02 May Acquisitions Anonymous: Salon Suite Franchise Review: Is This $2.5M Deal Worth It?
In this episode, the Acquanon team reviews a deal for three salon suite franchises located across the New York Tri-State area. While the concept of a passive, real estate-light business in the beauty industry sounds appealing, the hosts dig deeper into the financials, occupancy risks, personal guarantees on leases, and the high asking price. They break down why the deal, despite some attractive aspects, ultimately didn’t meet their investment criteria.
Key Highlights:
Overview of the salon suite franchise model
Why occupancy is critical to profitability
Risks of relying on weekly-paying, potentially flaky tenants
The hidden dangers of personal guarantees on leases
Why the asking price relative to cash flow made the deal unattractive
Discussion about franchisor support (or lack thereof)
How fixed costs create revenue durability risks
