KBRA assigns preliminary ratings to two classes of notes from EWC Master Issuer LLC Series 2022-1, a whole business securitization.

The Series 2022-1 Class A-1 Notes and Series 2022-1 Class A-2 Notes (together, the Notes), anticipated to be issued by EWC Master Issuer LLC (the Master Issuer), represent European Wax Center, Inc.'s (EWC or the Company) first securitization. The transaction structure is structured as a "whole business securitization" (WBS) in which EWC and certain of its affiliates are contributing substantially all of their revenue-generating assets to the Master Issuer. The collateral includes existing and future franchise and area development agreements, supply contracts, profits from wholesale and retail product sales, royalties and other franchise fees, and intellectual property. The proceeds from the offered notes will be used to fully pay down all borrowings under the Company's existing credit facility, fund certain transaction accounts, and pay certain expenses and general corporate purposes, which is expected to include a return of capital to shareholders.

The Company provides out-of-home (OOH) waxing services in the U.S. The OOH waxing market is the fastest growing segment within the broader hair removal market, which the Company estimates to be approximately $18 billion, domestically. The system delivered over 20 million waxing services across EWC's 853 locations and generated approximately $797 million of system-wide sales for the twelve months ending (LTM) December 25, 2021 (Q4 2021). The network is 99% franchised by location count and is spread across 44 states and Washington D.C. as of the same date.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

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