European Wax Center Franchises: 4 Years Payback & High Profits

Undeniably the largest waxing franchise in the US with close to 900 salons in total, European Wax Center is a very popular franchise among entrepreneurs. This is (partly) due to a very simple reason: European Wax Center is an incredibly profitable business.

Think about it: European Wax Center salons make on average $878,500 in turnover per year, yet the total investment cost is (only) $465,000. All in all, European Wax Center has one of the best payback in the industry (3-4 years).

How much does it really cost to open a new European Wax Center franchised salon in the US today? How much money can you really make as a franchisee? Is this a good investment? Let’s find out!

Key figures

Franchise fee	$45,000
Royalty fee	6.0%
Marketing fee	3.0%
Investment (mid-point)	$465,000
Revenue per unit	$878,000
Revenue per sq. ft.	$627
Sales to investment ratio	1.9x
Payback period*	4 years
Minimum net worth	$1,000,000
Minimum liquid capital	$500,000

What is European Wax Center?

European Wax Center is an American chain of franchised hair removal salons based in Plano, Texas.

It was founded by siblings Joshua and David Coba in Aventura, Florida in 2004.

The chain offers waxing services and skincare, body and brow products.

European Wax Center started franchising in 2006 and now has more than 893 locations worldwide, including 888 in the United States.

European Wax Center franchises pros and cons

The Pros:

• Site selection and buildout support: The franchisor provides its franchisees with site selection assistance to identify the most viable salon location considering traffic and growth potential. In addition, it helps them with the design layout, construction and access to nationally preferred vendors.
• Comprehensive training and education: The brand has a comprehensive training and education curriculum to train its franchisees about its systems, best operation practices, onboarding and grand opening launch support. Also, it offers them ongoing training on training their staff and sales marketing.
• Extensive corporate and ongoing support: European Wax Center has dedicated and experienced corporate support to help franchisees establish and grow their salons. It offers franchise business consultants, a national conference and regional meetings with multiple learning sessions.
• Aggressive marketing strategies: The brand has results-driven marketing and advertising strategies and tools in place to help its franchisees attract new guests and drive growth and profitability. Franchisees get national and local traffic-building media, pre-approved local programs, regional advertising and promotional campaigns.
• Third-party financing: The brand has established relationships with third-party sources to help its franchisees with finances. It provides them with funding for their franchise fee, startup costs, equipment, inventory and payroll.
• Multiple income channels: The franchise presents the franchisees with a variety of income streams to improve and diversify their earning potential. These include memberships, waxing and facial services.
• Simple business model: The brand embraces a small footprint of 1400–1600 sq. ft., which enables franchisees to utilize available real estate opportunities in their areas. Franchisees can get started quickly and scale into multiple units.

The cons:

• Not a home-based business: The franchise cannot be operated from a home or mobile unit. The franchisor requires its franchisees to have fixed office space, a retail facility, or a warehouse.
• No absentee ownership: A European Wax Center franchise does not present a passive investment opportunity. Franchisees must participate fully in the decision-making and operations of their salons.
• No exclusive territory protection: The brand does not allow its franchisees to operate in an exclusive territory market. Franchisees may face competition from other franchises licensed by the franchisor or brands and affiliates it controls.
• Not a part-time business. The franchise cannot be operated part-time or as a side business. Franchisees must adhere to the agreed operating schedule.

How much does a European Wax Center franchise cost?

You would need to invest $465,000 to open a European Wax Center franchise on average.

The investment amount is an average that depends on factors like the studio’s location, size, etc. Generally, the investment ranges between $358,485 and $571,840.

Interestingly this amount is in line compared to other salon franchises as per our own salon franchises benchmarks ($450,000).

European Wax Center franchise startup costs

The investment covers all the startup costs you may need to start a salon. You must pay an initial franchise fee of $45,000 (or $36,000 if you are opening a 2nd location or more).

In addition to the initial franchise fee the investment also covers:

• Formation Costs: training expenses, leasehold improvements, equipment, furniture, signage, computer system, POS system, music system, permits, business licenses, professional fees (legal, accounting, architecture, etc.), etc.
• Initial Marketing: grand opening advertising, new center launch kit, etc.
• Operating Costs: waxing supplies, facial supplies, initial inventory of retail products, insurance, utility deposits, and working capital for the first 3 months, etc.

Startup cost	Low	High
Initial Franchise Fee	$45,000	$45,000
Formation Costs	$240,940	$401,340
Initial Marketing	$15,845	$30,000
Operating Costs	$56,700	$95,500
Total	$358,485	$571,840

How much revenue does a European Wax Center make?

On average, a European Wax Center franchised salon generates $878,500 in revenue per year.

Note that this number is the pre-pandemic revenue per salon (2019) as salons suffered from the pandemic and sales decreased in 2020 and 2021. Unfortunately, as of writing this article the 2022 numbers aren’t out yet so we are using the 2019 revenue numbers as a proxy for the 2022 as we expect the franchises to have recovered from their pandemic lows.

Note that European Wax Center does not disclose any revenue revenue data for its franchised-owned salon in the Franchise Disclosure Document. Instead we obtained revenue per salon by dividing the total franchises revenue ($612 million) by the total number of franchises (697).

How profitable is a European Wax Center?

We estimate that a European Wax Center franchise makes about $272,000 in profits per year. This corresponds to a 31% EBITDA margin.

When compared against other salon franchises, European Wax Center is in line with the industry (salon franchises have a ~25% EBITDA margin on average).

Note that European Wax Center only discloses royalty (6% sales) and marketing fees(3%). Indeed, like most franchises, European Wax Center does not provide a detailed profit and loss for its franchised salons. Instead, we had to use salon franchises benchmarks for other costs to calculate profits.

Profit and loss	Amount	% revenue	Source
Revenue	$878,455	100%	as per FDD
COGS	$(26,354)	3%	industry average
Staff	$(351,382)	40%	industry average
Rent	$(70,276)	8%	industry average
Royalties	$(52,707)	6%	as per FDD
Marketing*	$(43,923)	5%	industry average
Other operating costs	$(61,492)	7%	industry average
EBITDA	$272,321	31%

Should you buy a European Wax Center franchise?

To answer this question we must look at the payback: how long it takes for an investment (like buying a franchise) to be repaid using the profits generated by the business.

The great news about European Wax Center is that it has one of the best payback in the industry: 3.5 years on average.

Therefore it’s safe to say that European Wax Center is a very profitable franchise investment: you would repay creditors and investors (who helped fund the initial investment of $465,000) within 3 to 4 years on average. That’s an excellent payback!

Yet, keep in mind profits are only part of the equation: when choosing a franchise you should also take into consideration other factors such as the franchisor’s support, the training, competition, etc.

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