by you Estimated expenses range from the low end for one attendee to the high end for two attendees, but actual costs may vary based on travel timing, booking expenses, the number of participants, and personal preferences Additional details about the training can be found in Item 11, and travel costs may increase depending on factors like distance, airline, hotel choices, and other individual preferences.
(10) These expenses relate to miscellaneous items, decorative items, flowers, candy, paper supplies, stationery, cotton goods, advertising, flyers, handouts, samples, bric-a-brac, telephone line installation, etc