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Buff City Soap Franchise Opportunity For 2022

Written by: Brooks Gammill
Last Updated: November 29, 2021
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Buff City Soap Franchise

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.


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. 

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.

Buff City Soap Franchise

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. This is the upfront fee that must be paid when opening a Buff City Soap franchise.

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

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

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

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Buff City Soap On-Going 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

Buff City Soap Statements of Operations

 20202021
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)

Buff City Soap 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.

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Buff City Soap Cash Flow Statement

Buff City Soap Statements of Cash Flow

   
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

Buff City Soap 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?

System-wide Outlet Summary

Outlet typeYearOutlets at the Start of the YearOutlets at the End of the YearNet Change
Franchised201868+2
2019824+16
20202457+33
Company-Owned2018550
201957+2
2020792+
Total Outlets20181113+2
20191331+18
20203166+35

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.

Buff City Soap Franchise

Should you invest in a Buff City Soap Franchise?

The consumer market for a BCS Makery is highly competitive, generally mature and well developed. However, we believe that the segment of the soap and retail body products market targeted by us is still relatively unique and growing rapidly. 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.

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