Phenix Salon Suites
For generations, hair and beauty services were exclusively operated as “commission salons,” where owners collected a percentage of fees paid to stylists. About 30 years ago, the booth rental model began to gain traction, where stylists paid a flat fee to occupy a chair in a salon. Not long after the first booth rental model came into being, the first salon suite concept debuted.
While the salon suite concept behind Phenix Salon Suites is more than three decades old, the popularity of the idea and the speed with which new businesses are entering the marketplace can make it seem like a new innovation. Phenix is one of a select handful of brands that have adopted, refined and deployed this business model to great effect, demonstrating the power and potential of the salon suite concept when executed by salon professionals who know and understand the business.
Today, Phenix is leading the salon suite concept movement in the United States. Salon suites are essentially rental spaces for independent salon professionals, often on a month-to-month basis, effectively eliminating the substantial investment of opening a brand new salon. In Phenix’s case, the suites include all equipment required to launch a salon business with minimal start-up cost, as well as a number of additional services and available extras — including a receptionist that can be provided during peak hours.
Phenix Salon Suites has been phenomenally popular, with extraordinary demand fueling rapid expansion. Co-founders Gina and Jason Rivera opened their first salon suites location in 2007, and had a waiting list for space within just six months. They opened their first expansion in 2009, and made the decision to adopt a franchise model in response to requests from a number of different states around the country. Phenix opened up its first franchise location in 2012 — the first of 26 new locations to open that year. The company has 100 new locations set to open during the next year and a half, and more than 300 locations currently scheduled to come online in the next two to three years.
Such rapid growth is partly attributable to the simplicity and popularity of the concept. The average Phenix Salon Suites location is between 4,000 and 6,000 sq. ft., with 28-30 fully enclosed individual suites inside. Each approximately 100-sq.-ft. private suite is occupied by a salon professional. Because some professionals may choose to share space with a friend or partners, approximately 30-50 salon professionals work out of a single Phenix location, all under the Phenix umbrella.
The salon suite concept eliminates all the hassles of facility management and, most importantly, the prohibitively high startup costs. It also provides individual practitioners with the space and independence they need to operate their own business their own way, reducing or eliminating the professional stresses of working elbow to elbow in crowded and challenging circumstances.
Most importantly, it affords talented and hardworking stylists with an opportunity. Gina Rivera explains that “A stylist’s dream is to open his or her own salon, and this model allows them to do just that — to build their brand, build their clientele and establish themselves in the industry.”
The concept is not just limited to hair stylists, however. Other therapeutic, beauty, and health and wellness services are a natural fit for the salon suite model: Phenix hosts chiropractors, makeup artists, acupuncturists and other specialists.
Jason Rivera says that the salon suites concept has something else going for it: “It is close to recession-resistant.” “As Gina and I like to say, ‘hair always grows,’ and it’s not the kind of business that will ever be replaced by an iPhone app or impacted by online retail.” Rivera cites the brand’s strong performance even during the recession of 2008-2009 as evidence of its resilience.
The Phenix management team attributes much of their success to the intimate familiarity they have with the industry. Fundamentally, Phenix Salon Suites is not about renting out suites, it is about high-quality salon work. Unlike many other salon suite concepts that are owned and operated by business people, Phenix has been built by true members of the “Salon Community.” Hair styling is literally a family tradition: company Founder Gina Rivera boasts 20 different hair stylists in the family, a legacy that goes back nearly a century to the 1920s. In fact, Gina herself still works in a suite several days a week as a Hair Dresser. Consequently, the Phenix team not only understands the financial dynamics and the operational nuances of running a salon, they are intimately familiar with the preferences, priorities and daily demands of salon professionals.
On the surface, it is straightforward, but the nuts and bolts can be a little trickier and require some nuanced management savvy. In addition to a wide range of products and services, Phenix offers a number of educational platforms and special opportunities that stylists can take advantage of in case of illness or unforeseen circumstances. Unlike their competitors, Phenix is positioned to provide management oversight/guidance, even providing a receptionist and other support staff.
From a real estate perspective, Phenix prioritizes grocery or drug store-anchored centers, with quality access visibility and parking. “Safety is our number one consideration, however,” said Robert Aertker, national broker for Phenix Salon Suites. “If it isn’t safe, nothing else matters.”
As for market dynamics, the Phenix team is primarily attracted to markets with a strong existing base of salon and hair and beauty services, commented Sara Martin, senior associate with X Team International partner Welsh Companies and Minneapolis broker for Phenix. “The Phenix concept is extremely attractive to perspective landlords, as mature locations with a full roster of stylists bring in 4,000 to 5,000 customers a month — very strong customer traffic, especially relative to the square footage.”
The salon suites concept has taken off in recent years, becoming more mainstream, and more popular. It’s clear that Phenix Salon Suites has a lot to do with that growth.