House Of Colour Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$26,945 - $45,700
Franchise Fee
$10,000
Total US Locations
266
Business Summary
House of Colour businesses offer personal stylist, image consultant, and color analysis services, along with related products, to the general public. These services are provided both in-person and online within a defined territory. Franchisees can operate their business from home or choose to rent a commercial retail space.
Corporate History
House of Colour USA, Inc. (HOC) was established as a Virginia corporation on May 11, 2016, with its principal place of business in London, United Kingdom. It began offering franchises for House of Colour Businesses in June 2016. HOC's corporate parent, House of Colour International Ltd (HOCi), a UK limited company formed in 2008, owns the intellectual property and trademarks for the House of Colour franchise system and licenses them to HOC. Prior to May 1, 2020, an affiliate, House of Colour, Ltd. (UK Affiliate), held and licensed the intellectual property. The UK Affiliate has offered House of Colour franchises in the UK and other countries since 1985. From April 2010 to April 2016, the UK Affiliate also offered license agreements to individuals in the UK to operate similar businesses, but these have since ceased operations or converted to franchises.
Financial Overview
Investment Range
$26,945 - $45,700
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$24,500
Royalty %
4%
Equipment Costs (Low)
$500
Equipment Costs (High)
$2,750
Working Capital
$1,923
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
House of Colour USA, Inc. has audited financial statements as of April 30, 2024, April 30, 2023, and April 30, 2022, which received an unqualified opinion from independent auditors. This indicates that House of Colour's financial statements are presented fairly in all material respects and there are no reported concerns about its ability to continue operations.
Financing Details
House of Colour does not offer any direct or indirect financing to franchisees, nor does it guarantee any notes, leases, or obligations for its franchisees.
Performance Metrics
Total US Locations
266
Franchised Units
266
Corporate Units
0
Franchising Since
2016
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
House of Colour has no litigation required to be disclosed in Item 3 of its Franchise Disclosure Document. This means House of Colour has not been involved in any material litigation in the last three fiscal years.
Bankruptcy History
House of Colour has no bankruptcy history to disclose in Item 4 of its Franchise Disclosure Document, indicating that neither the franchisor nor its executives have filed for bankruptcy.
Agreement Terms
Initial Term
5 years
Renewal Term
3 years
Renewal Conditions
To renew their franchise agreement, House of Colour franchisees must provide written notice of their intent to renew within 120 to 180 days before the current term expires. They must ensure their business is updated to current System standards, be in good standing with no defaults, and have paid all financial obligations. Franchisees are also required to sign House of Colour's then-current franchise agreement and any related documents, including a general release of claims. They must also meet current qualification and training requirements and pay a renewal fee of $750. The terms and conditions of the new agreement may be materially different from their initial contract.
Training & Support Program
Franchisor Assistance
House of Colour provides several forms of assistance to its franchisees. Before opening, House of Colour provides an initial training program for the franchisee or their operating principal, which can be in-person (in Dallas-Fort Worth, Kansas City, or other designated locations) or online. It also loans a confidential operations manual and offers consultation and advice on business opening, equipment purchases, accounting, marketing, and day-to-day operations. House of Colour maintains a website to promote services and may negotiate purchase agreements with suppliers for franchisee benefits. Optionally, it may pay a referral bonus for new franchise prospects. After opening, House of Colour offers ongoing advice and guidance on management, finance, and marketing. It provides updates on system improvements, sample documentation, and information technology for the business website and email. Franchisee locations are listed on the House of Colour website, and commission is credited for sales made through the webshop. Additional training for new personnel or refresher courses may be offered, potentially for an extra fee. Franchisees also have access to confidential materials and Marks. House of Colour provides annual online Continuous Professional Development (CPD) training, for which a fee is charged, and may hold periodic national or regional conventions, also with a fee for attendance.
Initial Training Hours
82
Training Location
Virtual and in Des Moines, Iowa, Dallas-Fort Worth, Texas area, Kansas City, Kansas, or other designated locations
Ongoing Support
After opening, House of Colour provides ongoing advice and guidance on management, finance, and marketing, based on reports or inspections. It communicates details of any system alterations or improvements and supplies sample stationery and other documentation. Franchisees also receive information technology support for their website and email, and their locations are listed on the House of Colour website. House of Colour facilitates commission payments for sales made through the webshop. Additional training for newly hired personnel, refresher courses, or special assistance may be provided, for which fees may apply. House of Colour offers annual online Continuous Professional Development (CPD) training to keep franchisee skills updated, requiring a yearly fee of $500. Franchisees or their operating principals are also required to attend annual conventions if held, incurring a convention fee and travel expenses.
Franchise Requirements
Ideal Candidate Profile
House of Colour expects individual franchisees to personally participate in the direct operation of their business. If the franchisee is an entity, they must designate an Operating Principal who will be primarily responsible for the day-to-day operations and hold at least 10% equity. For second or subsequent franchises, an approved Associate must be appointed. The franchisor reserves the right to terminate the franchise agreement if, during initial training, it determines a candidate is not capable of complying with its standards.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Home-Based
Owner Participation
Hands-On
Territory Type
Protected
Territory Size Requirements
House of Colour grants franchisees a protected territory based on geographic area, population, and demographic characteristics. These territories are typically granted for areas with a population of approximately 100,000 people. The population figures are determined using current U.S. Census reports and other chosen statistical sources. In densely populated metropolitan areas, territories might be smaller due to higher population density, while less dense areas may have larger territories.
Staffing Notes
House of Colour requires individual franchisees to personally participate in the direct operation of the business. If the franchisee is an entity, an approved Operating Principal must be designated, who will be principally responsible for day-to-day operations and hold at least 10% equity. For second or subsequent franchises, an approved Associate must be appointed to run daily operations. Franchisees are solely responsible for hiring, training, directing, scheduling, and supervising their employees and independent contractors in the day-to-day operations. Employees, independent contractors, agents, or representatives who have access to House of Colour's confidential information must sign a Confidentiality Agreement or a System Protection Agreement, and the franchisee is responsible for ensuring their compliance with these terms.