Blow Dry Bar franchise owners in Australia are sending a warning to opportunity seekers in the United States: be wary of the Cherry Blow Dry Bar franchise opportunity.*
The Blow Dry Bar franchise chain was founded in Sydney in 2008 by Nathan Cuneen and, according to the company website, “quickly grew to more than 23 locations.”
Nathan Cuneen claims that the massive success of Blow Dry Bar in Australia inspired him to offer the Cherry Blow Dry Bar “hair wash and blow drying service” franchise in the United States.
Cuneen has stated that “hundreds of Cherry Blow Dry Bars [are] scheduled to open in coming months across the United States.”
The aggressive development schedule is apparently justified by what Cherry Blow Dry Bar marketing materials claim is a 100% success rate achieved with the concept in Australia..
“Despite the massive growth,” states one company web post dated March 25, 2013, “the chain has had perfect success with franchisees up to this point.”
However, comments from a failed BDB licensee and news that the Bondi Beach franchise recently closed prompted UnhappyFranchisee.Com to ask Australian Blow Dry Bar operators for verification of the claim that all BDB franchisees are successful.
Despite having allegedly received a warning from Cuneen not to communicate with UnhappyFranchisee.Com, a number of Blow Dry Bar franchisees told us a different story.
One stated “He has 21 very desperate… franchisees in Australia who have all lost their life savings.”
When asked whether the blow dry bar concept itself was indeed viable, one owner wrote: “I do believe this could have worked if there was a proper head office in place with proper support, accurate start up costs and much lower franchise fees. What is dragging me down now are the franchise fees and a disaster of a head office…”
None of the franchisees responded with positive comments about their Blow Dry Bar experience, or stated that they were successful.
Here are some of the complaints we received from Blow Dry Bar franchisees in Australia, arranged by subject.
[Be advised that UnhappyFranchisee.Com has not verified the accuracy of these claims, nor necessarily shares the stated opinions. Opinions and statements are those of the commenters alone. The franchisor has the right to submit a rebuttal or clarification for publication here. See disclaimer at the bottom of this post.]
- “Nathan told me that [my Blow Dry Bar franchise] should break even by 4 weeks! I clearly recall during the due diligence process that a recommended amount of working capital for the business was quoted at $10K. This would barely last for a month based on my own experience…”
- “I was quoted the setup cost would be $80,000. This then jumped to $160,000 once I got closer to settlement. After all was signed and done there were more hidden costs demanded. I feel trapped, stressed and now am in a dire financial situation.”
- “I was also given sales figures of other salons which proved to be completely made up. Unbelievably so.”
- “I’ve so far lost more than $100,000 since opening and I’m still running at a loss even though my store has better weekly sales figures than many of the others.”
Lack of Support or Even a Home Office
- “I am very unhappy for many many reasons. The biggest issue for me is that there is absolutely no support or official head office. Staff have come and gone with no real experience or expertise at all. The current staff are only contractors that work out of their lounge rooms and they have absolutely no idea about how to run a small business, let alone a franchise. Nathan Cuneen is nowhere to be seen as he has left for the US…”
- “I paid $35,000 for no support at all. I now pay 9% franchise fee for nothing. I am being bled dry.”
- “Our CEO Claire Bastow has been asked to leave. I have been informed by another employee that this is due to financial reasons. The GM Kirsten Harris is now taking over that role but she really has no idea what is going on.”
- “Claire was asked to leave as MD and Kirsten made MD without any proper handover”
- “Nathan created a website for himself where he talks about his management team in April 2013. Of the management team he mentioned, a few of them are no longer working for him! What he has there is just pure lies.”
- “The previous Operations Manager left early this year… She was still being touted as part of the team for the US operation in April even though she had left long before.”
- “Nathan & Kirsten threaten franchisees about contacting UnhappyFranchisee.Com by saying that they have approached the police and have lawyers standing by to take action against franchisees making ‘slanderous statements.’”
- “The franchise is obviously in very serious trouble so I would have thought he would jump on a plane to discuss this with us but he stays put in the US trying to do the same over there. If he can take time away to forge ahead with Manhattan then he can help the franchisees in Australia that he has left behind. He continues to bleed us dry of finances we don’t have.”
Poor Locations, High Rents
- “Most franchisees were convinced by Nathan to take certain sites. In his words he knew every suburb in Sydney and was a pro at choosing sites. This wasn’t true at all. The sites were pushed on to the franchisees.”
- “Bondi Beach is a small shop in a very bad location and they were being charged extremely high rent. So if you do the maths you would need a lot of blow dries at $40 to cover this and with the amount of chairs it just wasn’t possible. Bondi Beach is also seasonal and has a lot of tourist who will not return. My understanding is that the franchisee closed the doors and walked away. Head office have now taken it over and are trying to get someone else to buy it.”
- “One franchisee was advised to open a kiosk that had 3 or 4 chairs only and a rent of over $130,000. Another is paying $130,000 rent and only making around $3,000 a week turnover [gross sales]. Another I know is paying $100,000 rent and only making around $4000 turnover [gross sales]. These are both in bad locations with exorbitant rent for the sites and both were pushed on franchisees to take.”
- “Most salons are operating at 60% of turnover to wages and over 12% of turnover (if not much more) in products.”
- “The building costs were done by very shonky builders, without a building licence, and at a huge cost.”
- “Head office are very restrictive with what we can do in local area marketing and then only provide us with inane monthly specials. I feel like my hands are tied with growing the business and then they are drowning me with the franchise fee. They really do nothing for it.”
- “Franchisees have asked for our marketing P&L a few times which we have very right to see but have been denied this. I do know that most of our marketing fees go to the marketing teams wages – not to actual marketing.”
Australian Franchisees Are Struggling & Failing
- “He has 21 very desperate and possibly desolate franchisees in Australia who have all lost their life savings, most of whom have young children, and he has not contacted us at all to help us through this.”
- “Currently 1 salon is closing each month and these franchisees are just walking away from their life savings – often more then $200,000 at the end of it all.”
- “So far Bondi, Warringah Mall and Liverpool have closed. Others have indicated they only have a few weeks left.”
- “I am one of the franchisees of Blow Dry Bar in Australia. My salon has been opened for just over [redacted] and unfortunately it has never reached breakeven.”
- “I was told this was a franchise that could be run under management but this is not true. I am now working full time to support the salon and therefore more stressed, financially and emotionally, then I have ever been.”
- “They don’t have the resources to run an ‘Investment Model’ i.e. ‘we appoint the managers and run the business, you just count the money’ which is the basis on which the franchises were sold”
- “The earlier quote of ‘…23 salons in Australia with 19 unhappy franchisees who are sinking in their debts…’ wouldn’t be too far off the mark.
- “My whole experience with Blow Dry Bar has been anything but smooth with constant worry about when and if it will breakeven. What’s left of my investment is to keep doing the right thing (e.g. marketing) hoping things will turn around real soon or I am seriously looking to limit my losses or may look to exit the investment in the near future.”
The Blow Dry Bar franchisees’ message to founder Nathan Cuneen was clear and unequivocal: You should dedicate your energy and resources to fixing the existing BDB system & helping your franchisees in Australia instead of exporting a flawed, unsustainable franchise to America.
So far Mr. Cuneen, who says he is grappling with family health issues, has declined to comment on the questions and issues raised by UnhappyFranchisee.Com.
If Mr. Cuneen would like to provide a rebuttal, clarification or statement we will be happy to publish it. We would also encourage him to alert us to positive steps he is taking to support his franchisees in Australia so we can give credit where credit is due.
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Tags: Blow Dry Bar, Blow Dry Bar franchise, Blow Dry Bar Australia, Cherry Blow Dry Bar, Cherry Blow Dry Bar franchise, Nathan Cuneen, Salon franchise, hair care franchise
*DISCLAIMER: The opinions and statements in this post were made by Blow Dry Bar franchise owners in Australia. These statements have not been verified by UnhappyFranchisee.com or its staff, and the opinions belong to those who made them. As always, use the franchisee opinions and statements as a starting point in your franchise investigation. If you are considering an investment in this franchise, speak to as many franchisees as possible, and address your concerns with the franchisor and an experienced franchise advisor.