How Hello Sugar's Founder Fell into Franchising and Built a National Business

Brigham Dallas, founder of waxing franchise Hello Sugar, transitioned from running an advertising business to building a successful national franchise, driven by his passion for helping others start their own ventures.

“Franchising just felt like the natural fit,” Dallas told 1851 Founder, Publisher and CEO Nick Powills during his regular podcast, “Meet the Zor”. “It's something I'm already passionate about—helping people start businesses.”

Dallas initially considered franchising as part of his business journey. In 2018, he was solely focused on running his own company. However, by 2020, while teaching a course on creating a six-figure income with minimal investment, he realized his true passion lay in empowering others to start their businesses. This led him to franchise his own business, Hello Sugar. 

“I want to build a national company,” he said. “I want to win on a national level. I want to build a legacy. I want to build something freaking awesome.”

A summarized transcript of Dallas’ interview has been included below. It has been edited for clarity, brevity and style.

Nick Powills: I always start off this way, so it's nothing new, but how did you accidentally fall into franchising? What is your franchise story?

Brigham Dallas: Yeah, so franchising is something I never considered. I was told about it in the 2018 time period, and I was like, “Nah, that's not for me, I just want to run my business. It's a totally different business, I just want to focus on what I'm doing.” And then, fast-forward to 2020, I was teaching at a university. I taught a class that I created called “How to Start a Six-Figure Income for $3,000 or Less” because most students have no money in school, and so it was catchy, cult-ish. It was fun, and I found my calling and passion in life, which is just helping people start businesses. I thought that was like the coolest thing to me. It was so exciting to see my students start and make wealth out of that. And franchising just felt like the natural fit — it's something I'm already passionate about, helping people start businesses, and very passionate about, which was my business.

Powills: Okay, so, you do this class — now I'm really curious — so you do this class, you're educating people on how to get into business for $3,000 or less and build a six-figure income. Obviously, franchising's far from that, and obviously we've taken such a swing on the franchise field that it kind of changes it. Have any of your students joined the franchise? 

Dallas: In the very beginning, starting the franchise, a lot of students had interest in it, and it was something that happened post-opening, so it wasn't students that were in my class. I didn't push this on anyone. I used my franchise and my company as a case study, and so they were very intimately familiar with my company prior to the franchise going live, and I shared P&Ls and the whole thing. Once I announced on social media that I was doing that, I had a lot of interest from students, so the majority of my first franchisees were students.

Powills: That's incredible. Okay, so now take me through the growth model. Obviously, you're an entrepreneur, even before you start this franchise, you start this as a one-off unit. What did that growth period look like, and then at what point do you decide to franchise? 

Dallas: This all started with a conversation. So back up — I'm running an ads agency, and I had a large client in the diet and muscle space that was selling ads online. I moved to Phoenix to work with them full-time, and I hated it. It was scammy, it was dishonest, it was like I couldn't sleep well at night, so I was like, “I know I gotta get out of this, but I gotta be able to afford to get out of it, if you will, so I need like $5,000 a month on the side.”

I was talking to a friend of mine — she's an esthetician and she had to pay $20,000 in taxes after making $100,000 the year before. I didn't think you made that much working with hair, but she told me she could do four Brazilian waxes in an hour, charging $45 apiece but her cost was just $3 a wax. And I was like, "You're literally making more than a lawyer with six months education. This is insane!" I asked her how she found clients, and said, "I just ran a Groupon." So I asked how she got her clients to come back, and she said, "Well, every month, hair grows back, so they just sign up to come back next month. It's just a monthly thing." And she wasn't in a beach town — she was in Utah.

And I was like, “Wow, this is really cool.” So I invited her to come down to Phoenix. One of my advertising clients was a plastic surgeon who had a free room, so I opened up for $600 a month in a plastic surgeon office. I paid her to teach my first esthetician, and we just went to town and just started. And that was the initial insights.

Powills: Okay, so flash forward. I'm going to take this way forward. Obviously, you make it sound so beautiful and so easy at the same time. When you're franchising a business, especially when there's fees and structure that come alongside it, you have to add a little bit more complexity back to it to show, like, here's all the infrastructure. And obviously skipping that whole process — like yours came out of a conversation, but then it took time to figure out how you build energy. 

When you're positioning this back to the franchisee, I'll say as an outsider, when I was looking at your story, I was like, you figured it out. You've taken the salon suites as a model. Same idea there. You've taken a room that you could break into a business, and then you can open up a flagship, and here's how you can scale your business. So two sides to that. How did you add the complexity into it to make it so that they're going to join with you versus staying independently? And then secondly, talk about that scaling model, because I'm sure it's built off of your original story.

Dallas: Yeah, so that's a great question. It wasn't easy. The first five years were very difficult.

I took my first paycheck in year five. And during the first four years, I just took everything I made and put it right back into the business. I scaled from one to ten salons during that time.

And we started in salon suites, which were these tiny one-room salon boutiques. You rent a room — you can rent it on a small basis, fairly easy to start. I can build a room in a day or two and just get up and running. And because I was good at advertising — that was our secret sauce — so we ran some free bikini ads online, and then we connected them to our website and booking flow. And then that doubled my income when I started doing that. And then I was like, “Okay, I found the secret sauce.” So then I built a business on this advertising platform of “free to get in” and then upsell them as they get in the door.

So coming to the franchise, there's a lot of complexity in organization and communication to franchisees of your business. Things that I took for granted. And I think about it a lot like your house. Like, you know, if I was to come over, Nick, your house is probably clean normally. But if I were to come over or a friend were to come over, you would vacuum. You'd take the dishes out of the sink. You'd go to an extra level of cleanliness. And it's the same thing with a business franchise. People are like, “Well, how do you hire?” And I'm like, “Well, it's intuitive to me, but it's not going to be intuitive to you. So I need to create a protocol for this.” And you do that every step of the way and soon, you start to see — because these new people coming in — like where your weaknesses are. You start to flush those out as you start. 

Powills: I love that you have on your website, you said, 500 territories primed. I love that. And then you talk about how we have 89 locations open. Curious on a few things on those 89. Number of franchisees and then the mix of more of the salon suite model versus the prototype model. 

Dallas: Yeah, our initial macro strategy for five years is to build a bunch of suites across the country and then convert them over the long term into flagships. So I give every franchisee a three-year window to convert it into a flagship where they have to sell their business. So right now, the 90 suites have 90 locations, about 16 are flagships, and the rest are suites. And I imagine that's going to continue another year, so over this year, we'll hit 140-ish locations opened. And by the end of next year, we'll be 250 or so. And then slowly, we'll start to see that expiration date. They have to turn to flagships and they start to build more of those. 

Powills: Okay. So I'm looking at the cost, and it's interesting how you break down the process as well. But what is the general cost to get in? And how are you disclosing that?

Dallas: Yeah, everything's disclosed. So one of the things that I worry the most about is getting sued. Most franchise owners are, like, not sharing everything. I'm literally sharing everything down to the penny of the P&Ls of every franchise owner, so there's full transparency for everyone in the business. So what it looks like is if you were to start a salon suite today, it would cost about $60,000 — $15,000 of that would just be reserves and it would take really about $40,000 to get you up and running.

Then, over the next four to six months, you'll get profitable. Most people say four or five. It doesn't take a lot of money to get profitable, like maybe $10,000 to $12,000 revenue, depending on how expensive your rent is and how expensive your ads are. And then, once you're profitable, it takes about 15 months to hit maturation. And maturation is about $30,000 to $35,000 in revenue in a suite. I'd say the average mature salon is doing anywhere between, like, $90,000 to $130,000 profit. The average salon today — this is a salon suite — is doing about $60,000 profit. So when we look at different maturity levels, we have a lot of newer franchises, so they're still building. And then when we turn it to a flagship — we don't have many outside of Arizona that are flagships. 

My flagships are doing between $150,000 and $250,000 profit per year. And what's the build-out on the flagship? The build-out's going to be anywhere between $150,000 to $400,000. Okay.

I mean, that'd be standard costs to get into. I'm looking at both the magic and the — it's not a risk. It's like you have to be very protective of it.

Powills: The magic is you've engineered a business model where people can get in and they can scale, which is so valuable. Because if you think about — if you think about your story, I can go back to my story in starting our company. A lot of great entrepreneurs bootstrap to figure it out and franchising almost eliminates the ability to bootstrap because there's a giant fee in most scenarios. You're still going to pay a franchise fee on the suite's model with you, so the benefit is you have a wider range of candidates who might not be able to get into retail — traditional retail or traditional wellness — the way they engineered it. But then you have to be super protective to make sure that they're not someone that's going to stall out too early and that they really have to have that scale mindset. 

Dallas: Yeah, you're exactly right. And part of the issue with the smaller — it's almost easier to do a larger build than a smaller one because with the larger builds, you can get loans from banks. We can't necessarily get those loans, so at a build of $100,000 or less — banks make the same amount of effort to do a $500,000 loan as a $100,000 loan; they just won't touch anything less than about $250,000, a typical bank — and so it's got to be all cash-funded in our scenario. Whereas if you're doing a half-a-million-dollar build and you got an SBA loan, you only need to put about $50,000 down.

Powills: What's the dream now? 

Dallas: I've thought about this a lot. Look, I'm opening my 15th location in Arizona, and net profits are over a million a year. I make more money than I could possibly ever use in my life. I'm very financially okay. It's not about that. The franchise was never about that. I want to build a national company. I want to win on a national level. I want to build a legacy. I want to build something freaking awesome. And not only for me, I want to see franchisees — the people that I love and care about — also build this amazing empire and to be able to quit their jobs and to be able to go into this full-time. It's the most rewarding thing for me. So I want to keep doing what I'm doing. A lot of my franchisees are like, “How long are you in this?” And I'm like, “As long as it's fun. As long as I'm enjoying this and having a good time with it.” And I'm having a blast right now, so I'm going to stay with it.

Powills: I mean, in today's franchise world, the PE firms knock on everybody's door as fast as humanly possible. They say, “Let's try to find value in a business that is scaling.” So I'm sure you have that target on your back. But it's an interesting place to be in where you're no longer chasing the financial side. You're chasing winning. And winning is fun for you, right? 

Dallas: Winning is a lot of fun, yeah. And we've been approached by private equity. We're not ready yet. I don't think we've reached an inflection point where that makes sense. I think at some point, it makes sense for businesses to scale through private equity. I know some people are like, wait as long as you can. Don't give up equity. But, I mean, the reality is, how much money do you need to live? If somebody offered you $30 million versus $100 million, the delta on what you can spend between that 70 is just like, do you really have that much of a lifestyle that you need that much money to live? You're probably mismanaging something if you need $100 million versus $30 million. So, I mean, at some point, there's scale that private equity can bring that is really valuable and is worth coming on for. We're not there yet. I don't think we need to coin that. 

Powills: Have you relied back on your own tactics to go find franchisees or have you used other means? 

Dallas: You know, it's funny, Nick. About 15% of my franchisees come from podcasts. So, we do a lot of podcasts like these and help to find franchisees. The other tactics, we haven't used broker networks or [franchise sales organizations]. A lot of it is just word of mouth. We go to conventions. We do advertising online. And we do podcasts. Word of mouth is a big one for us as well, and Google searches. 

Powills: On the podcast side, I mean, really, they've watched you or listened to you talk about something from a visionary standpoint and they're brought in to you. Out of curiosity, do you see a difference — not good or bad necessarily, but a difference in people that come from watching you versus looking at an expo and seeing a booth?

Dallas: One hundred percent. It's a very different clientele. The ones that come from podcasts typically are research enthusiasts. They love learning. They want to acquire as much data as possible. By the time they actually reach us because they're so good at acquiring knowledge, there's not a lot for us to do. They've gone through the process silently, on their own, in their own manner. And we'll answer questions for them. Usually, their questions are very thoughtful.

I mean, it's that idea of, like, “I want to continuously be learning.” It drives people and then they create quality franchisees, so we love the people that come from podcasts. Conversely, those that are at shows, I would say, like, 85% to 90% of people you meet at shows are just I would not want to do business with. But there's always a gem. I think usually at a show we find one person, and I'm like, “That's the one.” I can tell from the conversation I'll have at the show that this guy's going to be our franchisee.

Powills: I mean, that's where the culture side is — so essential to finding franchise success. All right, so have you gone back and done your class again? Are you still doing the class of $3,000 to six figures? 

Dallas: It's a sensitive spot for me, Nick. Like, I want to so bad but, you know, I've got a fiduciary duty to the franchise right now. And for me to do a class would be way too much of my time compared to what I need to put into the franchise. 

Powills: It's almost like you should take the same franchise mentality and franchise that class. Because I'm sure you had people that took it and got their brain understanding what is possible with a little bit of grit and hustle. And it should be the class that pays it forward. Like, the next class should be taught by someone that listened to the advice and did it, you know?

Dallas: Yeah, ironically, one of my students is now teaching the same class there, his own version of it. But he's now taking my spot for that. 

Powills: All right, so let's say someone's watched us to this point. Is there anything else you want them to know about the business that is important?

Dallas: If you're looking at franchising, one place I want to go with this is — when you get into a franchise, the timing matters. It depends on your risk appetite of when you join a business. And you can think of franchisors in terms of maturity and risk, so the more mature the franchise is — the more doors it has opened — the less risky it is, but also the less opportunity for growth and profits because some of the best territories are already taken. 

On the other side of things, the earlier you get into it, the higher the risk. I think most franchises don't make it past two years. I mean, it's incredibly expensive to start a franchise. And most people don't know that. You know, like, most people think, “Oh, if you’re starting a franchise, you're just rinsing and repeating the same business you already have, which is my understanding of starting a franchise.” It's completely false. There's so much money that needs to be spent and development into building a successful franchise, and it's incredibly difficult to do. So that first one to two years, if you're in and looking at a business during that time, you need to be asking yourself, “Will this business survive?” And you're already placing a bet on that, a really important bet, because you're putting money into this. Are the systems in place? Do they have the funding to make it through the first two years? And what are, like, my contingency options in that case? And Hello Sugar is at a really good time. We're now at year three. We've got 90 doors behind us.

I think we've made it past the “Oh, crap, are they going to survive?” stage and into, “Let's build this to a national scale.” We're ready for all the growth we can get, but we're not at a point where all the zones and all the best territories are taken yet. There's still a massive amount of the country available. And I think if people are looking for franchises, whether it be Hello Sugar or others, that's something to consider. So I'm going to close with a statement.

Watch the full interview here.