How to Finance a Sola Salon Studios Franchise: Build-Out Costs
By Chris Cornella
A Sola Salon Studios franchise loan finances something closer to a small commercial real estate project than a typical service business. A Sola owner leases a large space, builds it out into individual salon studios and rents those studios to independent beauty professionals, so the money goes mostly into construction, finishes and the months it takes to fill the studios.
Two facts shape the financing from the start. The franchisor asks for $1.5 million in net worth and $500,000 in liquid capital, and the SBA Franchise Directory limits the brand to SBA Disaster Assistance loans. This article explains what that means and how owners typically structure a deal.
US Professional Funding is not affiliated with, sponsored by or endorsed by Sola Salon Studios; the name is used only to describe the business. Figures from the franchisor’s disclosure document can change, loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice; review the current Franchise Disclosure Document (FDD) and franchise agreement with a franchise attorney and an accountant.
Sola Salon Studios Franchise Loan at a Glance
- Franchisor: Sola Franchise, LLC, based in Lakewood, Colorado.
- Founded: 2004, with its first location in Denver, according to the company.
- System size: more than 700 locations nationwide and over 20,000 beauty professionals, according to the company’s website.
- Typical location: the franchisor describes franchise build-outs of 4,500 to 6,500 square feet with 25 to 50 fully equipped studios.
- Candidate requirements: $1.5 million minimum net worth and $500,000 minimum liquid assets; no beauty industry experience required.
- Fees and investment: the franchise fee, royalty, marketing fund and Item 7 investment range were not published on the franchisor’s pages reviewed; get them from the current FDD.
- SBA Franchise Directory: listed as Sola Salon Studios, with a note that the brand is only eligible for SBA Disaster Assistance loans.
What Is Sola Salon Studios?
Sola Salon Studios was founded in 2004 in Denver. Each location is a collective of private, move-in-ready salon studios under one roof, rented to independent hair stylists, estheticians, nail technicians and other beauty professionals who run their own businesses.
The model. The company describes its franchise as a relatively simple, real estate-based model. The franchise owner does not cut hair or manage a team of stylists. Instead, the owner leases the building, completes the build-out, rents studios to professionals and keeps the space full, clean and well run. That is why the franchisor says franchise ownership experience is a plus but beauty industry experience is not required.
The studios. According to the company, studios include high-end cabinetry, floor-to-ceiling walls with sliding glass doors, Wi-Fi and utilities, so a professional can move in with their own tools and clients.
Why lenders view it the way they do. Lenders see a large system, a recognizable brand among beauty professionals and revenue that comes from studio rents rather than from individual services. They also see a heavy up-front build-out, a long lease and a lease-up period during which the location carries its full rent before most studios are occupied. The financing plan has to cover that gap.
Sola Salon Studios Franchise Costs
The franchisor’s public pages do not publish the franchise fee or the Item 7 estimated initial investment, so every figure in your budget should come from the current FDD, your landlord and your contractor.
Initial franchise fee. Item 5 of the FDD sets the initial fee and any multi-unit or development fees. Confirm when it is due and whether any portion is refundable.
Lease and build-out. With 4,500 to 6,500 square feet divided into 25 to 50 studios, the build-out is the largest cost. It includes demising walls, glass doors, plumbing for shampoo bowls in each studio, electrical capacity, HVAC, lighting, flooring, common areas and restrooms. Landlord tenant improvement allowances can offset part of it, which is why lease negotiation matters to the loan.
Studio equipment and furnishings. Styling chairs, shampoo bowls, cabinetry, mirrors and common-area furniture are often supplied by the owner as part of the move-in-ready studio.
Technology and signage. Access control, security cameras, Wi-Fi, exterior signage and the brand’s booking and management tools add to the budget.
Opening costs and working capital. Pre-opening marketing to recruit professionals, rent during construction, insurance, utilities and cash to cover the lease-up period all belong here.
Total investment. When you review Item 7, organize your Sola Salon Studios franchise loan request around these categories:
- Initial franchise fee (Item 5)
- Security deposit and rent during construction
- Leasehold improvements and construction
- Studio equipment, cabinetry and furnishings
- Signage, security and technology systems
- Grand opening and professional recruitment marketing
- Additional funds and working capital for the period the FDD specifies
Add a contingency for construction, because older buildings often need plumbing and electrical upgrades that only show up once work begins.
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD lists the royalty, marketing fund contribution, technology fees and other recurring charges. Ask how each one is calculated, because a fee based on rent collected behaves differently from a flat monthly charge during lease-up.
Royalty and marketing. These come out of studio rent before the owner pays the landlord, utilities and debt service, so lenders deduct them when they calculate cash flow available to repay a Sola Salon Studios franchise loan.
Occupancy costs. Base rent, common area charges, utilities and repairs are the largest ongoing expenses, and many are fixed whether studios are full or not.
Remodel and refresh. Review the franchise agreement for any refresh or remodel obligations and budget for replacing chairs, finishes and common-area items over the life of the lease.
How lenders factor these in. Lenders model studio occupancy month by month, apply fees and fixed costs, and test whether the location can cover debt payments at realistic occupancy rather than full occupancy.
Franchisor Requirements for New Owners
The franchisor states these requirements on its own franchising pages:
- Net worth: a minimum of $1.5 million.
- Liquidity: a minimum of $500,000 in liquid assets.
- Experience: franchise ownership experience is a plus; beauty industry experience is not required.
The approval process. The franchisor’s site directs candidates to submit an inquiry, after which its franchise development team follows up. Expect discovery conversations, a review of the FDD, a financial qualification review and, once approved, market analysis and site selection support. Lenders usually want to see the signed franchise agreement and an approved site before closing.
Why the liquidity requirement matters for financing. Because SBA business loans are not available for this brand, conventional lenders typically expect meaningful equity in the project. The franchisor’s liquidity threshold helps ensure owners can fund that equity and still carry reserves through lease-up. Our article on how much franchise you can afford walks through the math.
Ways to Own a Sola Salon Studios
A new location. Most owners open a new location: securing a site, signing a lease, building out the studios and recruiting professionals. Lenders underwrite the construction budget, the lease and a lease-up projection. See our franchise start-up financing options.
Buying an existing location. Existing Sola locations change hands when owners sell, subject to franchisor approval of the transfer. A resale gives the buyer a rent roll and operating history to underwrite, which lenders generally prefer to projections. Read our guide to buying a franchise resale.
Multiple locations. The franchisor promotes multi-unit ownership, and many owners build several locations in one market. Development schedules and the financing of each location are covered below.
Financing Options for a Sola Salon Studios Franchise
Conventional term loans. With SBA business loans off the table, conventional business loans are usually the core of a Sola financing plan. Lenders look at the owner’s net worth and liquidity, the lease, the build-out budget and the lease-up projection. Our conventional loan calculator can help with early planning.
Equipment financing. Styling chairs, shampoo bowls, cabinetry and security systems can often be financed separately from the build-out, preserving cash for construction and reserves. Explore our franchise equipment financing and leasing options.
Working capital and lines of credit. The months between opening and stable occupancy are the most cash-intensive stage of a Sola location. A line of credit or working capital loan can cover rent, marketing and payroll for any on-site staff during lease-up. See our franchise working capital page.
Real estate financing. Most Sola locations lease their space, but an owner who buys a building for a location may finance the property with a commercial real estate loan. Our page on franchise real estate and expansion financing covers that route.
Seller financing on resales. A seller may carry part of the price when an existing location is sold. A seller note is typically subordinate to the senior loan, and lenders may limit its terms.
Owner equity. Given the franchisor’s liquidity threshold and the conventional lending route, owner equity is a central piece of nearly every Sola deal.
SBA Loans for Sola Salon Studios Franchisees
SBA-backed business loans are only available to franchisees of brands the SBA has found eligible. Lenders check the SBA Franchise Directory to see whether a brand is listed and whether any notes apply. Our article on the SBA Franchise Directory explains how the listings work.
The brand’s directory listing. Sola Salon Studios appears on the SBA Franchise Directory with a note stating that the brand is only eligible for SBA Disaster Assistance loans.
What that note means in plain English. A Sola Salon Studios franchisee cannot use SBA 7(a) or SBA 504 loans to open or buy a location. SBA Disaster Assistance loans are a separate program that helps businesses recover from declared disasters; they are not a way to fund a new location. Listings can change, so confirm the current entry when you apply, but plan your Sola Salon Studios franchise loan around conventional financing and equity.
What to do instead. Build a lender package around your personal financial strength, a well-negotiated lease, a detailed construction budget and a conservative lease-up plan. Strong liquidity and experience owning other businesses carry real weight with conventional lenders.
How Lenders Evaluate a Sola Salon Studios Deal
Personal credit and financial history. Lenders review credit reports, tax returns and personal financial statements for each owner who will guarantee the loan.
Net worth and liquidity. Lenders compare your assets with the project cost and look for reserves left after closing. Meeting the franchisor’s thresholds is a starting point, not a guarantee of loan approval.
Management and business experience. Because the owner manages a property and a community of tenants rather than performing services, lenders value experience in real estate, multi-unit operations or prior franchise ownership. Owners who plan a semi-absentee role should explain who will handle leasing, maintenance and professional relations day to day. Our article on semi-absentee franchise financing covers how lenders view that setup.
Business plan and projections. Projections should show the number of studios, the rent per studio in your market, a month-by-month lease-up schedule, turnover among professionals, occupancy costs and every fee in Item 6.
The FDD and franchise agreement. Lenders review the term, renewal, transfer and termination provisions, and they want the franchise term to line up with the lease and the loan. Check Item 10 for any franchisor financing and Item 19 for whether the FDD includes financial performance representations.
The site and lease. The lease is one of the most important documents in a Sola deal. Lenders look at the term and renewal options, rent escalations, tenant improvement allowances and whether the landlord will sign a collateral access agreement. Our article on signing a lease before loan approval explains the timing risks.
Historical financials for resales. For an existing location, expect to provide the rent roll, occupancy history, several years of profit and loss statements and tax returns.
The Build-Out and Lease-Up Deep Dive
Construction. Each studio is essentially a small finished room with its own plumbing, lighting and electrical needs. Multiply that by 25 to 50 studios and the build-out becomes the defining cost of the project. Get detailed contractor bids, confirm the franchisor’s design requirements and add contingency.
Lease-up. A new location opens with few or no studios rented and fills over time as professionals move in. Lenders want to see how many months of reserves you have and what happens if leasing runs slower than planned.
Tenant relationships. The professionals who rent studios are your customers, and retention drives occupancy and your ability to repay debt.
Multi-Unit Growth and Development Agreements
Multi-unit ownership is common in salon studio franchising, and the franchisor actively promotes it. A development agreement typically commits the owner to open a set number of locations on a schedule, which means the financing plan has to reach beyond the first location.
Financing the next location. Lenders generally want to see the first location reach stable occupancy before financing the second. Owners often use cash flow and equity from the first location, along with a new conventional loan and equipment financing, to fund the next build-out. Our article on multi-unit franchise financing explains how lenders look at a growing portfolio.
Real-World Scenarios
A business owner diversifying into real estate-based franchising. An owner of an established company meets the net worth and liquidity thresholds, signs a long-term lease with a tenant improvement allowance and uses a conventional term loan plus equipment financing for the build-out.
A buyer acquiring an occupied location. A buyer purchases an existing Sola location with an established rent roll. The lender underwrites historical results, and the seller carries a small subordinated note.
A multi-unit developer adding a second site. After the first location reaches stable occupancy, the owner uses retained cash flow and a new conventional loan to open a second location in a nearby suburb.
Common Mistakes to Avoid
- Planning on an SBA 7(a) or SBA 504 loan for a brand limited to SBA Disaster Assistance loans
- Signing a lease before financing is lined up
- Projecting full occupancy from the first month
- Underestimating plumbing and electrical work in the build-out
- Spending liquidity on construction and leaving no reserves for lease-up
- Overlooking fixed occupancy costs that continue whether studios are rented or not
For more pitfalls, read our article on franchise loan mistakes.
Next Steps to Finance Your Sola Salon Studios Franchise
Step 1: Confirm you meet the thresholds. Compare your net worth and liquid assets with the franchisor’s $1.5 million and $500,000 minimums.
Step 2: Review the FDD. Study Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 3: Talk to a financing specialist early. Map out a conventional financing plan before you commit to a site.
Step 4: Find and negotiate the site. Work with the franchisor on site selection and negotiate tenant improvements and lease terms that support the loan.
Step 5: Build the budget and projections. Combine contractor bids, Item 7 categories and a month-by-month lease-up plan.
Step 6: Assemble the lender package. Gather tax returns, financial statements, the franchise agreement, the lease, the construction budget and projections.
Step 7: Close, build and recruit. Close the loan, complete construction and start recruiting professionals well before opening.
Sola Salon Studios Franchise Loan FAQs
How much does a Sola Salon Studios franchise cost?
The franchisor’s public pages do not list the total investment. The current FDD’s Item 7 table gives the estimated range, and the build-out of a 4,500 to 6,500 square foot space is usually the largest piece.
How much net worth and liquid capital do I need?
The franchisor lists a minimum net worth of $1.5 million and minimum liquid assets of $500,000.
Can I get an SBA loan for a Sola Salon Studios franchise?
Not for opening or buying a location. The SBA Franchise Directory notes that the brand is only eligible for SBA Disaster Assistance loans, so owners typically use conventional financing.
What is the franchise fee and royalty?
They were not published on the franchisor’s pages reviewed for this article. Items 5 and 6 of the current FDD list the initial fee, royalty and other recurring fees.
Do I need salon experience?
No. The franchisor says beauty industry experience is not required, while franchise ownership experience is a plus.
Can I finance the studio equipment separately?
Often, yes. Chairs, shampoo bowls, cabinetry and security systems can sometimes be financed with equipment loans or leases, subject to the senior lender’s approval.
Can I buy an existing Sola location?
Yes, when an owner sells and the franchisor approves the transfer. Lenders underwrite a resale on its rent roll and financial history.
Can I own more than one location?
Yes. The franchisor promotes multi-unit ownership, and lenders usually want the first location stable before financing the next.
Does Sola offer financing?
Check Item 10 of the current FDD for any financing offered by the franchisor or its affiliates. Most owners arrange outside financing.
How long is the franchise agreement?
Item 17 of the current FDD sets out the term, renewal and transfer conditions. Align the franchise term with your lease and loan.
What documents will lenders ask for?
Expect personal tax returns and financial statements, the franchise agreement and FDD, the lease or letter of intent, the construction budget, a lease-up projection and a business plan.
Does the FDD include financial performance information?
Review Item 19 of the current FDD to see whether it includes financial performance representations, and build your projections from local studio rents and occupancy.
Final Thoughts
A Sola Salon Studios franchise loan rests on three things: the owner’s financial strength, a well-negotiated lease and a realistic lease-up plan. Because the brand is limited to SBA Disaster Assistance loans, the best-prepared owners plan around conventional financing, equipment financing and solid reserves from the beginning.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Explore our franchise financing solutions.
