Bath Junkie Bubbles Growth

The idea for Bath Junkie Inc. didn’t wash up until Jocelyn Murray took her first real bubble bath as an adult. Until then, she had thrown in the towel, giving up the fight with scented soaps, perfumes and lotions that left her skin crawling.

“I was in a bagel store, and this girl was standing in front of me,” Murray said, “It was really one of the only times I thought someone smelled good, and I wasn’t rubbing my nose [because of allergies to perfume].

“I said to her, ‘You smell so good. What perfume are you wearing?’ She said, ‘It’s not a perfume. It’s an oil.'”

The girl directed Murray to a store where she bought bubble bath and soon wound up working.

The store led to the eventual concept of Fayetteville-based Bath Junkie Inc., which sells soaps and scents separately so they can be blended to make unique products. The store carries a variety of products, from Agony of ‘Da Feet’ Lotion to Bodacious Bath Oil.

Murray is executive vice president and director of marketing for Bath Junkie in addition to being an owner and the company’s “lab rat.”

Murray’s business partners are her mother and step-father, Judy and John Zimmer. They founded a sole proprietorship in 1995 and had opened a few stores called Soap Opera by 1999, when they changed the name to Bath Junkie Inc. A year later, they began franchising stores.

The number of franchises has increased from four stores in 2000, to 22 in 2002 to 41 in 2004. Nationwide, the company is projected to have 55 franchise stores open by March and 75 stores open or in the process of opening by the end of 2005.

In 2003, Bath Junkie Inc. formed Bath Junkie Stores Inc. to oversee the five corporate stores, Bath Junkie Franchise Inc. to serve the franchisees, and Bath Junkie Distribution Inc. to oversee the distribution and manufacturing of its products.

The trio did all of that without one single bank loan.

Zimmer’s husband donated his retirement money, and Murray cashed in her 401(k).

In 2002, the three corporate stores had total sales of about $290,000. This holiday season saw the highest producing franchise store for Bath Junkie to date hit $107,000 in gross sales for the month of December.

“That store opened in July,” Murray said of the shop in Beaumont, Texas. She estimated the store sold 256 gallons of pump-able products and 280 salt scrubs.

“What we really loved about this is that women would come in and they would be teachers or nurses and they would say, ‘This is so much fun. I wish I could do this,'” Zimmer said. “We said, ‘Let’s get all these women out of panty hose, and let’s empower them to be their own bosses.'”

The store offers more than 200 different fragrances, from Fizzy Soda to Hawaiian Rain that can be mixed with its water-based cosmetic colorants and added to its bath products. Offerings include salt scrub, bubbling bath salts, facial masks, shower gel, shampoo and conditioner, and 10 different types of lotion. The company also offers custom mineral-based make-up.

When the Arkansas Razorback cheerleading squad needed lipstick, Bath Junkie was able to color-match a perfect “Razorback red.”

Bath Junkie targets markets with more than 50,000 people, and its primary demographic is women ages 18 to 35, although men are an emerging segment.

Stores pay a franchise fee of $45,000, in addition to paying Bath Junkie a royalty fee of 5 percent of monthly net sales.

Stores on the lower end might see monthly sales between $14,000 and $16,000 from products that range from a suggested retail price of $8.50 for a two-ounce bottle of body mist to $27 for an eight-ounce container of salt scrub. The company even sells a product for pooches called That Darn Dog Shampoo.

The cost of goods sold for a store is roughly 18 percent, said Steven Kay, corporate counsel and director of franchising for Bath Junkie.

Estimated start-up costs, including franchise fee, run from $69,000 to $137,000, Kay said. That doesn’t include advertising, which Bath Junkie Inc. encourages.

When the offering began in 2000, the franchise fee was $25,000. The company recently bumped the fee to $35,000.

“We haven’t taken out any loans to run this business, at the same time we feel the franchisees are getting a nice investment for less than $200,000,” Kay said. The fee increase was needed to offset the cost of additional support staff, he said.

How it Washes Out

Bath Junkie also acts as the main vendor to its franchisees and has been able to supply them with most of the products since it made the switch to contract manufacturing in 2002. It distributes and manufactures 90 of its 200 fragrance oils.

Recently, the company began efforts to manufacture fixtures that will be placed into the new franchise stores and is working to develop its own construction contracting system.

“Our main goal is to make sure our franchisees get a great store and get the best bang for their buck in build-out,” Kay said. “We want to give them the fastest return on their investment.”

Zimmer said Bath Junkie makes it more profitable for franchisees to buy supplies from them because it took the most expensive products it had to buy, such as fragrance oils, and made its own formulas.

“They supply a lot of the things we really need and that need to be controlled by them,” said Carly Fisher, owner of the Bentonville franchise store. “It’s more efficient, and we get the product faster.”

Murray said distributing in-house allows them to track sales in-house.

The potential for a 55-store distribution also wins them buying power, she said.

Kay estimates that Bath Junkie Distributing turned its inventory at least three times in 2004.

“Our pump-able products are our bread and butter,” Kay said “That is what makes us different from other companies. That’s what makes it a desirable investment for the franchisees. That is why Bath Junkie distribution came to be. We realized early on that we were a small company, and vendors weren’t cutting us breaks.”

Manufacturers often approach Bath Junkie to offer them product development for free, Kay said.

“Manufacturers want to work with us because they see a client for a potential 100 stores down the line,” Kay said.

So they might develop something like a mold for a new bottle for Bath Junkie free of charge.

Franchise Facts

The International Franchise Association reported that about 11 percent of the franchise industry is considered retail, which includes the beauty-related sector.

A study released in 2004 by the International Franchise Association Educational Foundation, and conducted by the National Economic Consulting Practice of PriceWaterhouseCoopers, indicated that 767,483 franchised businesses accounted for 7.4 percent of the private sector economy nationwide and more than 13 percent indirectly.

The study said franchises contributed indirectly to 18.1 million jobs and $506.6 billion in payroll, and directly to 9.7 million jobs and $229 billion in payroll. Retail products and services accounted for 431,590 jobs and $8.8 billion in payroll nationwide. The study was based on figures collected from 2001.