Blo Blow Dry Bar Franchise: AUV, Costs & Profits (2023)

With 95 locations in the US as of 2022, Blo Blow Dry Bar is arguably the leading blowouts salon and one of the largest premium women hair care franchise.

So if you’re considering getting into a high-growth beauty sector, opening a blowouts franchised salon may sound like a great option. But is Blo Blow Dry Bar a profitable business? How much profits can you really make as a franchisee?

With an estimated initial investment of $315,000 you may want to make sure this is a good investment. Don’t worry: in this article we’re looking into the latest Franchise Disclosure Document to find out whether you should buy a Blo Blow Dry Bar franchise. Let’s dive in!

Key stats

Franchise fee$45,000
Royalty fee6.0%
Marketing fee3.0%
Investment (mid-point)$344,000
Revenue per unit$326,000
Revenue per sq. ft.[franchise_value_revenue_per_sq_ft]
Sales to investment ration.a.
Payback period[franchise_value_investment_payback]
Minimum net worth$375,000
Minimum liquid capital$100,000
Source: Franchise Disclosure Document 2022

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About Blo Blow Dry Bar

Blo Blow Dry Bar is an American women’s haircare chain headquartered in Toronto, Ontario.

It was founded in 2007 by Ari and Vanessa Yakobson in Vancouver.

Its franchises offer a one-stop shop for women with services such as blowouts, blowouts with bonded extensions, blowouts with deep conditioning, up do la carte, hidden assets, head massages and braids.

Blo Blow Dry Bar began franchising in 2009 and as of today has 95 units worldwide, with 76 franchises in the US.

Blo Blow Dry Bar franchise pros and cons

The Pros:

  • Multiple revenue streams: It offers them multiple ways to earn, such as sales of carefully curated retail products, add-on hair services, makeup services, Blo on the Go and Blo Bridal.
  • Quality training and coaching: The brand has a detailed training and education program to help franchisees run successful salons and offer the best services to their guests. It offers them training on launching their salons, best practices in operations and management and hiring and training their staff.
  • Marketing and public relations:  Robust marketing strategieshelps them access proven marketing tactics, develop community awareness and build local partnerships. Franchisees also get digital marketing resources, a software platform for managing social media accounts and digital reviews, as well as graphic design resources.
  • Financing assistance: The franchisor connects its franchise owners with third-party funding partners. Franchisees get funding for startup costs, equipment, inventory and ongoing costs.
  • Real estate and construction: The franchisor provides its franchisees with real estate assistance in identifying the right location in terms of demographics and competition. In addition, it helps them with the designs, buildout and lease negotiations.
  • Exclusive territory protection: The franchisor grants its franchise owners the right to operate in an exclusive development market. Under the agreement, the franchisor does not authorize any other franchise or competing brand in the agreed-upon area.
  • Simple business model: The Blo Blow Dry Bar utilizes small footprints that can fit into the available real estate opportunities. Franchisees can make the most of their markets and scale their investment into multiple locations.

The cons:

  • Not a home-based opportunity: The franchise cannot be run from home or a vehicle. Franchisees need to have a fixed office space, a retail facility, or a warehouse.
  • Not a part-time business: A Blo Blow Dry Bar franchise is not a part-time or side business.
  • No absentee ownership: The brand does not present a passive investment opportunity. Franchisees are actively involved in the day-to-day operations of their salons.
  • Competition from other women hair care chains like Dry bar, Salons by JC or Sola Salon Studios to name a few

Blo Blow Dry Bar franchise costs

You have to invest around $315,000 to open a Blo Blow Dry Bar franchise business.

This is an average; indeed, it varies based on many factors, such as the location of your franchised business, its size, and other factors.

In addition to the initial franchise fee of $40,000, which you must pay to the franchisor, you would also pay for the leasehold improvements, furniture and fixtures, training, insurance, etc.

Here’s the full breakdown of costs:

Type of ExpenditureAmount
Initial franchise fee$40,000
Leasehold improvements$93,350 – $152,500
Furniture, fixtures ad equipment$46,000 – $55,500
Training$9,737 – $14,406
Insurance$600 – $750
Additional Funds- 3 months$6,000 – $25,000
Other$61,713 – $84,802
Total$257,400 – $372,958
Source: Franchise Disclosure Document (2022)

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Blo Blow Dry Bar franchise revenue

A single Blo Blow Dry Bar salon made $285,000 in revenues per year in 2021 on average.

This is the average sales per franchised salon for 68 of the 72 franchised businesses that were open for all of 2021. The revenue per salon actually ranges from $55,000 for the lowest performing salon up to $578,000.

Here’s the breakdown of revenue per salon by quartile (1st quartile being the top 25% performing salons):

Blo Blow Dry Bar franchise profits

On average, a Blo Blow Dry Bar franchise makes $48,000 in profits per year. This corresponds to a 17% EBITDA margin.

Blo Blow Dry Bar is a profitable franchise. Whilst a 17% EBITDA margin isn’t necessarily bad, it’s not the best profit margin across the industry. Indeed, we found that salon franchises have an EBITDA margin of around 25% on average.

We calculated this number using the information available in the Franchise Disclosure Document 2022. Unfortunately, Blo Blow Dry Bar has not provided detailed information on the cost of goods sold (COGS) and labour costs. Therefore, we used 3% and 40% of sales, respectively, as per our own benchmarks for salon franchises.

Profit and lossAmount ($)% revenueSource
Revenue$284,497100%as per FDD
Utility Expenses$(8,535)3%industry average
Labor$(113,799)40%industry average
Royalties$(17,070)6%as per FDD
Rent$(63,000)22%as per FDD
Marketing*$(8,535)5%industry average
Other operating costs$(19,915)7%industry average
EBITDA$48,00017%
* includes marketing fees
Source: Franchise Disclosure Document (2022)

Is Blo Blow Dry Bar a good investment?

Are the profits worth the estimated initial investment of $315,000? In other words, how long would it take for the profits to pay back creditors (the bank), investors and yourself as the franchisee?

As per our analysis, we found that Blo Blow Dry Bar has a 11 years payback period: you would need to wait 11 years on average to reimburse the $315,000 that was invested initially.

Whilst it’s not necessarily bad, it’s definitely not the best payback across the industry: we found that the average salon franchise has a 8 years payback in comparison.

Yet, note that this payback is based on the average performance of the salons as presented in the Franchise Disclosure Document as well as some of our estimates. There is no guarantee your franchise will perform as well as what is presented here.

In any case, when choosing a franchise, make sure to create your own financial projections and sensitivities as well as speaking to other franchisees.

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Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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