Sola Salons: A Prime Opportunity for Private Equity

In 2004, Sola Salons opened its first location in Denver, Colorado. Now, it has grown to over 730 units nationwide, partnering with a wide swath of entrepreneurs over the past 20 years to establish a highly successful franchise brand. Given its strong track record and current market position, Sola Salons is primed for private equity investments in the near future, powering consolidation and additional growth for the brand.

“Now is the time,” said Ben Jones, CEO of Radiance Holdings, Sola Salons’ parent company. “Sola Salons is a 20-year-old brand, and some of our franchisees have been in the system for 15 years or longer. Some of these entrepreneurs are ready for their next ventures, but they want to see their Sola legacies continue.”

“Having investors step in to take over for or join forces with our franchisees creates opportunity for further growth, and it also opens doors for consolidation,” said Scott Thompson, chief development officer at Radiance Holdings. “And it’s a great opportunity. We’re held by one of the blue bloods of private equity with TSC Consumer, and it’s a mature brand with consistent occupancy and consistent operating profits.”

Consolidation opportunities

Across the network, there are franchisees of varied backgrounds and sizes, ranging from one to 50-plus units. The current distribution, which Jones describes as “rather dispersed,” makes the opportunity for consolidation quite robust. Whether it’s a complete acquisition or a partnership model, welcoming institutional capital into the equation would allow even more unity and supercharge growth in the already high-performing industry.

In addition to the opportunities of scale that come with consolidation and multi-unit ownership, Sola Salons is even more tailored to the multi-unit model.

“Sola is highly leveraged to a single employee. A single team member could effectively operate six to 10 Sola units if they’re close together,” Jones said. “Owning Solas in a consolidated way allows you to spread those fixed costs.”

Growth potential

With more than 730 existing units and the potential to scale to 1,000 or more, Sola Salons still has significant growth opportunities in the U.S.

“Some of the more mature franchises in the system who have maybe 10-plus units, they’re doing a million-plus dollars in EBITDA. That’s a great match with private equity,” Thompson said. “It’s not a new concept, and it’s not a new industry. We’ve been around for 20 years, but there’s still plenty of white space to grow.”

The combination of brand maturity, operational efficiency and industry consolidation opportunities creates an exceptional moment for private equity to join forces with the Sola Salons ecosystem. As a well-established brand, Sola offers just what PE firms seek: consistent, recurring revenue with a clear pathway to additional value creation.

For interested groups, Jones suggests getting in touch with the development team to learn more about the varied interests of franchisees in the system, geographical areas of opportunity and potential paths to partnership.