Drybar Franchise Costs $813K (2023 Profits & Stats)

This article was updated with the 2023 Franchise Disclosure Document

Drybar is a recent success story among beauty franchises: since it started franchising in 2012 the franchise has expanded rapidly and now has 143 salons in the US, of which all are franchised-owned.

There’s a good reason for that: Drybar is not only benefits from the fast growing blow dry salon industry, but it’s also a very profitable business.

Indeed, with a $676,000 revenue per salon per year on average and an initial investment of just $813,000, it does seems like Drybar is a good investment. But what about the profits? Are they worth investing $813,000?

In this article we are looking at Drybar and its Franchise Disclosure Document to find out all you should know about the franchise: how much it costs, how profitable it really is and whether you should buy the franchise. Let’s find out!

Key stats

Franchise fee$50,000
Royalty fee7.0%
Marketing fee2.0%
Investment (mid-point)$813,000
Revenue per unit$676,000
Revenue per sq. ft.[franchise_value_revenue_per_sq_ft]
Sales to investment ratio0.8x
Minimum net worth$750,000
Minimum liquid capital$250,000
Source: Franchise Disclosure Document 2023

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What is Drybar?

Drybar is an American chain of blow dry bar salons synonymous with hair styling services known as blowouts, based in Irvine, California.

The chain was founded in 2010 by Alli Webb in Brent, California.

Drybar began franchising in 2012 and today has 143 franchised units in the US.

Drybar franchise: pros and cons

The Pros:

  • Comprehensive corporate and ongoing support: Drybar offers its franchisees growth strategies and ongoing support to build and grow their businesses smoothly. In addition, franchisees get access to the well-developed infrastructure and resources of the parent company, WellBiz Brands, Inc., as well as a network of successful business partners who share business insights.
  • Pre-opening training: The franchisor provides its franchisees with detailed pre-opening training and support to establish and operate successful Drybar salons. Franchisees get trained on the Drybar’s business system, equipment use, hiring and training qualified staff and grand opening.
  • Site selection and construction: The brand has an experienced real estate team in place to help franchisees establish their salons. It helps with the site selection process to identify a suitable business location. Also, it helps them with space planning, design, construction and support during the construction and lease negotiations.
  • Third-party financing: The brand has established third-party relationships to help fund franchisees in financing their salons’ development. Franchisees get funded for the startup costs, franchise fees, equipment, inventory and payroll.
  • Simple business concept: The brand embraces a simple franchise concept, just as their tagline states: No cuts. No color. Just blowouts. Franchisees can get started with smart design,little equipment and inventory requirements, then grow into multi-unit spaces.
  • Integrated marketing strategy: The Drybar franchise offers its franchisees turnkey and effective marketing strategies to promote their locations. These include social media, public relations, direct mail and promotional materials.
  • Exclusive territory protection: Drybar allows its franchisees to operate their salons in a protected market. Under the agreement, it does not permit any other franchise or operate competing channels in the agreed-upon area.

The cons:

  • No absentee ownership: The brand does not present a passive ownership business opportunity. It requires franchisees to be actively involved in decision-making and the daily operations of their salons.
  • Not a mobile or home-based business: The franchise cannot be run from home or a vehicle. The franchisor requires franchisees to operate from a fixed office space, retail facility, or warehouse.
  • Not a part-time business: The business does not allow for a part-time or side business. The salons should operate full-time.
  • Competition from other premium hair salon franchises such as Phenix Salon Suites or My Salon Suite to name a few

Drybar franchise costs

You have to invest around $813,000 to open a Drybar salon. Note that this is purely and average. Indeed, it varies based on many factors, such as the location of your salon, its size and other factors.

In addition to the initial franchise fee of $50,000 which you must pay to the franchisor, you would also pay for the leasehold improvements, furniture and fixtures, signage, professional fees, insurance, etc.

Startup costs

Here’s the full breakdown of costs:

Type of ExpenditureAmount
Initial franchise fee$50,000
Leasehold improvements$313,544 – $568,802
Furniture and fixtures$22,000
Signage$9,416 – $24,734
Insurance$3,900 – $9,786
Working capital (3 months)$45,000 – $70,000
Other$152,475 – $284,712
Total$596,335 – $1,030,034
Source: Franchise Disclosure Document (2023)

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Drybar franchise revenue

A Drybar salon makes $676,000 in revenue per year on average. Note that this is the average revenue per unit (per franchised salon) for 138 salons that were opened for all of 2022.

Indeed, there is a strong positive correlation between the number of years the salon was open and the revenue per unit as shown in the chart below.

Drybar franchise profits

Drybar franchised salons make $171,000 in profits per year. This corresponds to a 25% EBITDA margin.

Note that Drybar doesn’t provide any detailed information about the financial performance of its franchises in its latest Franchise Disclosure Document. Instead we had to make assumptions which we have summarized below.

Profit and lossAmount% Revenue
Revenue$676,282100%
COGS$(33,814)5%
Gross Profit$642,46895%
Staff$(270,513)40%
Royalties$(33,814)5%
Rent$(66,000)10%
Marketing$(33,814)5%
Other Opex$(67,628)10%
EBITDA$170,69925%
Source: FDD 2023, estimates

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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.

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