Letter of Intent Template for Acquiring an Eyelash Extension Studio

Buyer and Seller Identification

Clearly identifies the legal entities or individuals entering into the agreement. Specifies whether the buyer is an individual, LLC, or acquisition vehicle, and confirms the legal name of the selling entity and the studio's operating trade name. This section also confirms whether the transaction is structured as an asset purchase or equity purchase — for lash studios, asset purchases are strongly preferred by buyers to avoid inheriting unknown liabilities, lease obligations, or employment disputes.

💡 Sellers of lash studios occasionally push for equity sales to obtain capital gains tax treatment. Buyers should resist this unless indemnification protections are robust, as equity purchases inherit all historical liabilities including potential wage claims from technicians classified as contractors. Always confirm the operating entity type (LLC vs. S-Corp) early, as it affects SBA loan eligibility and deal structure options.

Purchase Price and Valuation Basis

States the proposed purchase price, the valuation methodology used to arrive at that number, and the financial metrics it is based on — specifically Seller's Discretionary Earnings (SDE) and the applied multiple. For eyelash extension studios, SDE typically reflects add-backs for owner compensation, personal auto expenses, personal health insurance, and any discretionary owner perks run through the business. The LOI should reference the specific financial periods reviewed and note that the final purchase price is subject to due diligence verification.

💡 Lash studio sellers frequently overstate SDE by including the owner's service production revenue without acknowledging that a replacement technician would need to be hired post-close. Buyers should model a 'replacement cost' adjustment for any owner-performed services — typically $45,000–$75,000 annually for a full-time lash artist — before applying the multiple. This is one of the most common valuation disputes in this industry.

Deal Structure and Payment Terms

Defines how the purchase price is divided across payment components: cash at close, seller financing (seller note), SBA loan proceeds, and any earnout tied to future performance. Lash studio acquisitions commonly use a combination of SBA 7(a) financing (covering 70–80% of the purchase price), a seller note (10–20%), and a buyer equity injection (10–20%). Earnouts tied to client retention or revenue performance are increasingly standard and should be defined with precision in the LOI to avoid disputes during purchase agreement drafting.

💡 Sellers will push to minimize earnout exposure and maximize cash at close. Buyers should tie earnout triggers to objective, software-verified metrics — booking revenue reports from platforms like Vagaro, GlossGenius, or Mindbody are ideal because they are difficult to manipulate. Avoid tying earnouts to net income, which the seller cannot control post-close. If the seller is transitioning clients to staff technicians during a transition period, consider a tiered earnout that rewards successful client transfer rates, not just gross revenue.

Assets Included and Excluded

Enumerates the specific assets being acquired and explicitly excludes items not included in the sale. For lash studios, this section is critical because the most valuable assets — client records, booking history, technician relationships, and brand reputation — are intangible. Buyers must confirm that the booking software account, client contact database, Google Business Profile, social media handles, and online review accounts are explicitly included in the transferred assets.

💡 Google Business Profile and Instagram account transfer are frequently overlooked until late in the deal and can become contentious. Confirm in the LOI that these are included and negotiate who controls them during the transition period. Some sellers attempt to retain the brand name to open a competing studio — ensure the asset schedule eliminates this ambiguity, and pair it with a non-compete clause.

Lease Assignment and Real Estate Terms

Addresses the transferability of the studio's commercial lease, which is often the single most deal-critical third-party dependency in a lash studio acquisition. Most studio leases require landlord consent for assignment. If the lease has fewer than 36 months remaining with no renewal option, this represents a significant risk factor that should be flagged as a condition to closing in the LOI. The buyer should confirm early whether the landlord will consent and on what terms.

💡 High-traffic retail locations — strip mall anchors, medical-adjacent plazas, or boutique mixed-use developments — command lease premiums but also tend to have sophisticated landlords who impose personal guarantees on new tenants. Buyers should negotiate to limit personal guarantee exposure to the initial lease term and explore whether the seller will provide a limited backstop guarantee during the first 12–24 months as part of the seller note negotiation.

Technician Retention and Employment Conditions

Specifies expectations for the retention of key lash technicians through and after the closing date, including whether technicians are employees or booth renters, and whether employment agreements or non-competes are in place. This section should define a minimum staffing threshold as a condition to closing, and address the seller's obligation to facilitate warm introductions of the buyer to the technician team prior to closing.

💡 Technician retention is the most operationally sensitive condition in a lash studio LOI. Sellers will resist naming specific technicians as conditions to close because it gives those individuals leverage. Buyers should consider offering retention bonuses — typically $2,000–$5,000 per technician — funded at closing and payable 90 days post-close contingent on continued employment. This aligns seller incentives (technicians stay through close) with buyer interests (technicians stay post-close).

Membership and Recurring Revenue Continuity

Addresses the treatment of existing client membership agreements and prepaid service packages at the time of closing. Many lash studios offer monthly membership programs (e.g., one full set per month at a discounted rate) with prepaid balances that represent a future service obligation. The LOI should specify how these obligations are valued, whether the buyer receives a price adjustment or credit for outstanding prepaid balances, and how the membership program will be transitioned to the buyer.

💡 Sellers sometimes underreport prepaid liabilities because they have already recognized the revenue. Buyers should export membership data directly from booking software during due diligence and reconcile it against bank deposits. A studio with 100 active members at $99/month represents nearly $120,000 in annualized recurring revenue — this figure should be separately validated and reflected in both valuation and the purchase price adjustment mechanism.

Non-Compete and Non-Solicitation Agreement

Defines the geographic scope, duration, and activities covered by the seller's agreement not to compete with the acquired studio or solicit its clients and staff following closing. For eyelash extension studios, the non-compete is especially critical because the seller likely has strong personal relationships with both technicians and clients and could easily reopen a competing studio nearby or establish an in-home freelance practice.

💡 Three years and five to ten miles is the standard range for lash studio non-competes and is generally enforceable in most states. Sellers who are active service providers will push back hard on in-home freelance work — consider carving out non-commercial personal services to family members while prohibiting paid client engagements. If the seller is also staying on as a paid transition consultant, confirm the non-compete clock starts at the end of the transition period, not the closing date.

Seller Transition Assistance

Defines the scope, duration, and compensation (if any) for the seller's post-closing involvement in transitioning the business to the buyer. For lash studios where the owner has direct client relationships, a structured transition period — typically 30 to 90 days — during which the seller introduces clients to the new ownership and assists with staff management is critical to protecting the goodwill being purchased.

💡 Sellers who are ready to exit often underestimate how important their presence is during the first 60 days. Buyers should tie a portion of seller note disbursements to completion of transition milestones — for example, 25% of the seller note released only after the seller has completed the agreed transition period and client introduction activities. This creates alignment without requiring the seller to remain indefinitely.

Due Diligence Period and Conditions

Establishes the length of the buyer's due diligence period, the specific deliverables the seller must provide, and the buyer's right to terminate without penalty if due diligence reveals materially adverse findings. For lash studios, due diligence deliverables should specifically include booking software exports, technician agreements, lease documents, state cosmetology board compliance records, and three years of financial statements.

💡 Sellers who are disorganized or who have informal financial records will struggle to meet a 10-business-day document production timeline. Build in a cure period — if the seller cannot produce required documents within 15 business days, the due diligence clock does not start and the buyer's exclusivity obligation is paused. This protects the buyer from being held to a 45-day window when the seller hasn't delivered foundational documents.

Exclusivity and No-Shop Provision

Grants the buyer an exclusive period during which the seller agrees not to market the business, solicit competing offers, or negotiate with other prospective buyers. This protects the buyer's investment of time and due diligence costs. For lash studios, 45 to 60 days of exclusivity is standard and reasonable given the document-heavy nature of due diligence in this industry.

💡 Sellers who have been on market for a while may resist exclusivity beyond 30 days, especially if they have other interested parties. Buyers can offer a nominal exclusivity fee of $2,500–$5,000 (credited toward the purchase price at closing) to secure a longer window. For SBA-financed deals, 60 days is often necessary given the time required for lender underwriting and SBA approval, so frame the exclusivity length around financing requirements rather than buyer preference alone.

Confidentiality and Information Use

Establishes mutual obligations to keep deal terms, financial information, and business details confidential during and after the LOI period. For lash studios, confidentiality is particularly important to prevent technician anxiety, client disruption, and competitive intelligence leakage to rival studios if the deal does not close.

💡 Lash studio staff are a tight-knit community and word travels fast. Buyers who disclose a pending acquisition to technicians before closing risk destabilizing the workforce before they have authority to offer retention packages or new employment terms. Consider staging disclosure to key staff members only in the final two weeks before closing, coordinated jointly with the seller, to minimize disruption.