DATE | May 25, 2022
TO | Mosaic Professionals
REGARDING | Lease Renewals Coming Up, Landscaping Update, Welcome back Marquita
Highlights
Lease renewals coming shortly, rent to increase marginally
Hoping to have landscaping in front finished on Memorial Day
Welcome Back, Marquita (Studio 107), more babies on the way
Quick change to memos on the website
Greetings Everyone,
Leases
Over the next little bit, I will be sending out lease renewal notices as we prepare for the next few years in terms of the direction we want to head in, costs and upgrades. I hope to have them out by June 1st. The first question you might be asking is if the rent is going up? The short answer is yes, but as we have always approached rental rates from the time we have opened, we want professionals to be here for the long-term which means longer rental periods will be cheaper than shorter ones. A strategy that I think has paid off as we just celebrated four professionals who have gone past 10 years here. Below is a table of what our current professional’s duration profile looks like.
0 - 1 years 4 Professionals
1 - 3 years 8 Professionals
4 - 6 Years 3 Professionals
7 - 10 Years 3 Professionals
10 - 11 Years 4 Professionals
12 + Years 1 Professionals
We are pretty proud of those figures and more so are proud of the relationships we have built over the nearly 14 years since we opened. So those who will have been in long-term leases who choose another long-term lease will only see a small increase.
Increase In Rates
I don’t think anyone is not aware that costs on everything have gone up over the past years more over here recently. Here are few examples of items purchased for the salon:
Description 2017-2018 2022 % Increase
Toilet Paper 22.99 27.99 21.7%
Trash bags 12.99 17.99 38.5%
Soap 7.99 10.99 37.5%
Other items like hand towels and electricity have also increased but only slightly. Luckily, the amount we buy for the salon on a yearly basis isn’t astronomical. So while that isn’t a major impact to the rental rates, an area where the increases are little more substantial are items like the air conditioning units (the last unit replaced was about 60% higher than the one before it), labor, and cost of materials. So we need to begin preparing now for the increases so that when the time comes to replace items or an unexpected major cost we are ahead of it and not behind it. Rate increases are also for the current improvements such as the landscaping and the lobby and future upgrades which continue to keep Mosaic looking sharp for your clients. Lastly, there is some profit in the increase there too. However, I think you find that compared to other private studios, the new rates are still really reasonable.
When Will The New Rates Begin
The new rates won’t begin until the first July 4th, 2022.
Landscaping
Speaking of the landscaping, we are shooting to have the remaining landscaping done on Memorial Day, except the large rock. The large rock has given us more of a challenge than we anticipated. We have been waiting for confirmation of an idea to safely prop it up and that has taken longer to get the engineer here to look at it. However, the consensus of the upgrades has been super positive. A big thank you to Ralph in Studio 124 for his help on this.
Welcome Back Marquita, More Babies On The Way
We are excited to be welcoming back Marquita (Studio 107) from maternity leave. We also have some more babies coming in a few months. Jasmine (Studio 111) and Tanesha (Studio 101) are both expecting. Congratulations to each of you!
Note On Communications
One quick note on communications. I will post memos on the website that don’t require a person to login for 24-48 hours for professionals to read. After that time period, I will move them to the section of the website that will require you to login if you want to read them online. My reason for doing this is to make it a little more convenient to read them when they first come out.
Jay Gardner