Buff City Soap Franchise Opportunity for 2023
This article is based on the video featured above, originally recorded for Vetted Biz Youtube Channel.
A Buff City Soap franchise is a personal care product retail Makery also known as “BCS Makery ”. BCS Makery is an upscale, rustic and minimalistic retail body products Makery.
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Buff City Soap
The franchise originated as Buff City Soap LLC, a Tennessee limited liability company that was formed in October 2013 to operate the initial Buff City Soap Makery retail location in Bartlett, Tennessee. Mr. Sutton has served as the Co-Interim Chief Executive Officer since April 2021. Mr. Sutton is also the Managing Partner of Guideboat Capital Partners, a private equity firm in Dallas, TX that he founded in February of 2018.
BCS Makery’s provide high-quality handmade and plant-based soaps, bath bombs, body and face products
The products are targeted to both male and female consumers. There are currently 66 total Buff City Soap shops, 57 franchise locations and 9 company owned locations.
How Much Is a Buff City Soap Franchise?
Buff City Soap Franchise Fee
$50,000
The initial license fee for a Buff City Soap franchise is $50,000. To open a Buff City Soap franchise, you must pay this initial fee.
If you qualify to develop and operate multiple Buff City Soap franchises, then you will pay 50% of the initial franchise fee for each additional BCS Makery to be developed under the Development Agreement.
Buff City Soap Franchise Cost
The estimated total investment necessary to begin operation of a Buff City Soap Franchise ranges from $307,200 – $1,082,000
Additional Cost Breakdown
The following costs are part of the upfront costs included in the initial investment. Many of these are one-time fees that are needed to launch the franchise.
Additional Cost Breakdown
Additional Cost Breakdown
| Construction and Leasehold Improvements | $50,000 – $400,000 |
| Furniture and Fixtures | $50,000 – $100,000 |
| Equipment | $10,000 – $50,000 |
| Architects and Engineering | $5,000 – $5,000 |
| Other Professional Fees | $1,000 – $20,000 |
| Opening Inventory | $45,000 – $70,000 |
| Opening Supplies | $11,000 – $15,000 |
| Computers, software, telecommunication | $6,000 – $15,000 |
| Interior and Exterior Signs | $7,000 – $50,000 |
| Training and Pre-Opening Expenses | $9,000 – $15,000 |
| Pre-Opening Labor | $8,000 – $12,000 |
| Market Introduction Budget | $15,000 – $40,000 |
| Insurance | $1,300 – $4,000 |
| Miscellaneous Expenses | $5,900 – $95,000 |
| Additional Funds – 3 months | $63,000 – $96,000 |
| Total | $307,200 – $1,082,000 |
Additional Cost Breakdown
Additional Cost Breakdown
| Training Agreement Deposit Fee | $1,000 |
| Initial Purchase of Materials | $1,000 |
| Architect Design | $0 – $10,000 |
| Leasehold Improvements | $30,000 – $60,000 |
| Security Deposit, If Required | $0 – $15,000 |
| Rent | $1,000 – 4,000 |
| Furniture, Equipment, Primary Sign & Supplies | $4,430 – $12,130 |
| Notebook Computer at Kumon Center | $500 – $2,000 |
| Professional Fees | $1,000 – $3,000 |
| Liability Insurance | $480 |
| Business License, Name Registration | $100 – $200 |
| Kumon Lead Management Telephone System | $480 – $600 |
| Recommended Reading List | $2,600 |
| Fingerprinting, Criminal Background Check | $18 – $60 |
| Payroll Cost for Assistants (3 months) | $7,350 – $8,820 |
| Additional Funds – 3 Months | $13,500 – $18,000 |
| Total | $64,458 – $139,890 |
OnGoing Cost and Fees:
Royalty Fee: 6% of Gross Sales
Brand Contribution Fee: 2% of Gross Sales
How Much Do Franchise Owners Make?
Buff City Soap Franchise Sales Figures
Buff City Soap does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. However, if you are purchasing an existing BCS Makery, the company may provide you with the actual records of that BCS Makery.
However, using the Franchisor income statement we can deduce from look at the income statement line item “Franchise Revenue” / “Brand Fund Contributions”
Royalty Fee: 6% of Gross Sales
In 2020 franchise revenues were $960,000
Estimated Total Franchise Sales: $16 million
Estimated Average Franchise Sales: $767,5000
- First, based on a midpoint investment of $694,600 with estimated profits of $66,630 at a 10% profit margin it would take about 11 years to recoup your investment.
- Second, based on a midpoint investment of $694,600 with estimated profits of $104,190 at a 15% profit margin it would take about 8 years to recoup your investment.
- Third, based on a midpoint investment of $694,600 with estimated profits of $133,260 at a 20% profit margin it would take about 6 years to recoup your investment.
This is just an estimated sales based on the franchisor’s income statement and can vary greatly depending on the length that the particular franchise location has been open and how well the business is run.
Buff City Soap Income Statement
Statements of Operations
| 2020 | 2021 | |
|---|---|---|
| Revenues | ||
| Royalty fees | $959,482 | $306,190 |
| Brand fund contributions. | $514,183 | $194,127 |
| Development fees | $359,246 | $18,922 |
| Franchise fees | $83,561 | $31,191 |
| Other income | $93,790 | $171,382 |
| Total revenues | $2,010,262 | $721,812 |
| Expenses | ||
| Labor | $343,301 | $381,048 |
| Advertising and marketing | $396,244 | $366,094 |
| Professional fees | $336,322 | $218,109 |
| Travel expenses | $114,541 | $127,931 |
| Technology fees | $97,473 | $115,385 |
| Other operating | $120,655 | $80,047 |
| Total expense | $1,408,536 | $1,288,584 |
| Other income | $25,428 | – |
| Net income (loss) | $727,154 | $(566,772) |
Income Statement Key Insights
Overall, Buff City Soap is a profitable business, with a net income of $727,000 in 2020. The year prior the company had a net income of ($567,000). Total revenues were $2.1 million while expenses were only $1.4 million indicating a healthy profit margin of around 33% for the franchisor. From 2019 to 2020 the company increased revenues by 178% from $721,000 to $2.01 million.
Buff City Soap Cash Flow Statement
Statements of Cash Flow
| 2020 | 2019 | |
|---|---|---|
| Operating Activites: | ||
| Net income (loss) | $727,154 | $(566,772) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
| Depreciation and amortization | $3,232 | – |
| Change in operating assets & liabilities: | ||
| Accounts receivable | $(2,405,104) | $(137,908) |
| Prepaids and other current assets | $(187,631) | $51,746 |
| Other receivables | $(749.671) | $(1,065,000) |
| Contract acquisition costs | $(869,636) | $(54,206) |
| counts payable, other liabilities, and accrued liabilities | $838,381 | $239,811 |
| Deferred revenue and deferred development fees | $6,449,368 | $2,492,387 |
| Receivables and payables from affiliates | $(3,515,750) | $(716,623) |
| Cash provided by operating activities | $290,343 | $243,435 |
| Investing Activities: | ||
| Purchases of property and equipment | $(21,209) | – |
| Cash used in investing activities | $(21,209) | – |
| Net increase in cash and cash equivalents | $269,134 | $243,435 |
| Cash and cash equivalents at the beginning of the year | $282,726 | $39,291 |
| Cash and cash equivalents at the end of the year | $551,860 | $282,726 |
| Supplemental Disclosure of Cash Flow Information | ||
| Cash paid during the year for taxes | – | – |
Cash Flow Statement Key Insights
In 2020, Buff City Soap had a net income of $727,000 and their cash, cash equivalents and restricted cash was $551,860 at the end of 2020 a 95% increase from the cash they started with at the beginning of the year. This increase in cash is a result of cash provided by operating activities and the largest positive cash item is deferred revenues and deferred development fees which accounted for $6.5 million. This increase in cash compared to 2019 which had cash at the end of the year of $283,000 indicates the company is producing higher revenues most likely due to the expansion effort of their stores.
How Many Buff City Soap Units Have Opened and Closed?
Over the last three years the company has grown in adding franchise locations. In 2020 there was the biggest growth of 33 additional franchise units compared to 2019 which only added 16 new units.
Should You Invest in a Buff City Soap Franchise?
The consumer market for a BCS Makery is highly competitive, generally mature and well developed. Our target market in the soap and body products industry is unique and rapidly growing. We believe that the “experiential entertainment” provided to Buff City Soap customers as well as the quality of products offered by us will differentiate a BCS Makery in the marketplace and may provide a significant advantage over other soap and retail body products shops.
We strongly recommend you speak to at least 5 Buff City Soap franchisees to better understand the financials (see questions to ask).
Think Buff City Soap is the right franchise for you, or are you interested in other franchise opportunities in the Retail Products and Services industry? Check out our listings page on the Vetted Biz website for thousands of franchises available for your investment.
