Knockout Beauty Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Knockout Beauty is a beauty retail franchise selling curated, science-backed skincare and beauty products with expert guidance. Franchisees run the stores, managing inventory, consultations, and sales.
FranchiseVerdict summary · 2026
A Knockout Beauty franchise requires a total initial investment of $181K – $438K, including a $45K franchise fee and an ongoing 8.0% royalty[2]. Per the 2024 FDD, average unit revenue was $383K[2]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $181K – $438K
- 19th pct Personal Care…
- Avg gross sales
- $383K
- 1 outlet6th pct Personal Care…
- Royalty
- 8.0%
- 45th pct Personal Care…
- Units
- 5
- 12th pct Personal Care…
- SBA charge-off
- N/A
Quick verdict · Personal Care & Beauty · color = vs category peers
Green = favorable by >10% vs Personal Care & Beauty avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $181K – $438K including a $45K franchise fee, 8.0% ongoing royalty.
- RETURNSAverage unit revenue of $383K/year.
- RISKVerdict C (Average), verdict score 50/100 (higher is better).
- FLAGAuditor disclosed a going-concern note, which flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Knockout Beauty Retail Group, LLC
- Parent company
- Knockout Beauty By Knocking On Forty, LLC (KB BY KO40) - affiliate, not parent
- CEO title
- Owner and Founder
- Cayli Cavaco Reck
- Incorporated in
- DE
- HQ
- 11724 Barrington Court, Los Angeles, CA 90049
- Auditor
- Citrin Cooperman & Company, LLP
- Audited financials
- Franchisor revenue
- $96K
- vs $64K prior year
- ⚠ Going-concern note
- Disclosed in FDD 2024
- Status as of 2024; may have been resolved in a later filing we don't yet have.
Overview
About
- CEO
- Cayli Cavaco Reck
- Headquarters
- CA
- Founded
- 2021
- FDD year
- 2024
- States available
- 3
Can you afford it, and what does the money buy?
Entry cost runs 41% below the typical personal care & beauty franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $45K | $45K | |
| Initial Inventorynot refundable | $80K | $160K | |
| Real Estate; Prepaid Rent and Security Deposit | $8K | $40K | |
| Leasehold improvements | $15K | $45K | |
| Signage | $2K | $8K | |
| Furniture and Fixtures | $10K | $30K | |
| Architectural Plans and Design | $2K | $7K | |
| Computer System | $1K | $6K | |
| Equipment | $9K | $25K | |
| Laundry | $3K | $4K | |
| Insurance Deposits and Premiums | $2K | $2K | |
| Grand Opening Advertising | $0 | $10K | |
| Licenses and permitsnot refundable | $1K | $2K | |
| Professional Fees | $2K | $15K | |
| Architectural Review Feenot refundable | $0 | $5K | |
| Travel and Expenses While Training | $3K | $10K | |
| Pre-Opening Costs | $3K | $6K | |
| Additional Funds (3 Months) | $3K | $18K | |
| Total initial investment | $188K | $438K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $181K – $438K
- Top 40% of category vs category
- Liquid capital req'd
- $3K – $18K
- Top 40% of category vs category
- Franchise fee
- $45K – $45K
- Top 40% of category vs category
- Royalty
- 8.0%
- percentage · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 11.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 8.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $200 |
| Transfer fee | $50 |
| Renewal fee | $20K |
| Inventory (initial) | $80K – $160K |
| Total fee load | 11.0% of rev |
What do units actually make?
Average unit sales run 52% below the personal care & beauty norm.
Based on a single outlet - not a system average
Source: FDD 2024 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$73K
19.0% margin
Unlevered ROIC
23%
EBITDA / total invested capital
Payback
4.4 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Knockout Beauty unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
23%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Knockout Beauty units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$920K
on $4.6M purchase
Total debt
$3.7M
SBA $2.3M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
Based on a single outlet - not a system average
- Avg gross sales
- $383K
- Per unit/yr · from the Item 19 franchised-cohort breakdown (no single system-wide average disclosed)
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales by outlet
- Sample size
- 1 outlet
- vs category median 38 · small
- Reported figure
- $383K
- A single outlet — not a range
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 179 Personal Care & Beauty brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $383K/year in gross sales. Revenue-to-investment ratio: 1.2x.
Fee burden
Total ongoing fee load of 11.0% — above the Personal Care & Beauty average of 7.8%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence. Sample size of 1 outlet — treat as directional only.
Operator retention
Net unit growth of +100.0% over 3 years (1 opened, 0 closed).
Multi-unit rate
50% of franchisees own multiple units, a moderate multi-unit rate.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Personal Care & Beauty averages
How Knockout Beauty Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 5
- Opened
- 1
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 3
- Corporate units in the system
- % franchised
- 40%
- vs corporate-owned
- Multi-unit owners
- 50.0%
- Net growth (3-yr)
- +100.0%
- Net unit change over 3 years
- 3-yr CAGR
- +100.0%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Continuity rate
- 100.0%
- Units that stayed open
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 3 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
3
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
The auditor flagged going-concern doubt (Item 21) — the single biggest risk here.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
⚠ Grade capped at C: the auditor disclosed a going-concern note (FDD Item 21). The verdict score reflects the underlying financials before that cap.
Knockout Beauty presents caution-level risk: a micro-franchise system with unproven unit economics, no net income transparency, early-stage scale concerns, and undisclosed franchisor financial health.
Litigation (Item 3)
No litigation required to be disclosed
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Citrin Cooperman & Company, LLP⚠ Going-concern note flagged
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 50 / 100 verdict
- 01MINOROnly 5 units in system with 100% YoY growth — extremely small franchise base makes financial projections unreliable and indicates early-stage/unproven model
- 02MEDHigh investment range ($181K-$438K) against undisclosed profitability creates significant risk of negative cash flow or extended breakeven periods
- 03MINOR8% royalty on gross sales is aggressive when net profitability is unknown — could consume 20-40%+ of actual net profit if margins are thin
- 04HIGHGoing Concern flagged as False — suggests financial instability or operational concerns at franchisor level
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 11.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | No |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles, California |
| Jury trial waiver | Yes |
| Governing law | DE |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed
Items 10, 11
Training & Operations
- Classroom training
- 34 hrs
- On-the-job training
- 0 hrs
- Training location
- Over Zoom / Los Angeles, CA or other designated location
- Ongoing training
- Required
- Time to open
- 3 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Shopify
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Shopify
Item 20 · call current owners
Franchisee Contacts
2 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Knockout Beauty · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Knockout Beauty franchise?
The total investment to open a Knockout Beauty franchise ranges from $181K – $438K, with an initial franchise fee of $45K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Knockout Beauty franchise owners earn?
According to Item 19 of the Knockout Beauty FDD, the average gross sales per unit is $383K. Important context: Based on a single outlet - not a system average. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Knockout Beauty FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Knockout Beauty FDD and qualifies whose outlets they describe.
What is Knockout Beauty's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Knockout Beauty (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Knockout Beauty franchise locations are there?
As of their most recent FDD filing, Knockout Beauty has 5 total units in the United States, including 2 franchised units and 3 company-owned units. 1 new units were opened in the latest reporting year.
Is Knockout Beauty a good franchise to buy?
FranchiseVerdict rates Knockout Beauty as a C-grade franchise with a verdict score of 50 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.