Business

Boise-Based Waxing Salon LunchBox Gains Nationwide Traction

By Zach Kyle
The Idaho Statesman.

Debi Lane wasn’t thinking about creating a nationwide brand when she opened LunchBox (A Waxing Salon) four years ago in Downtown Boise. Lane was more concerned with getting people through the door.

The salon served just 65 customers during its first month. Its original location was on the second floor of the Perrault-Fritchman building on Capitol Boulevard. It was Downtown but hard to see, especially because Lane needed a year to jump through the hoops required to post a sign on a historic building.

She worked part-time and had two employees.

“We were a little nervous,” Lane said.

But she had a social trend in her favor. She got a sign with a female figure holding a purse below her navel. Some people connected the sign’s image with the business name, grasped its sexual connotation, smiled and signed up.

Business picked up steadily and has notched month-over-month sales increases ever since, Lane said. The salon brought in $100,000 in revenue in 2011 and expects to surpass $650,000 this year at its new, larger location at 818 W. Idaho St., she said.

“A HAIR-FREE SOCIETY”
More U.S. consumers are paying for waxing services, such as eyebrows for women, chest waxes for men and bikini waxes for both. The personal waxing and nail salon industry — which is broader than wax-only businesses such as LunchBox — grew an average of 7.6 percent annually between 2010 and 2015, according to industry research firm IBISWorld. About 300,000 businesses in the industry brought in about $11 billion in sales in 2014.

“We’re becoming a hair-free society,” Lane said. “This isn’t a fad.”

Lane owned and operated a salon in Sun Valley called TRU starting in 2007, but said her business suffered when the Great Recession took hold because people had less disposable income to spend on the massages, facials and other body services she offered.

Waxing is a part of our culture now, feeling a little bit more pulled together, underneath and on top.
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Patron Laura Tully
But body waxing was recession-proof, with sales growing. Lane said she saw a chance to open a waxing-only salon that could offer 20-minute appointments averaging about $35 per visit that would easily fit on an errand list.

“You can go to Whole Foods, pick up dry cleaning, get a wax. It’s very quick,” Lane said. “That’s why I built a concept salon as opposed to a spa where all services are included.”

Laura Tully, a fashion stylist who lives on the Boise Bench, said she visits LunchBox every four to six weeks to wax just about everything.

Tully, 37, said waxing isn’t new, but grooming standards have changed. Fewer patrons in her generation talk of waxing in hushed tones.

“Waxing has always been there, but the taboo is gone,” she said. “Men are getting waxed. It’s completely accepted, like wearing deodorant.”

Male patronage at the Downtown LunchBox has increased from 5 percent in 2011 to 15 percent today, Lane said. LunchBox plans to expand its line of male waxing services to develop the growth market, Lane said.

“I think women don’t want their men to have hair,” Lane said. “They say 98 percent of men groom, but they did it in the quiet of their own home. Now it’s an acceptable thing, not hidden in the corner.”

PUSH TO FRANCHISE
Lane’s success Downtown spurred her to open a second salon in Eagle. When that turned a profit, she planned to open a LunchBox in Portland and continue expanding on a store-by-store basis, all under her ownership.

After she attended several franchise conferences, Lane said she decided to go that route instead. Under the franchise model, franchisees pay for the rights to operate a business under a corporate flag.

Lane sold the first franchising rights in 2013 for the Eagle salon. The buyer, Pattie Wells, paid $45,000 and moved the salon to a bigger space near the intersection of East McMillan and Eagle roads.

It hurts. But I consider it a good hurt, because I know I’ll feel great afterward. Patron Laura Tully
Franchisees agree to pay a fee and a percentage of their profits. They become part of the franchise product-distribution network and agree to follow a set of standards that include training and business protocols, store appearance and decor, and marketing. Lane’s franchisees must use the LunchBox name and logo.

Lane sold franchises by projecting they would reach annual sales of $337,000 and profits of more than $181,000, based on the Boise store’s 2012 performance.

David Hunt, who teaches marketing at Boise State University, said franchisees look at buying an established brand, and not just its business model.

“For a person starting up new business, brand recognition one of the most difficult things to accomplish, and one of the most expensive things,” he said.

LunchBox salons employ four to six women each. Waxologists, as Lane calls them, can reasonably earn $65,000 per year in wages and commissions, and store managers can make “six figures,” she said.

The company has 15 corporate employees.

MORE EXPANSION
Fourteen salons have opened in Idaho, Oregon, California, Utah, Arizona, Florida and New Jersey. Ten more are preparing to open in eight states. Lane has agreements or is in negotiations with franchisees and potential franchisees to expand to 103 locations. The franchise has been valued at eight figures, Lane said.

Boisean Scott Hatter will soon open his third LunchBox franchise in South Jordan, Utah, to complement stores in Salt Lake City and Park City. Hatter is a longtime owner of franchises, including some in Boise, of Baja Fresh, Burger King, Mrs. Powell’s and Captain Crab’s Take-Away. He said LunchBox’s business model was honed for a new franchise, starting with the branding.
“We just love the marketing possibilities,” he said. “The name is edgy, but in a fun way. We found it gives us a lot of traffic in a new market.”

Lisa D’Onofrio, a registered nurse, opened two LunchBox franchises in Scottsdale, Ariz., and has agreed to open two more. She said the original Scottsdale location is profitable, and the second, which opened in August, expects to be profitable soon.
Franchising is the way to grow something quickly. You rely on the capital of the other owner-operators, and they are committed to the brand because of their investment. Marketing professor David Hunt D’Onofrio said risk comes with buying into a franchise without a long track record, but “there’s also something exciting getting in on the beginning.”
“And the marketing was brilliant. That resonated with me right away,” D’Onofrio said.

Lane hopes to expand to 200 sites in the coming year. She has limited the first planned 103 locations to 14 franchisees, saying the low number will help ensure quality across the brand.

“You’ve probably been to franchises, especially food franchises, where you felt bad for the workers,” Lane said. “I never want people to have that feeling. I want our salons to have a vibe that everybody talks about.”

Hunt said franchising gives Lane the fastest path to growth in fractured market full of mom-and-pop shops.

“It’s basically like what Blockbuster did years ago,” he said. “They saw a market also that was ready for consolidation. It was ripe for a franchise model. Within a very short amount of time, Blockbusters were nationwide.”

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