Magnolia Soap Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$271,900 - $498,500
Total US Locations
50
Business Summary
Magnolia Soap and Bath Co. operates a retail business that sells high-quality personal care products. These products include a variety of plant-based, hand-crafted soaps (bar, liquid, shaving), face and body scrubs, moisturizers, toners, balms, oils, bath and shower products (scrubs, bombs, shampoos, conditioners, and accessories), and pet soaps and perfumes. Businesses operate from a single, physical location within a protected territory, adhering to the brand's distinctive operating procedures and standards.
Corporate History
Magnolia Soap and Bath Co. FRCH, LLC was established in Mississippi on March 12, 2021, and started offering franchises shortly after on March 29, 2021. The brand's parent company, Magnolia Soap & Bath Holding Co., LLC, was formed earlier in July 2018 and holds the trademarks for the system. Magnolia Soap and Bath Co. outlets, similar to the franchised model, have been operated by affiliates since July 2018. Additionally, the parent company offered process licenses from 2019 to 2021, with one such license still in operation.
Financial Overview
Investment Range
$271,900 - $498,500
Franchise Fee (High)
$60,000
Royalty %
7%
Marketing %
2%
Equipment Costs (Low)
$65,000
Equipment Costs (High)
$195,000
Working Capital
$21,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Magnolia Soap and Bath Co. has reported varying financial results in recent years. In 2024, the company recorded a net loss of $270,835 and had negative working capital, meaning its current liabilities exceeded its current assets. This contrasts with 2023, which also showed a net loss of $48,484 but had positive working capital, and 2022, which had a net income of $158,290 and positive working capital. A significant aspect of Magnolia Soap and Bath Co.'s financial structure is its relationship with its parent company, Magnolia Soap & Bath Holding Co., LLC, which heavily influences its operations. The company has a substantial net receivable from its Holding Co., totaling $1,659,608 as of December 31, 2024. The financial statements also note that its transactions with the parent company may not reflect what would exist if it operated independently. The independent auditor provided an unqualified opinion on the financial statements for all three years, indicating they are presented fairly in all material respects.
Financing Details
Magnolia Soap and Bath Co. does not offer any direct or indirect financing to its franchisees. This means that Magnolia Soap and Bath Co. will not provide loans or guarantee any financial obligations, such as notes or leases, on behalf of franchisees. However, if a franchisee secures financing with the assistance of the United States Small Business Administration (SBA Financing), Magnolia Soap and Bath Co. will agree to subordinate its interest in collateral to that of the SBA lender, which can be helpful for franchisees obtaining such loans.
Performance Metrics
Total US Locations
50
Franchised Units
40
Corporate Units
10
Avg Square Footage
1,500
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Magnolia Soap and Bath Co. has been involved in two litigation cases. The first case, filed in February 2020 by a competitor (Buff City), alleged that Magnolia Soap and Bath Co. improperly used confidential information and intellectual property. Magnolia Soap and Bath Co. denied the claims and filed a counterclaim. This case was settled out of court in July 2022, with Magnolia Soap and Bath Co. agreeing to pay $50,000, phase out some product lines, and adjust advertising, while accepting no liability. Both claims were dismissed. The second, more recent case, filed in 2025 by a former franchisee, alleges violations of Ohio's Business Opportunity Plan Act, fraud, breach of contract, and unjust enrichment. Magnolia Soap and Bath Co. plans to vigorously defend against these claims and has filed a motion to dismiss, asserting the former franchisee failed to mediate as required. This second case is currently pending.
Bankruptcy History
Magnolia Soap and Bath Co. has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Magnolia Soap and Bath Co. franchisees must meet several conditions. They need to be in full compliance with their current agreement, have committed no more than three events of default during the term, and provide written notice to Magnolia Soap and Bath Co. at least six months before the current term expires. Franchisees will also need to sign a new successor franchise agreement, which may have materially different terms and conditions from their original agreement, and pay a renewal fee. They must continue to maintain their location, trade dress, and other operational standards, execute a general legal release, and comply with all then-current qualifications and training requirements, including completing any additional training.
Training & Support Program
Franchisor Assistance
Magnolia Soap and Bath Co. provides extensive assistance to its franchisees both before and after opening. Pre-opening support includes guiding site selection and approval, providing specifications for store layout and design, and lending operations manuals. Franchisees receive initial training, conducted remotely and at the franchisor's headquarters or an affiliate-owned outlet, for up to two individuals. There is also an optional, paid on-site training and supervision for up to three days upon opening. After opening, Magnolia Soap and Bath Co. offers mandatory or optional additional training programs (up to 12 days per year) and annual conferences (up to five days per year) for which fees and expenses apply. Franchisees can request remedial on-site training for a daily fee plus expenses, and receive individualized assistance via phone, video conferencing, or email within reasonable limits. The franchisor also provides samples or digital artwork for advertising and promotional materials, conducts inspections of the franchised business, and gives written specifications for required equipment, products, and services, along with updated lists of approved suppliers. Magnolia Soap and Bath Co. may also recommend minimum and maximum prices for products and services and must approve all franchisee advertising and promotional materials.
Initial Training Hours
65
Training Location
Remote and New Albany, Mississippi
Ongoing Support
After opening, Magnolia Soap and Bath Co. provides ongoing support through various programs. This includes offering mandatory or optional additional training programs for up to 12 days per year, and an annual meeting or conference for up to five days per year. Franchisees are responsible for associated fees and expenses for these. Upon request, Magnolia Soap and Bath Co. can provide remedial on-site training and assistance at the franchisee's premises for a daily fee plus travel expenses. Individualized consultation and assistance are also available within reasonable limits by telephone, video conferencing, or email. The franchisor also provides samples or digital artwork for advertising and promotional materials, conducts inspections of the franchised business, and gives written specifications for required equipment, products, and services, along with updated lists of approved suppliers. Magnolia Soap and Bath Co. may also recommend minimum and maximum prices for products and services and must approve all franchisee advertising and promotional materials.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Magnolia Soap and Bath Co. territories are defined on an individual basis, typically encompassing a specific town, city, or county, identified by a map or a list of contiguous zip codes. The territory size considers factors such as minimum household numbers, average home prices, and household incomes. Specifically, a System Territory will generally have a minimum population of 50,000 individuals. Alternatively, if fewer than 50,000 individuals reside within five miles of the franchised business location, the territory will be defined by a five-mile radius.
Staffing Notes
Magnolia Soap and Bath Co. requires that the franchised business is either personally supervised and managed day-to-day by the franchisee, or by a qualified general manager. If a general manager is hired, they must receive prior approval from Magnolia Soap and Bath Co., successfully complete the initial training program and all other required training courses, and dedicate their full time to the role without any conflicts of interest with competitors. While general managers are not required to have an equity interest if the franchisee is a business entity, they must still meet the franchisor's approval standards. All managers and other personnel who will have access to Magnolia Soap and Bath Co.'s proprietary and confidential information and training must sign a Confidentiality and Non-Compete Agreement. Magnolia Soap and Bath Co. provides standards for employee qualifications and training but does not assist with employee hiring.