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Seva Beauty Franchise Cost & Fees

Date of Incorporation: 2010
Franchising Since: 2010
Headquarters: Highland Park, Illinois

Business Description: Seva Beauty, LLC is the franchisor. Seva Studios offer consistent, affordable, high-quality fast-casual esthetic spa services and a limited set of retail products designated by Seva for men and women in a distinctive retail environment. Seva has two main business formats, Seva Express and Seva Spa. A Seva Express is a quick-serve format offering its “Brows and Face” category of services, while Seva Spa is a larger, full-service format offering the Brows and Face category of services as well as spa services.

Franchise Offer: The franchisor grants qualified franchisees the right to operate a fast-casual esthetic spa business using the trade name Seva as well as its business models and system.

Financial Assistance: The franchisor does not offer direct or indirect financing. It does not guarantee a franchisee’s note, lease or any other obligation. The franchisor does not have any agents or affiliates who offer financing directly or indirectly to franchisees. The franchisor has complied with the eligibility requirements of the SBA’s Franchise Registry Program and has been approved for participation. Accordingly, Seva franchisees who apply for SBA loans may receive a benefit of a streamlined loan application process.

Training and Assistance: Initial Training is conducted at the franchisor’s corporate office in Highland Park, Illinois, in an online environment via webinar, at another location or locations it designates, and/ or a combination of the above and at such times as it designates. Franchisees, if they are an individual, or a majority owner (the “Named Partner”), if the franchisee is an entity, and a manager designated by the franchisee (“Business Manager”) are required to attend and complete the training to the franchisor’s satisfaction before the studio opens. The current initial training program, which is subject to modification at any time, requires the franchisee’s training team to attend and complete a ½ day training session at corporate offices, a ½ day training session at a Studio location designated by the franchisor and two days of virtual training. In addition to the training, one or more representatives from an approved spa vendor may provide approximately five or more hours of training relating to facials and related goods and services. Franchisees and their associates may be required to attend additional training meetings and refresher courses including periodic webinars, video conferences, and virtual hands-on instructional courses via Seva Academy and that may take place from time-to-time at Seva corporate offices, online, or at another location it designates.

Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that it may control. Franchisees may also face competition from competing salons and spas located within the same retail location as the studio (such as a nail salon or hair salon that offers competing services). However, the franchisor will not locate another corporate or franchise Seva Studio within the same retail location as the franchisee’s Studio.

Term of Agreement and Renewal: The length of the initial franchise term is 5 years from store opening. If franchisees are in good standing and meet other requirements, they can add an additional 5-year term.

Obligations and Restrictions: Franchisees must designate one of the owners as the “Named Partner.” The Named Partner must hold at least a 25% ownership interest in the franchise or the franchise entity (if the franchise is owned by an entity) and successfully complete the initial training program and any other training programs deemed appropriate. Franchisees must also designate a “Business Manager” of the Seva Studio. Franchisees must offer all of the products and services that the franchisor designates are part of the Seva System, and nothing else, except with its prior written approval.

Estimated Number of Units: 139

Investment Tables:
Initial Investment for Seva Express
Name of Fee Low High
Initial Franchise Fee $39,000 $39,000
Leasehold Administration Fee $15,000 $15,000
Pre-Opening Administration Fee $10,000 $10,000
Training $0 $2,000
Real Estate Improvements/Spa in a Box $10,000 $40,000
Fixtures, Equipment and Furniture $10,000 $40,000
Rent $550 $2,800
Security Deposit $25,000 $25,000
Computer System $2,000 $4,000
Grand Opening Promotion $1,500 $3,000
Opening Inventory $2,000 $4,000
Insurance Premiums $1,000 $4,000
Additional Funds - 3 to 6 months $24,000 $46,000
Estimated Total $140,050 $234,800
Initial Investment for Seva Spa
Name of Fee Low High
Initial Franchise Fee $39,000 $39,000
Leasehold Administration Fee $0 $15,000
Pre-Opening Administration Fee $10,000 $10,000
Training $0 $2,000
Real Estate Improvements/Spa in a Box $10,000 $60,000
Fixtures, Equipment and Furniture $10,000 $60,000
Rent $2,000 $6,000
Security Deposit $6,000 $18,000
Computer System $2,000 $5,000
Grand Opening Promotion $1,500 $3,000
Opening Inventory $2,000 $8,000
Insurance Premiums $1,000 $4,000
Additional Funds - 3 to 6 months $24,000 $46,000
Estimated Total $107,500 $276,000
Other Fees
Type of Fee Amount
Royalty 6% of Gross Sales or $250 per week, whichever is greater. If the franchisee fails to meet the minimum required Gross Sales in a 12-month period, the franchisor may require the franchisee to pay a total royalty of 6% of the minimum Gross Sales.
Brand Fund Contribution 2% to 5% of Gross Sales.
Late Fees $100 per instance.
Interest 18% per annum of balance due or highest commercial contract interest rate law allows, but not less than $100
Initial Training for Additional or Replacement Manager The then-current training fee per person, plus expenses. The current rate charged for ongoing training is $1,000 per person.
Additional Training/Support As determined by the franchisor. It may charge an hourly rate, or a flat fee (including a virtual training fee) for the additional training/support services. Currently, the hourly rate is $150 per hour.

 

Additional On-Site Assistance $200 per day plus transportation and lodging.
Transfer Fee (Franchise Agreement) $19,500
Transfer Fee (Multi-Unit Operator Agreement) $10,000
Renewal Fee 25% of then-current initial franchise fee.
Indemnification and Defense Will vary under circumstances.
Audit Cost of audit, 15% of underpayment, plus 18% interest from date of underpayment.
Insurance The actual costs of insurance for the period of coverage, plus a service charge equal to 25% of the cost of new required insurance for the period of coverage.
Seva University Certification Fee Up to $250 per lead technician.
Inoperative Equipment Fee $100 per day.
Conventions or Franchisee Meetings Up to $1,000
Finance Approval Fee $500 per instance.
Third Party Costs Will vary under circumstances.
Entity Conversion Fee $500 per instance.
Indemnification and Defense Will vary under circumstances.
Costs and Attorney's Fees Will vary under circumstances.
Gift Card Program Will vary. The franchisor does not currently charge a fee for participation in the Gift Card Program.
Customer Satisfaction Evaluations ("Mystery Shops") Up to $100 per month.
Lease Acceleration Fee Will vary.
Liquidated Damages Aggregate Royalty Fees and Brand Fund contributions due to the franchisor during the 36 month period immediately preceding termination.

The above information has been taken from the FDD of Seva Beauty. Year of FDD: 2016

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