With 37 locations, Eleven Eleven Holdings is the second-largest Sola Salon Studios franchisee and it’s poised to grow even larger after attracting a new group of investors.
A trio of private equity firms— Three20 Capital Group, Geneva Glen Capital and Stonehenge Partners—made a major investment in Eleven Eleven and completed a recapitalization. Eleven Eleven in turn has several active multi-unit development agreements to open another 75-plus Sola Salon locations in Pennsylvania, Southern New Jersey and Tennessee over the next five years. Sola has more than 600 units in the United States, Canada and Brazil.
“Our growth really required additional horsepower,” said David Raduziner, who with Steve Breuner opened their first Sola in 2009. “We sort of outgrew our lending relationship and were ready for deeper pockets to continue our explosive growth path.” Raduziner, Breuner and Breuner’s son, Bo Breuner, will continue to lead Eleven Eleven, with Raduziner as CEO.
David Raduziner is CEO of Eleven Eleven Holdings, which is operating its Sola Salon locations under the name Salon Freedom.
Raduziner’s background is in commercial and corporate real estate and Steve Breuner is a former Super Cuts franchisee who grew his unit count in that system to more than 50. “In a nutshell, I understood the business model very well at the outset,” said Raduziner of the Sola concept, which for franchisees is a real estate play where they lease individual salon suites to independent beauty professionals. “Steve brought to the table the in-depth industry experience to really understand our customer from the very beginning.”
“We’re a very high performing system within the Sola community,” Raduziner noted, and that performance, along with the duo’s experience, caught the attention of Three20 Capital as its husband-and-wife partners Todd Recknagel and Kristi Mailloux zeroed in on the salon suite segment.
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As Eleven Eleven grew, “the earnings had grown commensurately so they’d become a really strong middle market platform,” said Recknagel. He and Mailloux had a relationship with Geneva Glen Capital, a Chicago-based firm, and GGC later pulled in Stonehenge, itself an investor in multi-unit companies including Carolina Restaurant Group, a large Wendy’s franchisee.
“The market is very large for the salon suite concepts,” said Recknagel of the segment’s appeal, and the environment created by Sola is “the best in the industry.”
Todd Recknagel is managing partner of Three20 Capital Group, which he formed with his wife, Kristi Mailloux, to invest in multi-unit businesses.
“We also love the repeat and recurring nature of the revenue” with salon professionals paying rent, “and by nature of the model, there’s limited employees, that was attractive to us.”
Three20 Capital also recently invested in commercial cleaning franchise Office Pride, and Recknagel and Mailloux are operating partners in PCRK Group, the largest Massage Envy multi-unit franchisee in the country with more than 90 units.
For Raduziner and Eleven Eleven, making it though the COVID-19 pandemic and accompanying business shutdowns was challenging but also demonstrated the long-term viability of the salon suite model.
“It was extremely difficult, of course, when we went to zero revenue across our whole system for six to eight weeks,” said Raduziner, with some locations closed even longer. Most of the group’s salon professionals eventually reopened their studios, he continued, “and we saw a resurgence in our occupancy and our revenue” as more stylists sought to open their own businesses and customers shifted to individual studios instead of multi-chair salons.
Eleven Eleven’s locations will now operate under the name Salon Freedom, which Recknagel noted “really represents the mission of what we’re doing, bringing salon freedom to these professionals.”