SPEC
SPEC offers franchises to establish beauty and wellness schools training students in various services like hairstyling, cosmetology, and esthetics under brands like The Salon Professional Academy or Elevate Salon Institute. Known for uniform standards and comprehensive training programs, SPEC operates in the professional education sector.
SPEC franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a new TSPA or ESI B&W School franchised business ranges from $1,052,420 to $2,073,674. This includes the mandatory payment of $49,000 to the franchisor or its affiliates, regardless of the service mark chosen [p.1].
What is the initial franchise fee?
The initial franchise fee is $49,000 upon execution of the Agreement [p.62]. This fee is nonrefundable and is allocated between initial services recognized at a point in time and ongoing support services recognized over the franchise term [p.127].
What are the ongoing royalty and advertising fees?
Royalties are based on a percentage of franchisee revenue, recognized as the underlying revenue is generated [p.127]. Advertising fees are not explicitly detailed in terms of specific amounts but include costs related to media directed primarily at the local market area, such as television, radio, and print advertisements that prominently display proprietary marks [p.99].
How long is the initial franchise agreement, and can I renew it?
The initial franchise term generally ranges from 10 to 15 years [p.127]. The conditions under which the franchise can be terminated and a franchisee's rights upon non-renewal may be affected by Illinois Law (815 ILCS 705/19 and 705/20) [p.157, p.161], but specific details on renewal are not provided in the excerpts.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you generally cannot transfer ownership of your franchise without good cause as determined by the franchisor [p.168]. Good cause includes scenarios like a right of first refusal for the franchisor to purchase the franchise instead [p.168].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.174]. Additionally, the franchisor has the right to terminate if the franchisee is in default under another agreement with the franchisor or if there is no reasonable cause and undue influence is used [p.179]. Good cause for termination includes failure to comply with lawful provisions of the franchise agreement, which must be cured within a reasonable time frame [p.167].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
You receive a protected territory, but it is not exclusive. The size and scope of your protected territory are determined based on various factors, including population, demographics, and competition [p.40]. This means you may face competition from other franchisees or outlets owned by the company operating under different proprietary marks within your designated area [p.40].
What training and ongoing support does the franchisor provide?
The franchisor provides both initial and ongoing training and support. Initially, Trainees receive a minimum of 178 hours of training covering areas such as site selection, marketing, management, and operations [p.60]. Ongoing support includes post-opening training on new developments, techniques, and operational improvements [p.61], as well as access to the Company's proprietary intellectual property for the duration of the franchise term [p.126].
How many franchised outlets are there, and how many have closed or been terminated?
There were 26 franchised locations that operated for all of 2024, with audited financial statements. Additionally, three schools either joined the franchise during the year or do not have audited financial statements. According to the FDD, there are three former franchisees listed as having had their franchise agreements terminated, canceled, not renewed, or otherwise ceased to do business under the agreement during the most recently completed fiscal year [p.54].
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information based on actual records of existing outlets you are considering buying [p.47]. However, they do not make any representations about a franchisee's future financial performance or past performance of company-owned or franchised outlets beyond what is included in Item 19 of the disclosure document [p.50].
What am I restricted to selling, and where must I buy supplies?
You are not specifically restricted to selling any particular products, but the franchise agreement may limit your ability to operate a similar business during the term of the franchise. You may have to purchase certain supplies from designated brands manufacturers like L'Oréal, as specified in [p.25]. Additionally, you must obtain approval from the franchisor before purchasing or leasing equipment, supplies, inventory, or other goods or services from an unapproved supplier, as detailed in [p.70] and [p.26].