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SmartStyle Franchise Costs $184K – $326K (+ 2024 Profits)

SmartStyle is a prominent chain of hair salons, distinguished by its strategic locations within Walmart stores, which significantly contributes to its foot traffic and client base. Established in 1996, the franchise embarked on its franchising journey in 2016, illustrating a successful expansion model that has led to the establishment of thousands of salons across the United States, Canada, and Puerto Rico.

The brand’s affiliation with Walmart not only enhances its accessibility to a broad spectrum of customers but also underscores its convenience and integration into the shopping experience. With its headquarters in Minneapolis, Minnesota, SmartStyle offers a comprehensive range of hair care services, including hairstyling, cutting, waxing, and coloring.

This wide array of services caters to a diverse clientele seeking quality hair care solutions. The franchise differentiates itself from competitors through its advantageous locations, a proven business model, and the provision of thorough training and support to franchisees.

a financial plan for a franchise
a financial plan for a franchise

Initial investment

Type of ExpenditureAmount
Initial Franchise Fee/Development Fee$40,000
Leasehold Improvements$60,000 – $120,000
Furniture, Fixtures, Equipment and Supplies$30,000 – $50,000
Construction Management Services Fee$6,000
Construction and Design Plan Review$1,000
Post Build Review$2,000
Total$184,000 – $326,000

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 for SmartStyle is detailed as follows:

  • For a single store, the initial franchise fee is $39,500.
  • If you acquire development rights for more than 6 stores, additional fees apply: $69,500 for 3 stores, $99,500 for 6 stores, and $10,000 for each additional store beyond 6.

Royalty Fee

The continuing royalty fee is initially 4% of Gross Sales for the first 52 weeks, increasing to 5% or a minimum of $100 per week, whichever is greater, thereafter.

Marketing/Advertising Fee

The Advertising Fee is 2% of the franchisee’s Gross Sales, paid weekly, used primarily for national promotions and may increase up to 2.5%.

Lease or Rent Fee

The rent fee is typically the greater of $1,000 or 16% of monthly gross sales, with the actual amount potentially ranging from $1,000 to $5,600 monthly.

revenue

Revenue & Profits

a financial plan for a franchise
a financial plan for a franchise

Franchise pros and cons

The Pros:

  • Multiple hours of classroom training: the support team shares their experience via 24 hours of classroom training to help franchisees understand crucial franchise operations. 
  • Comprehensive business training: extensive business training covers stylist education, site approval, lease negotiation, professional marketing, promotion and advertising and other programs designed to help franchisees build a successful business.
  • Growth potential: the never-ending demand for professional hair care services makes this an attractive franchise opportunity relevant to every community and economic climate. 
  • Recurring revenue model: back to back hair care services attract consistent, guaranteed income. 
  • A tech-resistant business concept: professional hair care resists technological needs or outsourcing because every treatment must be done in person, from a physical location. 
  • Financial assistance: SmartStyle has relationships with third-party funding sources to help franchise owners cater to equipment, startup costs, accounts receivable, trade fixtures and franchise fees. 
  • Exclusive territory protection: exclusive territory rights to operate a franchise in a designated location without competition from other SmartStyle studios. 
  • Convenient locations: franchises are strategically located in Walmart stores to drive traffic and increase revenue potential.
  • No mandatory experience needed: franchisees don’t need a hair care background to own a SmartStyle franchise. Business owners can rely on the corporate team to recruit, train and build a dependable staff to handle everyday operations. 

The Cons:

  • No absentee ownership: franchisees must be involved in everyday operations.
  • Not a part-time business: SmartStyle doesn’t provide part-time investment opportunities
  • Can’t operate from home/as a mobile unit: the franchises must operate from physical stores such as offices, warehouses and retail facilities. 
  • Competition: Great Clips, Sport Clips, Phenix Salon Suites & Sola Salon.

How to open a SmartStyle franchise

1. Conduct Preliminary Research

  • Understand the Franchise: Gain a comprehensive understanding of the SmartStyle brand, its business model, services offered, and its unique selling proposition, especially its locations within Walmart stores.
  • Franchise Offerings: Explore the range of services provided by SmartStyle salons, including hairstyling, cutting, waxing, and coloring, and consider how these services align with your business interests and local market demand.
  • Educational Opportunities: Consider the value of ongoing education and training opportunities, such as those provided by SmartStyle in partnership with Empire Beauty Schools, for enhancing the skills of your staff and improving service quality.

2. Assess Financial Requirements

  • Investment Range: Review the initial investment range required for opening a SmartStyle franchise, which includes the franchise fee, equipment costs, and other startup expenses.
  • Net Worth and Liquid Capital: Ensure you meet the net worth and liquid capital requirements for SmartStyle franchisees, which are essential for securing the franchise and supporting its operations until it becomes profitable.
  • Financing Options: Investigate financing options that SmartStyle may offer or recommend to assist with covering the initial investment and startup costs.

3. Apply for Franchising

  • Initial Inquiry: Submit an initial inquiry or expression of interest in the SmartStyle franchise through their official website or franchise development team.
  • Formal Application: Complete the formal franchise application process, which may involve providing detailed information about your financial standing, business experience, and strategic vision for the franchise.
  • Consultation and Approval: Engage in consultations with SmartStyle franchise representatives to discuss your application, clarify any questions, and move towards approval.

4. Undergo Training and Support

  • Comprehensive Training: Participate in SmartStyle’s comprehensive training program, which may include both classroom instruction and hands-on training in salon management, service delivery, and customer service.
  • Operational Support: Take advantage of the operational support provided by SmartStyle, including advice on salon setup, marketing strategies, and ongoing business management, to ensure a smooth launch and sustainable operations.

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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