Ep 46: sugaringLA

In this episode of Retail Intel, Brian Sheehan sits down with Marisa Kochnover, a luminary in franchise development for sugaringLA and the Director of Franchise Development at REP'M Group along with Chadwick Brown, the Senior Project Manager at REP'M Group, as we explore the vibrant world of health and wellness in commercial real estate. SugaringLA is known for its organic sugaring studios and lasting hair removal service and earthly care.

Transcript

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Brian Sheehan 0:05

Welcome to Retail Intel , the podcast where we dive deep into the dynamic world of commercial real estate . I'm your host , brian Sheehan , and I'm thrilled to be your guide on this journey through the bustling streets of retail aisles of shopping centers and the world of property investment . With me today I have Marissa Kochnover and Chadwick Brown of the Rep'Em Group . Marissa is the Director of Franchise Development at Rep'Em Group and the Director of Development for Sugaring LA . Chadwick is a Senior Project Manager on the Rep'Em Group's Build'Em team . Marissa is a dynamic professional with infectious energy , empathetic nature and a therapeutic background that sets her apart . With her distinctive insight into franchising , marissa has seamlessly transitioned into the realm of franchise development . Jadwick is a results-oriented , driven professional who values quality and achieving client satisfaction by delivering projects within a timely manner while maintaining costs . He values strong relationships within the industry with owners , architects and engineers , subcontractors , suppliers and co-workers . Marissa Chadwick welcome .

Marissa Kochnover 1:16

Thank you .

Brian Sheehan 1:17

Thank you Brian . Yeah , thank you both for joining me today . So I'd like to start with backgrounds . What got you interested in commercial real estate ? What were you doing prior to joining Repum and working with Sugaring LA ?

Marissa Kochnover 1:31

Sure , prior to jumping onto the development side of franchising , I was a franchising myself . I , along with some partners , had two cycle bars in New Jersey and over the course of my time with Cycle Bar that I was acquired , I ended up becoming president of the operating group that acquired me . We ended up with 15 cycle bars , so I've got quite a unique perspective into the franchising world from the other side . So when it was time to lead up development for this brand , I got a phone call and was super interested , loved the founder , danielle Correa , loved everything about the brand and was excited to jump in and get started from the beginning with a brand again .

Brian Sheehan 2:18

How about you , Chadwick ?

Chadwick Brown 2:19

Yeah , I've been in commercial construction for 20 years and had a few different roles through healthcare and some different retail build outs , and always enjoyed working with the end user and client in an owner's rep role and what better way to do construction than helping folks realize their dream of opening a business and working in this space ? And so been doing this for about a year and a half now and really enjoying it .

Brian Sheehan 2:43

It is exciting . I love seeing that journey that you know , marissa sounds like you had as a franchisee prior to this role and you've got a lot of experience in fitness and wellness . What is it you love about this category of commercial real estate ?

Marissa Kochnover 3:01

So I love the wellness space . You know , whether it's fitness , wellness , self-care , I love that space because I ultimately believe we're helping people find the best version of themselves , whatever that may mean for them , whether it's the service that makes them feel good , the fitness modality they love , or even the business opportunity right , If you're looking at it from another lens .

Brian Sheehan 3:24

And I know Repum Group is really fascinating and I think we're going to schedule time to talk about the company because I want to help share that message with our audience . But today we really set this up to talk about Sugaring LA and maybe we should start , I guess , by explaining what is it , what was the inspiration behind its creation .

Marissa Kochnover 3:47

Yeah , absolutely , it's . Hair removal Sugaring LA is all natural , organic , but elevated hair removal Sugaring is a method that's been around for I mean , they say forever that Cleopatra might have used it . It's been around forever , but it is an old school art , with it being delivered in a new school way with products not only good for you but the environment as well . And our founder , danielle Correa , almost 20 years ago now discovered sugaring , was blown away by its results and it was almost like a light bulb moment for her . She knew that her path in life now was to bring elevated quality sugaring to everybody , and she set out to do just that .

Brian Sheehan 4:32

That's so fascinating . I had no idea it had been around that long hundreds , thousands of years .

Marissa Kochnover 4:37

Yeah .

Brian Sheehan 4:38

So it's this old technique that you've rediscovered , reintroduced in an exciting new way . There's so much competition for retail space these days . How are you finding success with Sugaring LA ?

Marissa Kochnover 4:54

Well , I think it's a combination of factors , the fact that Danielle has this institutional level of knowledge in the art of sugaring and has really been able to bring that skill and that

Introduction to the Hosts and Guests

Marissa Kochnover 5:07

level of training to the brand as we roll it out . That sets us apart in the market big time . I mean she has a proprietary technique called smart sugaring . There's a lot of benefits to this technique . It's customized , but ultimately , at the end of the day , what's important to the business owner is that it's faster . Faster meaning you get to see more clients a day , there's more revenue to the bottom line and your employees have a larger potential for income . So that's definitely a place where we're seeing success and differentiation . But I also think because this brand is partnered with both the RepM group and with FranWorth , it has the ability to leverage some serious franchising power , the playbooks , the tried and true kind of franchise , industry knowledge and the skill development we have with the Beldum team .

Brian Sheehan 5:59

So it's faster , which helps increase revenues . What are some of the other things that make Sugaring LA ? For those that aren't familiar with the brand , that make it unique .

Marissa Kochnover 6:11

Well , there's several things . So if you typically think of hair removal , you're thinking pink , red , female , feminine , but this is intentionally a gender-neutral space , so it's warm and inviting and specifically and intentionally set up so that everybody can come in to feel good in their skin . So our demographic is pretty wide , ages 12 to 70 . And we skew 20 to 30% male , 30% male , which is quite unique . And sugaring in general is less painful than traditional hair removal methods , for example , waxing right . The smart sugaring technique that we offer , as I mentioned , is customized , so we have four different types of sugar paste that we can custom blend depending upon who's coming in , how old they are , skin type , hair texture , temperature in the room . I mean we really factor it all in to provide an elevated and customized experience for the client , and that is that is an elevated experience that you don't find really in any other hair removal space out there right now , whether it's sugaring , waxing , lasering , you're not seeing that and that's something that we're excited and real pumped to bring to the market .

Brian Sheehan 7:35

It's such a great brand and use , at least from my perspective . But from a landlord's perspective , what makes this a desirable use ? Why would they want you in their shopping center ?

Marissa Kochnover 7:49

Well , I think the foot traffic first and foremost right , and I think that this is an elevated brand , so it's drawing a lot of attention . The volume , too , that we can put through the doors , I think , is helpful for all of our co-tenants .

Chadwick Brown 8:04

Yeah , just to add on to that , I think , as Marissa said , it's an elevated brand and it also it's more of a . It opens the doors to a different side of the personal service and beauty brands , for that foot traffic that maybe doesn't exist elsewhere around locations .

Brian Sheehan 8:18

Can you speak to any specific numbers around foot traffic ?

Marissa Kochnover 8:24

For me being on the development side , I'm a little bound by the rules from the FTC . However , I can tell you that in 2022 , her oldest location did see over 1,800 new clients .

Brian Sheehan 8:38

Oh , wow .

Marissa Kochnover 8:39

And that was prior to her becoming a franchise and becoming involved with Brandworth . So that was prior to any sort of marketing effort . So that is solely from word of mouth and referral alone .

Brian Sheehan 8:51

That's incredible .

Marissa Kochnover 8:53

I know .

Brian Sheehan 8:53

Let's talk about the square foot size , range footprint of a typical studio . You call it a studio , you call it a spa .

Marissa Kochnover 9:00

A studio .

Brian Sheehan 9:01

Studio . Yeah , what's the typical size range ? What's your sweet spot ?

Chadwick Brown 9:05

We're sitting between 1,000 and 1,400 , 1,500 feet and we've got a few different prototypical layouts that can be fit within that range .

Brian Sheehan 9:14

It's a good size range . Of course there's a lot of spaces in the world for that , a lot of competition in that size range . But what's something that would drive you towards the upper end of that range , the 1500 square foot space ?

Chadwick Brown 9:26

I think , looking at the market and certainly availability , if there's a large draw there and the demographics make sense to have a higher bed count , if you will , to grow those rooms out to look at the higher end square footage , we would take a look at that . It's also a lot going to be structured around the deal right In negotiations with the developers and landlords , depending on what that tenant build out looks like based on that square footage . That can direct us as well .

Brian Sheehan 9:50

Okay , marissa , do you want to add anything there ?

Marissa Kochnover 9:54

Yeah , I mean this model is tied in really well to how many services you're doing a day , to how many services you're doing a day , and it's a very KPI-driven model . It is simple , it is streamlined . We require very few employees to execute . So when we're looking at that , depending upon that footprint and how many rooms we can get out of that space , that really helps . With the different performance indicators that obviously will gauge success or quicker ramp time and hopefully ultimate success .

Brian Sheehan 10:29

How long is the average session ?

Marissa Kochnover 10:32

So that's part of the beauty of the smart sugaring technique . A typical Brazilian service is 45 minutes long and we're doing them in 15 to 20 .

Brian Sheehan 10:41

Oh , wow , okay , that's what helps you operate with fewer employees and achieve that kind of turnover . That's incredible .

Marissa Kochnover 10:51

Exactly , and you only need one person in the front at a time to keep the flow moving .

Brian Sheehan 10:56

Okay , it's a corporate model , it's a franchise model .

Marissa Kochnover 11:00

Well , it's a franchise model .

Brian Sheehan 11:01

Okay , and how many ? What's the current number of open locations ?

Marissa Kochnover 11:05

Five . Five corporate locations are open right now and we have nine in development .

Brian Sheehan 11:09

Nine in development . How many do you think will open next year , 2025 ?

Chadwick Brown 11:15

Yeah , I would say uh , five or six , well , there's nine in development .

Brian Sheehan 11:19

Is that for this year , for 2024 ? Yes , sir , those will be open this year .

Chadwick Brown 11:23

Yes , uh most of those , yes , but about half of those , and then the others will roll into next year so five to ten right annually .

Brian Sheehan 11:30

New locations open yes , and where do you want to see it be in five years ? We had this conversation again down the road . Love to continue the conversation .

Marissa Kochnover 11:41

Yeah , I mean Danielle Correa , the founder of Sugaring LA , has quite a vision . There is no leader in the sugaring space yet you really have not seen a leader emerge , and that's exactly who she intends to be . So you know , if you think of Sugaring LA , I want you to think of something similar to the whole foods of hair removal , right ? So she's got this idea . 500 or so units would be would clearly be an incredible goal . I don't know if that's happening in five years . I don't know what . You know how long it will actually take us to get there , but the momentum is has begun and it's it's a it's a super fun rocket ship to be , to be strapped onto . I'll tell you that .

Brian Sheehan 12:22

Oh , I bet 500 locations and , as you said , the whole foods of hair removal . That really helps kind of create a visual and that's really exciting .

Marissa Kochnover 12:30

Yeah .

Brian Sheehan 12:31

What markets are your franchises currently located in or where you're growing ?

Marissa Kochnover 12:36

Yeah , I mean , listen , the typical markets are hot . Right , you're seeing Dallas , you're seeing Florida , north Carolina , even Atlanta . Obviously , the next person coming into LA is going to be able to ride these hotels pretty well . So we're seeing the typical markets , but the beauty of this brand is that hair removal is for everybody . This is not a want-to service , it's a need-to service . There's nothing unattainable about it or luxurious . This is self-care , so it works everywhere you put it .

Brian Sheehan 13:08

It's a membership model or it's per session model ?

Marissa Kochnover 13:11

The bulk of your revenue will come from memberships . That is our focus . However , we do have package offerings and single service . There's a product line associated with it as well .

Brian Sheehan 13:21

Okay , what are some of the key factors that you're considering when you evaluate a potential property ? How do you select a site ? Who do you like to be around ? What do you want to see at those centers ?

Chadwick Brown 13:33

I think we're always looking for good co-tenants . Certainly , grocery is always hot and there's always those big names that folks want to be located around , but also the personal service space and beauty space , massage areas and nails as well as lashes , and so if we can get in an area that's got those beauty services , it's got good foot traffic in a walkable area . It's something that we're looking for .

Brian Sheehan 13:55

Have you come across any challenges negotiating lease agreements ? Any challenges negotiating lease agreements ? Is there something unique that maybe our audience isn't thinking about when it comes time to do a deal with sugaring Something to be on the lookout for with this type of use , or maybe specifically with sugaring ?

Chadwick Brown 14:15

Not necessarily . I mean there's in the businesses we're around , there's in terms of exclusivity , there's few of the beauty services that would also provide hair removal . So we haven't encountered a whole lot of issues as it relates to that . More so right now is vacancy , certainly in the retail space , and that's anywhere USA right now . But in terms of specifics of anything around the deal , we haven't had many problems .

Brian Sheehan 14:41

Are there particular things in the shopping center that you're looking for ? So one would be can you take an inline space or do you need to be on an end cap ? Are there other things that you're looking for physically in a shopping center when you're evaluating sites ?

Chadwick Brown 14:55

Yeah , certainly inline , open and inviting area with a lot of foot traffic . I think we keep coming back to that Some good frontage , to kind of highlight that in a marketing sense , but as well as the good co-tenants Parking you need a minimum storefront width 22 feet is our minimum width .

Brian Sheehan 15:15

Yes , okay , probably not too hard to find those . Generally speaking , are there particular demos or incomes , population , other things that would check the boxes to be a good candidate site for Sugaring LA ?

Marissa Kochnover 15:29

Yeah , I mean we're . Obviously we use the software just to understand the different demographics of each area . We're looking for a household income over $75,000 . Our software has the ability to kind of really narrow down and understand how people in that area prioritize self-care and how they're spending their money . So we start to really get granular when choosing territory , so identify ideal locations .

Brian Sheehan 15:56

Mind if I ask is that a proprietary software or do you guys use something off the shelf ?

Marissa Kochnover 16:00

We use Jivis .

Brian Sheehan 16:01

Okay , how about your franchisee profile ? Is there a particular background that you like to see ? Traits experiences that would lend themselves to having success with Sugaring LA .

Marissa Kochnover 16:14

Yeah , I mean this brand is simple , it is streamlined and it is scalable . So it really speaks to an empire builder . It speaks to somebody who can leverage operational efficiencies and really understand how to grow within a space , just because of the simplicity within the model . So we've seen that Obviously people who prioritize wellness in one way or another right . They value putting clean , organic food and products into their body , using on their body , and they see the demand and understand that right . So a respect for that . But we also we're finding we need somebody who has a keen eye for KPIs of a business right , and can really scale a business and lead a team , mentor a team , to be able to focus on those key performance indicators to push the business in the correct direction . So someone who's just well-versed in being a leader is super helpful . But you do not need to have any experience in the sugaring or self-care space . I mean you hire either cosmetologists or estheticians , either one . We provide the training . You just got to be able to lead a good team .

Brian Sheehan 17:32

Sure , and the focus on KPIs . You've talked about that more than maybe anyone I've interviewed and that probably speaks to the value that Repim Group helps bring to these exciting , innovative , fast-growing brands . So again , we'll touch on that in a different interview , I guess . Last question for you today what do you need to see ? What are you looking for from landlord partners for Sugaring LA to be successful ?

Chadwick Brown 17:56

Brian . I'll tell you what . Right now it's responsiveness , just being at a 17-year low . We've got a broad net out there and so really encouraging folks to get multiple LOIs out for us to continue negotiations as we move forward , just because it's such a tight market and so certainly there's some ideas around negotiations and everyone getting agreeable . But good communications , open lines of communications and responsiveness right now , just to get a deal to the finish line and get closed , to get that lease executed , is what's important , because we're , you know , if we've got a site dragging out , these folks are ready to get open for business and we've got to pivot and move . So that's that'd be the number one thing I would say in this market .

Brian Sheehan 18:38

Well , Marissa Chadwick , it was great speaking with you today .

Marissa Kochnover 18:41

Thank you , brian , it was great . Thank you .

Chadwick Brown 18:44

Thank you , Brian .

Brian Sheehan 18:45

And thank you for joining me on Retail Intel . Be on the lookout for new Sugaring LA locations opening near you and be sure to check them out at wwwsugaringlacom . Give them a follow at at sugaring LA . Whether you're an aspiring real estate mogul , a seasoned pro or simply curious about the places where we shop , dine , play and work , this podcast is your all-access pass to the world of commercial real estate . Connect with me on LinkedIn and , if you're interested in being a part of the Retail Intel Podcast , send a message to nationalaccounts at phillipsedisoncom . If you want to hear more about new and expanding brands , keep tuning in to Retail Intel and please subscribe , follow , like and repost . Talk to you next time .