Phenix Salon SuitesA home for independent beauty professionals.

Welcome to Franchise Roundtable. I'm Alex. And I'm Jordan. Imagine a stylist opening the door to a salon suite for the very first time. They're, you know, stepping inside. And what they're looking at is just a completely blank canvas. Oh, yeah. It's such a big moment.

Right. They're standing there. They've got the keys in hand and they're already picturing their specific colors going up on the walls. They can practically see their most loyal clients sitting right there in the chair. Absolutely. They are. They're visual visualizing their independent business finally taking shape, it's no longer just a dream, but a physical reality that they can actually touch.

It is an incredibly powerful moment for any entrepreneur, really, crossing that threshold from working for someone else to finally having a place of their very own. Yeah, exactly. But now, I want you to shift your perspective for just a second, if you're listening to this.

Instead of being the stylist, imagine being the person who created the physical place where Where that stylist's dream could actually happen? That's a huge shift. It is. Imagine being the one who built the walls, who installed the doors and provided the foundation for that entire business to exist.

To figure out exactly how this dual business model works, we've got a stack of documents today, including their latest franchise disclosure document, brand guidelines, operational notes. Lots of material to go through. Definitely. And the core mission of our deep dive today is exploring the ownership opportunity with Phenix Salon Suites for Franchise Roundtable.

And you know, the basic model laid out in these sources is just fascinating. The franchise owner develops a location that contains fully equipped suites and then they license those individual spaces out to independent salon and other business professionals. So if you are the franchise owner, you're building a location to lease while the professionals inside your location are building their own individual businesses.

Which is such a unique dynamic. But I feel like, um, understanding how to build a space that caters to dozens of different independent businesses, it means we really have to look at who designed it in the first place. Definitely. Because when you read through the origins of Phenix, it feels incredibly grassroots.

It does not read like some, you know, sterilized concept cooked up at a corporate boardroom by people who have never actually swept hair off this lawn floor. No, not at all. The founder is Gina Rivera and her roots in the beauty business are about as deep as they get.

We are talking about a family history in the industry that stretches all the way back to 1929. Wow 1929. Yeah. She grew up in this world. She spent years working as a stylist herself, standing right behind the chair. So she inherently understood the physical toll, the client dynamics, and really the constant aspirations of beauty professionals.

She lived it. Exactly. And she opened the very first Phenix salon in 2007, and the brand itself is actually named after her son, Phenix. You know, naming a commercial real estate franchise after your son kind of proves this is personal for her. It really does.

But what stands out in the notes for me is how this entire business model was essentially reverse engineered. Like she looked at the traditional salon model and just asked, well, what can we offer for someone who's ready to strike out on their own, but simply does not have the massive capital required to buy or lease an entire building.

Right, because she recognized a massive bottleneck in her own industry. Her stated goal from the very beginning was highly specific. Give Salon professionals a viable way to operate their own businesses in individual suites, which makes total sense. Yeah, and when you look at the franchise disclosure document, the FDD, it explicitly describes these suites as equipped spaces that professionals can customize to express their own individuality.

Which if you think about it gives you as a prospective franchise owner a very clear, easy-to-understand customer profile right from day one. Yep. You know exactly the pain point you are solving. You're basically selling a tailored solution to a very specific demographic of professionals who want autonomy but you know they just need a manageable stepping stone to get there.

Exactly. And moving from the founder's vision to what this actually looks like in the real world is where the model really shines, I think. Because when a stylist rocks in, they aren't just renting a chair in a crowded, noisy, open concept room. Yeah.

The analogy that keeps coming to my mind when reading this is that the location functions, it's almost like a bustling little indoor neighborhood. Oh, I like that. All right. You walked down the hall and there are different different doors, different brands, and completely different personalities behind each one.

But there's this shared cohesive place to welcome people. It's a community, but with very distinct boundaries. To make that concrete, the literal model based on the disclosure is a collection of suites licensed to independent professionals. We're talking about full window doors with physical locks.

The locks are a big deal. They are crucial. That lock signifies true ownership and security for the stylist. But I think the most interesting engineering detail here is the major focus on privacy conscious acoustic design. Yeah, wait, how does that actually work in practice?

Because in a traditional salon, you hear 10 different conversations and like five different blow dryers all at once. Oh, it's chaotic. Yeah. And people treat their stylists like therapists. So if I'm a professional trying to offer a premium private service, I really don't want this week next door hearing every single word of my client's divorce, you know?

That is exactly why the acoustic design is so vital. It is not just about putting up some thin partition. While the documents don't give away the entire proprietary blueprint, privacy-conscious design in this context typically involves taking the drywall all the way up to the true ceiling rather than just stopping at a shared drop ceiling.

Oh, that makes a huge difference. It does. They're using sound dampening insulation and installing solid doors. It's engineered so that when that door closes, the professional truly has their own in sanctuary. Okay, so beyond just the structural soundproofing, how much can these professionals actually change their space?

Like, if I'm the owner, am I forcing them into a standardized corporate look? Actually, it's the exact opposite. There are specific opportunities for the professionals to personalize their interior. They can change the paint, put up wallpaper, and they can even install upgraded flooring.

Flooring too. Yeah, they can truly make it look like their own boutique brand. That's incredible. Incredible. So let's look at this from the franchisee's perspective for a minute. If you're the owner of this location and you're trying to lease these spaces out, how do you actually explain this setup to a perspective stylist?

Like when you are giving a tour, what are the literal customer purchasing options you are presenting to them? Well, as the owner, you have a highly concrete offering to show during that sweet tour. You're showing them the physical space, the premium equipment that comes with it, the layout of the suite, and you're explaining how the overall location is managed.

The target customers are primarily defined as salon and lifestyle professionals. However, the FDD does allow for independent salon and other business professionals within the approved offering, which gives you a slightly wider net of potential suite licensees to really, you know, curate your neighborhood.

Right. And if you're listening to this and seriously considering the model, I would highly encourage you to imagine going on a a discovery visit with the brand's management. Oh, absolutely. Picture yourself actually walking a location, seeing the physical suite arrangement and talking about the actual businesses operating behind those doors.

Because you need to see how the different services fit together and how they uphold the brand standards. You absolutely have to feel the energy of the space because the energy translates directly to your day-to-day life as an owner. Yeah, time for reality check though.

If I am the franchisee, I am not cutting hair, I'm not doing manicures or providing lifestyle services. No, you're not. So, what is my actual day-to-day business? Am I just playing a game of hands-off commercial real estate where I'm passively collecting rent and just ignoring the building until a pipe bursts?

No, it is far more engaged than passive real estate. The direct, documented activities of the owner revolve around developing and operating the location. You're actively licensing suites, which means you are essentially recruiting and vetting small business owners. Curating the neighborhood, like we said.

Exactly. You want a good mix. You don't want 20 nail technicians and zero hairstylists. You're curating that space. You're handling the local marketing to attract those professionals, managing the administration, and crucially maintaining the operating standards that hold the whole place together. Because if the common areas are a total mess, or the bathrooms are dirty, that reflects poorly on every single independent business inside that building.

Exactly. Exactly. So you really are the mayor of this neighborhood. You're making sure the infrastructure works so your citizens can thrive. But what does a typical morning actually look like? Well let's paint an illustrative morning scene for an owner. You might start your day leading a tour for a prospective sweet customer, walking them through an empty unit and helping them, you know, envision their brand in there.

Then you might field a question or handle a maintenance request from an existing professional. After that, you're reviewing the location's daily operations, checking the financials, and ensuring the facility looks pristine. You are managing relationships and operations, not providing beauty services. Okay, let me push back on the staffing for a second though, because the FDD has some very specific requirements here.

It says the owner or a managing owner is assigned full-time management and direct on-site supervision responsibilities. Yes, it does. But then it also says the location requires either a full-time manager or a part-time site coordinator working at least 25 hours a week.

If I have to hire a manager, why am I also required to provide direct-on-site supervision? Are I just duplicating effort? It is a fair question for sure, but it really comes down to the difference between strategic leadership and daily operational support.

The manager or the site coordinator is there to ensure the facility is running smoothly. Greeting people handling immediate on-the-ground issues. The day-to-day fires. Right. But as the managing owner, your on-site supervision is about the big picture. It's about driving the leasing strategy, maintaining the culture, and ensuring the financial health of the location.

You really can't outsource caring about the people operating inside your building. That makes a lot of sense. It's a business of relationships at its core. And again, this is a great reason to ask company management during your discovery process process, to walk you through exactly how the owner and local staffing roles would fit your specific business plan and, you know, your lifestyle goals.

Absolutely. Understanding the daily management is vital, but before you can manage the neighborhood, you have to build it. Getting the doors open requires turning an empty commercial floor plan into a polished, fully functioning location, which, let's be honest, can be a massive source of anxiety.

Oh, yeah. Building a commercial space from scratch with plumbing, electrical, and permitting is incredibly daunting. It's like playing with adult Legos, but with incredibly high stakes. You need a guide. So how does the franchisor actually help you build this setting so you don't just feel like you're wandering the aisles of a hardware store completely lost?

Well rather than leaving you to figure it out alone, they act like a Sherpa for your commercial real estate climb. They provide highly specific development resources. It starts with site selection criteria and help analyzing the market area and the feasibility of a specific site.

Okay. That's a good start. Yeah. And once you have a location, they provide detailed specifications for the layout, the design, the fixtures, and the equipment. But the most stressful part of any commercial build out has to be dealing with contractors and architects. Does the franchisor step in there?

Yes, they do. They provide contacts for an architect who is already familiar with their specific requirements, as well as designated suppliers. They also offer help recruiting a a contractor and negotiating final bids. Oh, wow. Yeah, that bid negotiation support is huge for managing your initial investment.

Plus, they do a construction visit for the first location just to ensure everything is actually on track. Okay, so they provide the map and the gear for the physical build out, but you still have to learn how to run the business itself. You have an empty, beautiful building, now what?

That is where the operational preparation kicks in. There's initial training for the owner or the managing owner, plus up to two management level employees. This training covers business setup, real estate and construction phases, advertising, and day-to-day operations. This happens at a designated facility or location with additional assistance at your first location right around your opening time.

You know, I noticed in the notes that sweet tours are officially part of this training curriculum, which I found really interesting. They don't just assume you know how to show an empty room, they are actively teaching you how to sell the dream to a stylist.

Because that tour is your primary sales mechanism, it ties the physical building back to the relationship with the stylist. The marketing guidance even covers how to introduce these suites to potential customers during the construction phase. Yes. So you aren't just sitting around waiting until the paint dries to start finding your tenants.

Exactly. And once those professionals move in, the franchisor provides ongoing tech tools to really streamline the operation. There is Gina's platform, which is designed for the owner to manage the overall business and collect rent. Okay. Then there is an affiliates platform that provides the salon professionals themselves with tools for scheduling, processing payments, and messaging their clients.

Having two separate platforms is actually brilliant. It maintains that clear boundary. The owner has a property management tool, and the stylus has a point of sale and booking tool. It really reinforces that these are independent businesses operating at our one roof. Absolutely, and now that we have the blueprint for building the location and the operational tools, it's time to look at the financial realities of actually opening those doors.

Before we get to the final numbers, there is a phrase in the documents that caught my eye, Landlord contributions. It looks like it significantly drops the initial investment cost. For anyone listening who hasn't dealt with commercial real estate before, Why on earth would a commercial landlord pay you to build out your own business?

Right, it sounds counterintuitive. What you're referring to is a tenant improvement allowance, or TI. When you lease a commercial space, it is often just an empty shell with dirt floors. Landlords know that a premium build out, like a high-end salon suite setup, permanently increases the value of their property.

So as part of the lease negotiation, landlords will often contribute a specific dollar amount per square foot toward your construction costs. That's a very common commercial real estate mechanism, but it plays a massive role in shaping your initial budget. With that context in mind, let's get to the bottom line regarding the investment and the reported revenue.

Walk us through the financial passage straight from the source. Based on the May 5, 2025, FDD, the single location estimate before landlord contributions is $721,109 to $2,425,469. After assumed landlord contributions, the adjusted estimate is $721,109 to $1,420,469.

This includes the $52,500 initial franchise fee and three months of additional funds. The project size, build out and negotiated landlord contribution, shape this budget. The additional funds allowance explicitly excludes owner pay, lease charges for property taxes, services, insurance, and maintenance, and specified ongoing marketing and franchise charges regarding revenue.

For 2024, item 19 reports an average annual gross revenue of $474,101 and a median of $425,946 for 134 reporting franchise locations. This eligibility period excluded locations opened in 2023 and 2024. 49 reporting locations, which is 36.6% exceeded the average.

These figures describe gross sales before deductions for that responding group, not owner take home income or the entire system, are franchisee reported and were not independently audited. Individual results may differ, there is no assurance of matching sales. Written substantiation is available on reasonable request.

I really appreciate the extreme clarity of that financial picture. I mean, it shows exactly what kind of capitalization is required to build this neighborhood and what that neighborhood is historically generated for this specific reporting group. Yeah, at least it all out. Yeah. Now, I want to zoom back out from the numbers to the human element for a second.

Okay. So think back to that opening scene we talked about, the independent professional standing in the doorway, holding the keys, imagining their brand new business inside that suite. The possibilities, yeah. Now, I want you to picture what the franchise owner sees in that exact same moment, standing right beside them.

When the owner looks at that scene, they see a place they helped develop from scratch. They see the very beginning of a long-term customer relationship, and most importantly, they see the everyday purpose of their business becoming wonderfully tangibly visible. It's a shared win.

It is a moment of mutual success. And to summarize why this model works, it really rests on three core pillars of Phenix. First, it is a concept shaped directly and authentically by a stylist's real-world experience. Second, it provides individual, customizable spaces for independent professionals to truly own their environment.

And third, it is backed by a robust franchise system that is highly organized around helping you develop and operate those locations efficiently. Consider the unique satisfaction of building a business where your ultimate product is simply providing the perfect setting for other entrepreneurs to thrive.

You are creating the infrastructure for dozens of small business dreams to take off. If this sounds like a next chapter you would enjoy exploring, start a conversation about Phenix Salon Suites. Talk through your background, goals, and the kind of location you could see yourself leading.

You can explore the details with company management and your own advisors as the process moves forward. Visit FranchiseBrokers.com, the presenting sponsor of Franchise Roundtable.