President & COO / European Wax Center
“We had a very successful 2022, in fact it was record revenues for the brand and we were really excited for the interest from our franchisee base to continue to grow and to expand their footprints with European wax center,” said David Willis, the COO and newly minted president of wax salon giant European Wax Center.
Willis, an MBA from Tulsa University in Florida, assumed the presidency of the company in March this year after two / three year stints as CFO and COO, just as the company is reaching record highs.
“When I started as COO three years ago I saw a huge opportunity to extend our leadership position in this unique category,” Willis told CEO NA Magazine. “The out-of home waxing category is one that we have professionalized and candidly created in 2004. What really excited me about this new opportunity is to continue to support our franchisee growth both in new markets and markets where we already have a presence. And supporting our franchisees in strategically densifying their strategic presence in those markets.”
Despite its rapid growth the company continues to be on the look-out for opportunities to drive best in class 4-wall economics with its location driven analysis and close monitoring of individual store results. .
“In franchising, if the franchisees are not making money in their centers then it is very hard for the franchisor to continue to grow at the rate at the rate and pace that we have,” said Willis. “So we will constantly try for opportunities that can drive incremental revenue growth for our franchisees and incremental profitability.”
“Everything starts and end with us with what drives the most profit for our franchisees.”
Out-of-home hair removal is an approximately $18 billion market in the United States, placing European Wax Center as the leader in a highly fragmented market of about 10,000 mom-and-pop waxing salons and a handful of branded regional competitors. European Wax Center is six times larger than the next biggest competitor in terms of unit count and eleven times larger than the nearest competitor in terms of annual revenue.
In 2022 the company generated $900 million in sales across 944 centers in the United States, performing approximately 22 million services a year. The company has also identified the potential for over 3000 locations in the United States and anticipates 10% growth in the number of centers in 2023.
“We really have two very simple growth vectors,” observed Willis. “One is adding more dots to the map and extending our footprint in the United States. The second is driving in-center sales. If we can keep increasing the average center’s four-wall revenues, that drives over-all systemwide sales which benefits the brand. It also drives same stores’ sales growth which benefits the franchisee.”
The Plano, Texas, based company intends to maintain its focus on both of those vectors the coming three to five years, while keeping its eye on the 400+ units in its near-term development pipeline. At the moment, its largest statewide presence is in California with 156 units, followed by Texas with 99 and New York with 79.
“Given the rate and pace of new unit openings, getting to profitability, generating 60% cash-on-cash returns for our franchisees we are seeing an overwhelming interest from our franchisees wanting to add new centers to their portfolio,” said Willis.
“European Wax and 3C Store Fixtures share a commitment to quality, innovation and customer satisfaction. Our successful, long-standing partnership has enabled us to deliver exceptional experiences and growth for both companies, and we look forward to continuing our journey with EWC.”
Michael Jones / President & CEO of 3C Store Fixtures, Inc
Leveraging scale also has important benefits for a company which generates a large portion of its revenue suppling franchisees. Approximately 60% of the company’s revenue as franchisor come in the form of product sales to its network.
“We will continue to use our big chair to provide our franchisees with the lowest cost, highest quality products and services that enable them to deliver an exceptional guest experience to our guests,” noted Willis. “What is really important to us is that guest experience be identical in every center in our network, in every service we provide.”
“We created the category and we are its uncontested leader but we really see opportunities to extend our leadership position by increasing incremental revenue growth and profitability of our franchisees.”
To ensure uniform high-quality service the company has extensive proprietary training in partnership with franchisees. The company is a leading employer of cosmetologists worldwide and has a partnership program with beauty schools. Comfortingly for clients undergoing this “relatively painless” procedure, the company was certified as a Great Place to Work with 91% of its employees saying it is a great place to work.
“At European Wax Center, everyone invests a lot of time, thought, and energy to deliver on a common goal – build a great culture grounded in our values,” said European Wax Center CLO, CHRO, and Corporate Secretary, Gavin O’Connor. “We believe our benefits and programs enrich the lives of our associates. And when you combine that with the daily positive interactions our associates have with each other, and our guests, it makes European Wax Center a truly great place to work.
The European Wax Centers clients emphasize two characteristics they are looking for in the wax salon experience, friendliness and the speed and efficiency of the procedure — which can take between 15 and 30 minutes.
“We spend a lot of time training in terms of how we apply the wax, what are the guest scripts that the waxers apply to engage the guests,” said Willis. “They take a much more consultative approach to our guests. Candidly, our guests view our wax specialists as the experts in skin treatment and we want to arm them with all of the right data so they can provide our guests with the best experience.”
The company is also leveraging technology. Every wax center has an iPad which shows the guests’ visit frequency and history. This allows wax specialists to see, for example – that a client has only waxed their legs and in a consultative manner suggest waxing another area of their body – or that there might be complementary retail products that could improve the skin treatment in between wax sessions.
“We are a big fan of focus, so we are going to do our best not to get distracted with 10 different things we haven’t tried before. The formula and the model has worked great for the franchisees and for the brand.”
“In terms of what is on the horizon, we have invested over the last couple of years in what we call an enterprise data warehouse that really follows all of the transactions — all of the product purchases from our guests over their history within EWC,” added Willis. “Now that this detail is available that intersects financial transactions with guest data we can leverage data insights to really drive personalized messaging and offers to different segments of our customer profiles.”
Aside from allowing the company to make hefty technology investments, the company is also leveraging scale in others ways. EWC collects a 3% marketing fund which can be used to drive national and regional marketing campaigns. Scale has also allowed the company to develop a proprietary comfort wax. The scale has made the company the biggest buyer of wax in North America, allowing the company to sell its wax to franchisees at a price point approximately 50% less than what an independent mom-and-pop salon can buy wax for.
“Most recently we found that our franchisees were struggling to find medical supplies,” remembered Willis. “We used our big chair to negotiate a nation-wide discounted pricing where they can now buy through us much more cost-effectively than buying these medical supplies through local vendors. We really try to use our size and scale in every facet to try and benefit our franchisees.”