In Brands, Finance, Retail

Madison Reed plans to open more Color Bars as part of a new joint venture and franchise plan with Franworth, a consulting firm. This brand is the first digitally native vertical brand to use the franchise business model as a growth strategy to meet customer demand for local brick-and-mortar retail.

WHO: Founded in 2013 by Amy Errett, Madison Reed is a beauty company revolutionizing the way women color their hair. The fast-growing start-up has created a luxurious hair-color formula free of the eight harsh ingredients typically used by other brands. For women who prefer to color their hair at home, Madison Reed uses proprietary color-matching technology and a team of professional, on-call colorists to help women choose the perfect shade of hair color, which is delivered to their door. For those who prefer to have Madison Reed color applied with the help of a professional, Madison Reed Color Bars are open in New York City, the San Francisco Bay Area, and Dallas-Fort Worth, with more coming soon. Products can be found on the brand’s website, Madison Reed Color Bars, and Ulta Beauty.

Headquartered in Ann Arbor, Michigan, Franworth helps brands build a strong foundation, navigate their acceleration, and create economic value for both franchisors and their franchisees. Through its expansive suite of professional services and best-in-class processes, talent, technology, and proprietary supply chain system, Franworth specializes in advising emerging franchisors and helping them scale their businesses efficiently to achieve profitability and maximize their potential for success. Franworth’s current portfolio of franchise brands includes Title Boxing Club, The Lash Lounge, CityRow, and Live Well.

WHY: The JV will allow the company to “scale physical retail” according to CEO, Amy Errett.

IN THEIR OWN WORDS: “We have been trailblazers in ‘omnichannel retail,’” said Amy Errett, CEO and founder of Madison Reed. “We are excited to announce that the next channel in our growth strategy is franchising, which unlocks the ability to scale physical retail like no other.”

“To us, being omnichannel means we have a relentless drive to meet the needs of our customers wherever they are,” Errett said. “Our customers come first, and we want to support them regardless of whether they color at home or in a Color Bar. Our responsibility is to ensure that her experience is the same regardless if she is walking into an existing Color Bar, shopping online, coloring at home, or visiting a franchise location. She will get the same high-quality hair color and the same unique brand experience.”

“The Franworth team is honored to be partnering with Madison Reed to bring its Color Bars to communities across the United States,” said John Rotche, Franworth founder and CEO. “Amy and her team have built an incredible brand that consumers love. We’re thrilled to have the opportunity to work with her talented team to create and build the Color Bar franchise program and expand consumer availability of Madison Reed’s renowned salon-quality hair color.”

DETAILS:

  • Under the agreement, Madison Reed will continue to own, grow, and operate Color Bars in select cities and, along with Franworth, develop best-in-class infrastructure to support future Color Bar franchisees. In addition, Franworth will design and deploy Color Bar franchisee recruitment efforts nationwide.
  • From the customer’s viewpoint, Madison Reed Color Bar franchises will mirror the nine Color Bars operating in New York City, the San Francisco Bay Area, and the Dallas-Fort Worth metroplex.
  • Madison Reed’s Color Bar concept was introduced in 2017.
  • The company raised $51 million at the beginning of 2019 in order to roll out more Color Bars. The brand had plans to roll out 25 locations by the end of 2019; so far they have opened three new locations.
  • Currently, the brand has nine Color Bars located in New York City, San Francisco, and Dallas.
  • According to WWD, under the new agreement, Madison Reed expects to have 100 company-owned Color Bars and 500 franchises by 2024.
  • Previous rounds of funding according to Crunchbase:
    • 4/29/13 Series A $4 million led by True Ventures
    • 1/28/14 Series B $12 million led by Northwest Ventures
    • 9/28/15 Series C $16.1 million led by Shea Ventures
    • 11/1/16 Series C $13 million
    • 3/23/17 Debt Financing $10 million
    • 10/20/17 Series C $25 million led by Comcast Ventures

Photo: via Madison Reed

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