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The Lash Lounge Franchise Review (2021)

Written by: Patrick Findaro
Last Updated by Catalina Lima: August 18, 2022
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The Lash Lounge

This article is based on its 2021 FDD

The Lash Lounge was founded because of the need for a service that gives the everyday woman a glamorous appearance and saves time. Their focus is to provide an amazing customer service by building  personal connections with each person, treating every customer like a special guest and creating a relaxing escape from daily life.

The Lash Lounge Franchise Background

They specialize in semi-permanent eyelash extensions. Their mission is to provide each client with a low-maintenance beauty routine, a simplified lifestyle and a new definition of confidence.

Beyond the lashes, the beauty salons also have a makeup counter and a clothing and accessories boutique, making it a one stop shop.

the lash lounge

Management Team

Anna Phillips, the Founder and CEO began her career as a massage therapist, esthetician and permanent makeup artist. She worked as a massage therapist at Google, a highly coveted position, where she soaked in the entrepreneurial and creative atmosphere. While living on the west coast, Anna came across the application of eyelash extensions – a service only known to starlets and industry insiders at the time.

After a move to Texas, Anna became one of the first certified eyelash extension trainers for Xtreme Lashes and traveled the U.S. training others on the service. She also rented a small room taking clients that eventually grew into a wide-spread demand.

Anna opened the first Lash Lounge salon in 2006 and evolved the concept into a franchise in 2010.

Franchise Health And Beauty Industry Analysis

Franchise Strengths

  • Operationally simple with all the stylists already with their certifications
  • Recurrent revenue streams (VIP memberships as well)
  • Ability to have a manager run the day-to-day of the business
  • One of the firsts to establish in the market

Franchise Weaknesses

  • Reliant on skilled stylists to deliver the service that the customer expects
  • Operates in a competitive environment with low barriers of entry

The Lash Lounge Franchise Opportunities

  • Ability to invest in a growing brand in a fast growing segment of the beauty industry
  • False lashes market is estimated to bring in US$ 1,486.8 million by the end of 2022 (Fact.MR)
  • Since 2012, false eyelash sales have grown by 75%. It is a $170 million market. (The Washington Post)

Threats In The Lash Lounge Franchise Market

  • Changing consumer preferences and styles
  • Other nearby competition and growing national chains
  • Many consumers see as “non-vital” good, and is thus is more prone to economic recessions

The Lash Lounge Franchise Cost (2019 FDD)

How Much is a The Lash Lounge Franchise? 

Cost Types Amount (in USD) When Due To Whom Payment is to Be Made
Low High
Initial Franchise Fee $49,500 $49,500 When Franchise Agreement is signed Us
Lease Payment (first 3 months) $4,650 $24,220 As incurred Landlord
Security Deposits $3,078 $9,892 As incurred Landlord
Leasehold Improvements $73,270 $215,946 As required Contractors and third party suppliers
Furniture, Fixtures, Décor, and Equipment $49,328 $78,705 As required Us and Approved Suppliers
Salon Layout, Architect, Engineer, Drawings, and Permits $4,287 $19,585 As required Approved suppliers, your architect and engineer
Construction Management $0 $10,000 As incurred Approved suppliers or third party suppliers
Initial Supplies $5,478 $6,987 As incurred Approved suppliers
Outdoor Signage $3,365 $13,497 As incurred Approved suppliers
Point of Sale (“POS”) Register, Hardware, Software $3,493 $10,213 As incurred Approved suppliers
Initial Cosmetic Inventory Package $1,800 $2,500 As incurred Designated Suppliers
Pre-opening training expenses (per person) $5,500 $8,000 Before opening Us and third party suppliers of transportation, food and lodging for you and your employees
Telephone and Utility Deposits and Expenses $250 $500 As incurred Third party suppliers
Grand Opening Event $1,000 $1,500 As incurred Approved suppliers
Business Licenses, Permits, etc. (first year) $200 $1,300 As agencies require Applicable agencies
Insurance Deposits and Premiums (first three months) $1,500 $2,000 Before opening Insurance carriers
Additional Funds – (first three months) $35,000 $45,000 As incurred Various
Grand Total $242,699 $502,345
Development Fee $79,500 (2-Pack) $99,500 (3-Pack) execution of Development Agreement
Initial Investment to Open Initial/Single Salon $193,199 $452,845 Totals from Chart A of this Item 7 less the Initial Franchise Fee. Totals from Chart A of this Item 7 less the Initial Franchise Fee.
Total $272,699 – $532,435 (2 Salons) $292,699 – $552,345(3 Salons)
RoyaltyAd-Fund
6%2%
  1. According to Item 7 in The Lash Lounge 2021 FDD

Historical The Lash Lounge Franchise

How Much Do The Lash Lounge Franchise Owners Make?

2017 GROSS REVENUE FOR FRANCHISEES IN OPERATION FOR TWO OR MORE CALENDAR YEARS AS OF DECEMBER 31, 2017

FDD Disclaimer: “The chart below includes the total Gross Revenues for all System Salons that were in operation for two full calendar years or more. Please carefully read all of the information in this Item 19, as well as all of the notes following the charts in conjunction with your review of this historical data.”

Location Type Gross Revenue 2017 Service Revenue 2017 Product Revenue 2017
Affiliate No. 1 $874,895 $838,014 $36,881
Affiliate No. 2 $805,252 $778,518 $26,734
Affiliate No. 3 $525,523 $504,858 $20,665
Affiliate No. 1 $382,217 $367,624 $14,594
Affiliate No. 2 $407,054 $390,181 $16,873
Affiliate No. 3 $308,117 $292,756 $15,362
Affiliate No. 4 $280,981 $269,077 $11,904
Affiliate No. 5 $622,518 $600,995 $21,523
Affiliate No. 6 $306,074 $297,831 $8,243
Affiliate No. 7 $633,037 $611,704 $21,334

“The original prototype for a THE LASH LOUNGE salon included additional floor space for retail boutique sales. Salons which opened prior to December 31, 2016, and are therefore included in the above chart, operate pursuant to this original prototype model. Salons of the type described in this disclosure document, however, will neither include the additional floor space required for, nor revenues related to, boutique sales. As a result, the above chart breaks out total revenue into two relevant categories: service-derived revenue and product-related revenue.”

 Affiliate No. 1Affiliate No. 2Affiliate No. 3
Salon Sq. Footage176015631000
Number of Stations865
    
Gross Revenue   
Services$838,014$778,518$504,858
Retail$36,881$26,734$20,665
Total Gross Revenue$874,895$805,252$525,523
  1. According to Item 19 of The Lash Lounge 2018 FDD

2017 REVENUES, EXPENSES, AND INCOME FOR AFFILIATE-OWNED SALONS WHICH HAVE BEEN OPERATING FOR AT LEAST TWO CALENDAR YEARS

FDD Disclaimer: “The following chart includes certain revenue and expense information with respect to three affiliate- owned Salons which were operating for the full 2017 calendar year. The first and second affiliate locations include a larger premises and footprint—which includes space for boutique sales— than both the third affiliate location and those salons developed pursuant to this disclosure document. More recent salons, that is, those developed during the final quarter of 2015 or later, do not include a separate boutique retail space, and is consistent with the footprint of the third affiliate location depicted below.”

Affiliate No. 1 Affiliate No. 2 Affiliate No. 3
Variable Labor $343,401 $291,521 $191,823
Rackbar Supplies $25,198 $28,779 $16,146
Retail COGS $14,336 $9,815 $6,908
Gross Profit $492,960 $475,137 $310,646
Gross Margin % 56,23% 59,00% 59,11%
Operating Expense
6% Royalty Fee $52,494 $48,315 $31,531
2% Marketing Fee $17,095 $16,105 $10,322
Local Salon Marketing $12,843 $12,843 $13,843
Fixed Labor $47,866 $44,837 $44,200
Rent $89,918 $63,048 $48,224
Bank & CC Fees $17,490 $16,053 $10,754
Other Expenses $62,809 $86,664 $43,313
Total Operating Expenses $300,515 $287,865 $201,187
Operating Profit $191,445 $187,272 $109,459
Operating Margin 22% 23% 21%

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