Merle Norman Cosmetic Studio
Bottom line
- Total investment $48K – $260K including a $0 franchise fee.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated MODERATE with a risk score of 65/100.
- System contracting at -7.1% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Merle Norman Cosmetic Studio unit return on the cash you put in?
Unlevered ROIC · per unit
96%
Above typical band (30–60%)
Overview
About
Franchisees operate retail cosmetics studios selling Merle Norman branded skincare, makeup, and beauty products through direct consultation and application services. Day-to-day responsibilities include product sales, customer consultations, beauty consultations/makeovers, inventory management, and studio operations. The model relies on walk-in traffic, local marketing, and repeat customer relationships in a mature, competitive beauty retail market.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 23 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Merle Norman presents a contracting cosmetics franchise with misaligned economics, opaque unit performance data, and territorial vulnerability—suitable only for buyer-beware investors willing to validate unit-level profitability independently.
Score breakdown · what drove the 65 / 100 rating
- 01MINORUnit count declining 4.1% YoY (797 units) signals market contraction and potential franchise saturation
- 02MINORZero royalty fees create misaligned incentives—franchisor has minimal ongoing revenue dependency on franchisee success
- 03MEDNo disclosed average revenue or net income data (missing Item 19) prevents ROI validation and suggests franchisor may lack confidence in unit economics
- 04MINORUnprotected territory enables channel conflict and cannibalization, especially problematic in declining system
- 05MINOR$0 franchise fee indicates weak barrier to entry, potentially attracting uncommitted operators and inflating failure rates
- 06MINOR10-year term is unusually long without performance milestones or exit clauses, locking franchisees into aging brand
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
84 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Merle Norman Cosmetic Studio · FDD (2025) PDF