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Sola Salon Studios: an Expensive Franchise Costing $1.4M

One of the largest beauty salon franchise in the US with more than 620 salons today, Sola Salon Studios is an obvious choice for many franchisees who want to get into the beauty salon industry.

But is this really a profitable business? The question is a valid one indeed: as the franchisee you would have to fund the initial investment of $1,471,000 on average, much higher than salon franchises in general ($450,000).

In comparison, one salon makes $411,000 in revenue per year, what does it mean for your profits?

In this article we are diving into Sola Salon Studios and its Franchise Disclosure Document to find out whether it’s a good franchise investment or not. Let’s find out!

Key stats

Franchise fee$55,000
Royalty fee5.5%
Marketing fee1.5 - 2.0%
Investment (mid-point)$1,471,000
Revenue per unit$411,000
Revenue per sq. ft.$68
Sales to investment ratio0.3x
Payback period*25+ years
Minimum net worth$1,500,000
Minimum liquid capital$500,000
* using 10-15% net profit margin
Sola Salon Studios franchise business plan template

Download the Sola Salon Studios franchise business plan

📗 Updated with Franchise Disclosure Document

📊 5-year pro forma financial model

📞 Free support

What is Sola Salon Studios?

Headquartered in Lakewood, Colorado, Sola Salon Studios is an American chain of fully equipped high-end salon studios for beauty professionals.

Sola Salon Studios was founded in 2004 by Stratton Smith and Matt Briger. It creates ready-to-move-in spaces for estheticians, nail technicians, massage therapists and hairdressers.

Its franchising journey began in 2005 and it currently has over 628 locations worldwide, with 564 franchises in the US.

Sola Salon franchises pros and cons

The Pros:

  • Flexible build-out options: The brand’s salon designs are flexible and can fit into the available real estate opportunities. Franchisees can offer modern, unique salon build-outs for each beauty professional.
  • Minimal staff and equipment maintenance: Sola Salon Studios utilizes a real estate rental model that requires minimal staff and equipment. Franchisees get simple entry requirements and can scale their businesses and improve their profitability.
  • No inventory and receivables: The brand offers its franchisee move-in-ready salons all under one roof for salon professionals equipped with amenities like high-end cabinetry, floor-to-ceiling walls with sliding glass doors, Wi-Fi and all utilities. Franchisees can explore and grow their portfolios smoothly.
  • Integrated marketing expertise: The franchisor provides its franchisees with tested and proven national brand campaigns to attract beauty professionals to rent studios in their locations. In addition, franchisees get personalized local public relations resources and tools for their salon studios.
  • Comprehensive training and education: The brand offers its franchisees a detailed training and education curriculum to help them launch and operate their Sola salon studios successfully. It trains them on the parent company’s business concept, operations, hiring and training staff, as well as giving them growth advice and insights.
  • Third-party financing: The franchisor offers its franchisees financing assistance through partnerships with third parties. Franchisees get funding for their franchise fee, inventory, equipment and payroll.
  • Market analysis and site selection: The franchisor provides its franchisees with real estate experts to help them identify a competitive market and location. It also helps them access contractors to guide the build-out of their salons.
  • Exclusive territory protection: Sola Salon Studios grants its franchisees the right to operate in a protected market. It does not establish any other franchises or operate competing businesses in the development market.

The cons:

  • Not a passive investment: The franchise does not allow for absentee ownership. Franchisees must be actively involved in their salons’ day-to-day decision-making and operations.
  • Not a home-based opportunity: A Sola Salon Studios franchise is not a mobile business opportunity. Franchisees need to have office space, a retail facility, or a warehouse to operate from.
  • Not a part-time business opportunity: The franchise cannot be run part-time or as a side business. It requires franchisees to follow their parent company’s working hours.
  • Competition:  Supercuts, TONI&GUY and Sweet & Sassy.

How much does a Sola Salon franchise cost?

You have to invest around $1,471,000 to open a Sola Salon franchise studio.

This is an average. Indeed, it varies based on many factors, such as the location of your studios, their size, and other factors.

Sola Salon Studios startup costs

In addition to the initial franchise fee of $55,000 which you must pay to the franchisor, you would also pay for the leasehold improvements, furniture and fixtures, signage, equipment, insurance, etc.

Here’s the full breakdown of costs:

Type of ExpenditureAmount
Initial franchise fee$55,000
Leasehold improvements$504,000 – $1,440,000
Furniture and fixtures$147,000 – $405,000
Signage$10,000 – $20,000
Insurance$5,000 – $10,000
Working capital (3 months)$20,000 – $50,000
Other$67,143 – $154,517
Total$808,143 – $2,134,517
Source: Franchise Disclosure Document 2022
Sola Salon Studios franchise business plan template

Download the Sola Salon Studios franchise business plan

📗 Updated with Franchise Disclosure Document

📊 5-year pro forma financial model

📞 Free support

How much revenue does a Sola Salon make?

A Sola Salon Studios franchise makes $410,951 in revenue per year on average.

This is the average sales per franchised studio for 474 of the 555 franchised studios that were open for all of 2021, as disclosed in the Franchise Disclosure Document.

Over 2019 – 2021, average revenue per franchise studio has trended upward, from $373,000 in 2019 to $411,000 in 2021. This is a significant increase vs. 2020 (+38.7%, or $296,000 for 451 franchised studios) as Sola Salon recovered from the COVID-19 pandemic.

Typically 6,000 sq. ft. in size, a Sola Salon makes $68 in revenue per square foot per year on average, lower than the average we found for salon franchises ($270 per square foot instead).

How profitable is a Sola Salon franchise?

On average, we estimate that a franchised Sola Salon Studio makes $34,126 in profits per year. This corresponds to a 8% EBITDA margin.

Whilst an 8% EBITDA margin isn’t necessarily bad for a salon, it’s not the best profit margin across the industry to say the least. Indeed, we found that salon franchises have an EBITDA margin of ~25% on average instead (see our salon franchises benchmark).

Note that we calculated this number using the information available in the Franchise Disclosure Document 2022. Fortunately, Sola Salon Studios provides detailed information on the cost structure of its company-owned stores, which we adjusted for franchises instead (by adding royalties for example).

The reason behind such low margins is because of the rent expense: as per the FDD company-owned salons indeed paid the equivalent of 45% of revenues in rent, which is very expensive and much higher than salon franchises in general (17-20% on average).

It’s very important to note that franchised-owned salons may perform better than company-owned salons: they may spend less in rent and therefore have higher profits margins. Unfortunately, the information provided in the FDD by the franchisor is based on a few company-owned salons only.

Profit and lossAmount% revenueSource
Revenue$410,951100%as per FDD
Utility$(21,493)5%as per FDD
Royalties$(22,602)6%as per FDD
Rent$(186,284)45%as per FDD
Marketing$(7,192)2%as per FDD
Repair, maintenance$(24,123)6%as per FDD
Other operating costs$(25,131)7%industry average
* FDD only includes management costs ($36,000 per manager who can supervise multiple locations). Here we assume 3 employees earning $30,000 gross salary
Source: Franchise Disclosure Document 2022

Is Sola Salon Studios a good investment?

Despite the low profit margins, should you still invest in a Sola Salon Studios franchise? Well, this is where it gets complicated.

Even if we were to assume that franchised-owned salons perform better than company-owned salons (let’s say a 15% net profit margin), the initial investment cost is so high vs. the profits that we think buying a Sola Salon Studio is difficult to justify.

Indeed, as we saw earlier it would cost you on average $1,471,000 to open a new salon, yet one salon makes on average $411,000 in turnover per year. So even if we were to assume you manage to reach a 15% net profit margin, the payback would still be around 25 years.

That’s a very long payback: you would wait 25 years to repay creditors (banks) and any investors who invested initially (including yourself). Therefore, we don’t think Sola Salon Studios is a great franchise investment.

That being said, these numbers do not guarantee your salon will perform as such. In addition, profits shouldn’t be the only consideration when choosing a franchise. Instead, things like brand, competition, training, etc. are also very important.

Sola Salon Studios franchise business plan template

Download the Sola Salon Studios franchise business plan

📗 Updated with Franchise Disclosure Document

📊 5-year pro forma financial model

📞 Free support

How does it compare vs. other franchises?

Our reviewInvestmentSalesPaybackProfit marginBreakeven
Great Clips278,000586,0003
Sport Clips353,000379,0008
Fantastic Sam's398,000359,0007
Sola Salon Studios1,471,000411,00036
Hand & Stone Massage and Facial Spa666,0001,204,0004
Amazing Lash Studio470,000621,0005
Elements Massage446,000749,0004
Waxing The City359,000550,00013
The Lash Lounge372,000278,00017
Roosters Men's Grooming Centers275,000304,0006
European Wax Center465,000878,0004
Phenix Salon Suites899,000404,00015
My Salon Suite1,248,000404,00021
Palm Beach Tan781,000502,00010
Restore Hyper Wellness913,000894,0007
Cookie Cutters Haircuts for Kids249,000298,0006
Woodhouse Spa1,750,0002,023,0009
Salons by JC1,322,000489,00027
Deka Lash381,000326,00015
Sharkey's Cuts For Kids194,000230,0008
Massage Envy771,000952,0005
Cost Cutters Family Hair Care219,000273,0005
Blo Blow Dry Bar315,000284,00011
Massage Heights492,000926,0004
The Now Massage591,0002,327,0005
Pigtails & Crewcuts178,000260,0007
Sugaring NYC160,000293,00011
Tan Republic242,000176,00027

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