Investment Prospectus in Blo/Out – Blow Dry Bar
Market Information
A blowout, or the process of having one's hair blown dry, began as the finishing touch to a haircut before becoming a
service in its own right. Traditional salons still offer blowouts, but often price is based on hair length or thickness
averaging at $55.00 at a traditional high-­‐end salon.
The trend comes as the hair salon industry is struggling. Consumers are stretching out the time between haircuts and cutting
back on higher-­‐priced—and higher profit—services such as coloring and permanent straightening treatments, says Caitlin
Moldvay, industry research analyst at market research firm IBISWorld. Revenue from hair salons has slipped 0.3% each year
for the last five years to an estimated $34.9 billion this year, according to IBISWorld.
The Blow Dry Bar concept has standardized the process. At a standardized charge of about $35 for a blowout, several describe
it as an "affordable luxury." The trendy new concept offers a standard of about a half dozen styles, from stick straight to beachy
waves to voluminous curls.
The salons aim for convenience, with hours seven days a week, some as early as 7 a.m. and as late as 9 p.m. Most
feature girlish décor, with chick flicks on big-­‐screen televisions, and offer clients a free drink, including wine or
champagne. Customers can make appointments but not with a specific stylist.
Wall Street Journal: http://online.wsj.com/article/SB10001424052970204831304576595322366093848.html
Competition
Blo, which began in Vancouver in 2007 and now has 16 locations, and Los Angeles-­‐based Drybar, which debuted in early
2010 and just opened its 10th location, in New York, this month are the two largest competitors in the Blow Bar industry.
However, with the inflexibility of a franchise model, Blo/Out has the opportunity to compete in numerous ways including but
not limited to: offering additional services, offering prolonged hours, offering travel services for weddings and events.
Drybar, the barely two-­‐year-­‐old "blow-­‐dry-­‐only" start-­‐up, has closed a $16 million investment from Boston-­‐based
private equity fund Castanea Partners. Drybar broke even on sales of $1 million in its first 10 months, according to a
2011 Inc. profile.
Other competition can come from existing salons that currently offer the service at a premium. They may reduce their
pricing but they will never concentrate on marketing the service, nor will they be known as specialists in that category. We
all know that it’s better to be great in one thing than mediocre in many.
Blo/Out – Blow Dry Bar
Blo/Out Blow Dry Bar’s first location is located in Huntingdon Valley, PA:
Huntingdon Valley, PA is located in between Philadelphia County, Montgomery County and Bucks County.
Huntingdon Valley traffic generates from Northeast Philadelphia, Southampton, Northampton, Holland, Richboro,
Feasterville, Lower Moreland, Upper Moreland and Hatboro.
Blo/Out has tremendous advantage in part due to our ownership of the domain name www.BloOut.com as well as the
trademark for Blo Out Blow Dry Bar.
Blo/Out’s marketing methods rely heavily on public relations generated by momentum the trend currently has along with the
fact that we are first to market in the local Philadelphia area. Targeted press releases along with local content will be regularly
provided to local and regional media. Blo/Out relies heavily on social networking and is in the process of producing and
distributing a “Reality” show called “BLO/OFF” where contestants will compete for a position with Blo/Out in the same
method used on other reality shows such as “CHOPPED” and “Survivor”. The winner will be chosen by a group of judges based
on quality, style, and creativity and will be give a Blow Dryer as a sign of winning and welcomed to the team. The “losers” will
be voted off the show and will not be offered a position with Blo/Out. The show will be produced and distributed weekly
allowing for strong public relations (“Are you good with hair? How about competing for a great job in a great environment!”),
social media interaction and viewers, and finally local buzz creation and word of mouth propagation.
Given the heavy reliance on public relations and media, Avi Shenkar the founder and managing member of Blo/Out is the
perfect individual given his successful history managing PR campaigns and being covered by medias such as: Miami Herald,
New York Times, CNN, ABC, Parenting Magazine, Mashable.com and numerous other medias.
Blo/Out Blow Dry Bar has taken the Philadelphia area’s media by storm with a 2 page spread in Philadelphia Style Magazine,
stories in Philadelphia Weekly, Metro Magazine, Action News, FYI Philly and many other medias. Fast social media growth and
wildfire like word of mouth has allowed Blo/Out’s first location in Huntingdon Valley to be cash flow positive within it’s first 30
days.
Blo/Out Blow Dry Bar’s key to success is our awesome team of professional stylists and management team. Our high rate of
employee retention is due in part to our proprietary compensation package and empowering management style.
Offering
Blo/Out – Blow Dry Bar is seeking investors and is offering per location ownership opportunities at a cost of $2,500.00 per
share. Each share equals 1.00% of the location specific corporation out of 100.00%. With 40.00% to be sold, the remaining
60.00% will be owned by Blo Out LLC the creator and driving force behind the concept and the operational partner
responsible for 100% of the daily operations and the success of Blo/Out. Investors are not required to participate in the
creation, operation or management of Blo/Out in any way. Blo/Out will in no way require any contribution of time or effort of
any investors.
Payout
Blo/Out will not pay dividends for the initial 120 days to allow for re-­‐investment of all generated income. Shareholder
distribution will not be taken during this period unless the generated cash flow allows it. If the generated income during
the initial 120 days is sufficient to allow for re-­‐investment, operations, reserve and dividends, then payout will be
provided. Payout will be distributed by number of shares owned (i.e. $3,000.00 generated post operations and reserve will
be distributed as $30 per share). Based on projections complete recuperation of initial investment will be me within
approximately 14 months from the date payouts began.
Exit Strategy
Blo/Out is planning on opening numerous locations serving both suburban and city clientele. We are also diligently working
on the franchise business model allowing a national/international reach beyond our own abilities. An exit in the form of sale
is not planned but will be considered if proposed.
Individual investor exit will be allowed after a vesting period of 18 months. Blo/Out Corp. may repurchase shares at market
rate. Blo/Out Corp must approve Sale of shares to investors other than original investors.
“ That’s right, friends: there is a new kind of bar in town and this one won’t leave you
feeling like you got hit by a truck the next morning, either. Instead, this bar will have
you looking and feeling
fabulous.“
“ …I'm a little too excited for Blo/Out, the first blow dry bar to hit the Philly area
…Thanks to some wonder products and serious round-brush skills, even my hair clocked
in around the target mark of 35 minutes … I was hooked.
Financial Information
Income / Expense
Income Generation
Per Head
Per Day
8 Stylists Per Day
Per Month
Per Stylist
$35.00
$350.00
$2,800.00
$78,400.00
Gross Income:
$23.76
$233.88
$1,866.73
$51,780.00
*Numbers are based on weekly average with 28 days per month and 1 client per hour in a 10-­‐hour working day
** Expenses are proprietary information therefore blacked out
Monthly Growth 1
The chart above shows the monthly growth of clients, gross sales and net revenue from month one (1) to
month 24. Given a 15% growth rate per month in Blow Dry services (not including other services or events) by
the end of the first year Blo/Out is expecting approximate monthly net revenue of $20,000.
Q&A
●
What am I actually buying?
o
You are purchasing equity in the form of shares of the individual Blo/Out location and not of the Blo Out
Corporation.
●
Am I also going on the individual location’s bank account?
o
●
No, the bank account is managed by Blo Out LLC.
Can I be an active partner in Blo/Out?
o
Possibly, if you can contribute in the form of time, effort or resources your participation will be
considered. However, as an active partner you are required to be fully committed to Blo/Out.
●
Can I run my own Blo/Out location?
o
Yes, we are currently working on the franchise model for Blo/Out and will be offering it as soon as we are
ready.
●
As an investor do I get access to the individual location’s financial books?
o
Yes. All financial documents, A/R and forecasts will be available to all investors on regularly scheduled
dates and board meetings.
●
As an investor do I ever have to pay for services for anyone I send over?
o
To keep it fair we will require every investor, family member, spouse or anyone else to pay the
minimum cost for services provided (i.e. the stylists commission & tip).
●
Can I ever purchase more shares?
o
You may purchase additional shares in the future from the corporation if there are remaining or from any
other investor at current market value or any amount as request by selling party.
●
What happens if Blo/Out goes out of business?
o
If Blo/Out ends its operations, all assets will be liquidated and all proceeds will be distributed to investors
as per share ownership. Blo Out Limited Liability Corporation will be personally liable for any unrecovered
funds.
Disclaimer:
The information provided on or within this website or in documents available herein is for assistance only and is not
intended to be and must not be taken alone as the basis for an investment decision. Each recipient of this information
should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the
offering offered hereby, and should consult its own legal counsel and financial, accounting, regulatory and tax advisors
to determine the consequences of such an investment. The offering offered hereby has not been and will not be
registered under the Securities Act of 1933, as amended, or the offering laws of any state or any other jurisdiction,
and are being offered and sold in reliance upon exemptions from the registration requirements of the Securities Act
and such laws. In addition, the Partnership will not be registered as an investment company under the Investment
Company Act of 1940, as amended. The offering offered have not been approved or disapproved by the offering
authority of any state or any other jurisdiction, or the Offering and Exchange Commission of the United States, nor has
any other authority or commission passed upon or endorsed the merits of this offering or the accuracy or adequacy of
any supporting documents. Any representation to the contrary is unlawful. The offering being offered is suitable only
for sophisticated Investors for whom an investment in the offering does not constitute a complete investment
program and who fully understand, are willing to assume, and who have the financial resources necessary to
withstand, the risks involved in an investment in the Partnership.