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Phenix Salon Suites Franchise Costs $710K – $1.23M (2024 Fees & Profits)

Phenix Salon Suites is a rapidly growing franchise in the beauty industry, renowned for its innovative salon suite concept. Founded in 2007 by Gina Rivera, a celebrity hairstylist with deep family roots in the salon industry dating back to 1929, the company has transformed the way salon professionals operate by providing private, individualized suites within a larger, well-located salon environment.

This model allows stylists and other beauty professionals to run their own businesses with greater autonomy and lower overhead compared to traditional salon setups. Headquartered in Encinitas, California, Phenix Salon Suites began franchising in 2012 and has since expanded significantly. By 2023, the brand boasted over 380 locations across 33 states in the U.S. and international branches in the United Kingdom.

The franchise has been consistently recognized for its success and growth, appearing on Entrepreneur Magazine’s Franchise 500 list for 11 consecutive years and being named the #1 salon suite brand in 2022. Phenix Salon Suites differentiates itself from competitors by leveraging its extensive industry experience and commitment to empowering salon professionals.

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Initial investment

Type of ExpenditureAmount
Initial Franchise Fee$52,500
Site Evaluation Fee$3,000
Real Estate/Rent (first 3 months’ rent plus security deposit)$29,525 – $78,412
Architectural Plans$7,863 – $13,413
Mechanical & Engineering Plans$9,775 – $16,675
Architectural Plan Review Fee$0 – $3,500
Construction Management Fee$6,500
Utility Deposits$2,500 – $5,000
Leasehold Improvements$722,500 – $1,232,500
Initial Marketing Expenses$10,000 – $15,000
Computer$1,000 – $2,000
Phenix TV$2,169
Furniture, Fixtures, Equipment, Interior Signs and Furnishings$75,296 – $116,783
Exterior Signs$6,900 – $13,800
Annual Meeting of Franchisees$500 – $1,000
Training Expenses (out-of-pocket costs for two people)$1,500 – $2,500
Insurance (first 3 months)$1,500 – $3,970
Professional Fees$0 – $10,000
Licenses, Permits and Business Formation$5,000 – $15,000
Gina’s Platform (incl. first 3 months of service)$850
Additional Funds (first 3 months)$22,881 – $32,385
Total Estimated Initial Investment$961,759 – $1,626,956
Landlord Contributions($251,292) – ($428,675)
Adjusted Estimated Initial Investment$710,467 – $1,198,282
Initial Inventory (Optional)$0 – $20,000
Meet and Greet Event Request Fee (Optional)$0 – $2,500
Meet and Greet Event (Optional)$0 – $5,000
POS System (Optional)$0 – $2,000
TOTAL (w/OPTIONAL)$710,467 – $1,227,782

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

The initial franchise fee is $52,500, paid in a lump sum upon execution of the agreement.

Royalty Fee

The royalty fee is $0.33 per square foot per month, based on the number of square feet leased by the franchisee.

Marketing/Advertising Fee

  • Initial Marketing Expenses: At least $10,000 during the first three months of operation.
  • Ongoing Marketing Expenses: At least $1,000 per month or 1% of the Business’s Gross Sales, whichever is greater, until at least 90% of the suites are occupied.

Brand Fund Fee

The National Brand Fee is $0.06 per square foot per month, which can increase by up to 3% per year.

Lease or Rent Fee

The initial investment includes $29,525 to $78,412 for the first three months’ rent plus security deposit.

Transfer Fees

The transferee must pay an initial franchise fee equal to 50% of the then-current standard initial franchise fee.

Renewal Fees

The renewal fee is $10,000 for the renewal term.

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Franchise pros and cons

The Pros:

  • Semi-absentee model: The franchise presents franchisees with a semi-absentee model opportunity where they can continue with their day jobs while managing their salons. Franchisees can manage their salon suites online and using remote technology.
  • Flexible hours: The franchise can be run part-time, which gives the franchisee freedom to choose their working hours. It gives them a good work-life balance and time to plan their growth.
  • Limited staff and inventory A Phenix franchise calls for small staff and inventory requirements as it can be managed by one front office staff member. Franchisees can get started quickly with fewer staff expenses and improve their profits.
  • Comprehensive training: The brand offers its franchisees a detailed training program to equip them with the basics of its business concept, operations, hiring and training staff and to help them carry out a successful grand opening.
  • Simple buildout design: Phenix Salon Suites utilizes a footprint of 2000–7500 sq. ft. Franchisees can make the most of the available real estate opportunities and can fit into any market, including strip malls, freestanding units and anchors.
  • Site selection and construction: The franchisor provides its franchisees with dedicated real estate directors, proprietary real estate technology and market demographics to identify a suitable location for their salon suites. In addition, it helps them with the lease negotiations to minimize the build-out costs.
  • Third-party financing: The franchisor provides its franchisees with third-party financing through third-party partnerships for the startup, development and ongoing fees.
  • Marketing and sales: The brand provides its franchisees with marketing and advertising tools and resources to attract beauty professionals to their locations. Franchisees can leverage the growing boutique salon suites concept, national and regional media, turnkey online and social media campaigns and personalized location promotions to reach a large audience.

The cons:

  • No exclusive territory: The franchisor does not grant its franchisees the right to work in a protected area. Franchisees may face competition from franchises authorized by the parent company or from brands and channels it controls.
  • Not a home-based business: The franchise cannot be run from a mobile unit or a home. Franchisees must have fixed office space, a warehouse, or a retail facility to operate from.
  • Competition: The brand faces competition from other brands, such as Sola Salon Studios.

How to open

1. Research and Initial Inquiry

  • Visit the Official Website: Start by visiting the Phenix Salon Suites franchising page to gather preliminary information about the franchise opportunity.
  • Request Information: Fill out the inquiry form to request more detailed information and receive a Franchise Disclosure Document (FDD).
  • Review Requirements: Ensure you meet the financial and personal requirements, such as a minimum net worth of $750,000 and liquid assets of $250,000.

2. Submit the Application

  • Complete Application: Fill out and submit the franchise application provided by Phenix Salon Suites.
  • Financial Assessment: Provide detailed financial statements and other necessary documentation to demonstrate your ability to meet the financial requirements.
  • Initial Interview: Participate in an initial interview to discuss your background, experience, and goals.

3. Attend Discovery Day

  • On-Site Visit: Attend a Discovery Day at the Phenix Salon Suites headquarters or an existing location to learn more about the franchise operations.
  • Meet the Team: Interact with the corporate team, including key executives and support staff.
  • Review Business Model: Gain an in-depth understanding of the business model, including property management and salon suite operations.

4. Secure Financing

  • Explore Financing Options: Investigate financing options through Phenix Salon Suites’ preferred lenders or other financial institutions.
  • Prepare a Business Plan: Develop a detailed business plan to present to potential lenders, outlining your strategy for operating a successful franchise.
  • Obtain Financing: Secure the necessary funding to cover the initial franchise fee, real estate costs, and other startup expenses.

5. Site Selection and Lease Negotiation

  • Real Estate Assistance: Work with Phenix Salon Suites’ real estate experts to identify and secure an optimal location for your franchise.
  • Lease Negotiation: Negotiate the lease terms with the property owner, guided by Phenix Salon Suites’ proprietary real estate technology and market analysis.
  • Build-Out and Design: Collaborate with architects, engineers, and contractors to design and build out the salon suites to meet brand standards.

6. Training and Pre-Opening Support

  • Initial Training: Participate in comprehensive training covering all aspects of the franchise operation, including marketing, management, and customer service.
  • Marketing and Leasing Support: Receive support from the Phenix Salon Suites marketing team to attract and lease salon suites to salon professionals before opening.
  • Operational Support: Get ongoing assistance with setting up the business operations, including technology implementation and staff training.

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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