Franchising for a beautiful future

A recent report by PricewaterhouseCoopers, or PwC, and the Federation of Indian Chambers of Commerce and Industry pegged the size of the salon business at Rs 7,000 crore.  This perfectly displays the popularity of the beauty industry.

Ramya, a 25 year old working girl used to visit a salon once in three months but in the present scenario she has started patronising salons twice to thrice every month. Same is the case with Rohit, who never had ventured into an organised beauty salon. However seeing his friends and collegues getting hair styles and facials, he also can be seen going to salons regularly. This innate desire in all human beings to look good has led to the present status of the organised beauty industry.  With the youth getting more and more beauty conscious, abundant opportunities have arisen in this sector. The article provides an insight to the trends in this rising industry.

Beautifying business

A sea change can be seen in the beauty business. In the past there were just local beauticians with their small and non-branded parlours catering to the beauty needs of clients. The scenario now is completely different to that of the past. Now a number of branded salons have emerged in every city, small or big, which caters to the growing needs of clients to look more beautiful and younger. Shahnaz Husain, Chairperson, Shahnaz Husain Group of companies explains, “Indians are spending much more on beauty and wellness than they did before. This is due to increasing awareness of fitness and grooming, global trends, work pressures, competitive work environment, as well as higher disposable incomes. There is growing awareness that looking good is also a matter of feeling good.”

Consumer’s Trends

Firstly let us have a look at few of the latest consumers trends:

Increase in spending on beauty services: Clients, both men and women have started spending more on them selves. With life getting more stressful and busy, people like to get themselves pampered and feel relaxed in branded salons.

Increase in unisex Salons: Established beauty salon chains are jumping into the unisex bandwagon. Lakme Lever, a unit of Hindustan Unilever, which already has 170 salons across the country, launched its first unisex salon, Lakme Ivana, in July 2011. All branded salons like Shahnaz Husain, Jawed Habib, Naturals etc have become unisex after seeing that there is a tremendous increase in men clientele.

Fair share of men: Beauty treatments are no longer only a female prerogative. Men also realize only the importance of the appearance and are going in for salon treatments. Few years back if a man wanted a haircut, he went to the local barbershop. But the rise of unisex salon chains has changed this outlook. Now men prefer to get services done from branded unisex salons. The prices are a bit higher as compared with the barbershop but the services and treatment make up for the high prices. Manish Bajaj, Managing Director, Tress Lounge said, “Presently we have 50 per cent of male clients in all our outlets.” Seeing the readiness of the tougher gender to get pampered in salons has led to more and more salons turning unisex in their services.

From franchise perspective

Increased expansion: Most established players adopt the franchise route for rapid as well as successful expansion. Franchising is the best way for making the brand popular and increase its footprints nationally and internationally.

Franchising takes on small cities: It is not only the people of metro cities and towns who aim to look better, clientele of small cities also want to get pampered and experience the services of the top salons. Keeping this in mind these chains use franchising to scale up and move to Tier-II and Tier-III towns. Jawed Habib Hair and Beauty, owns only 15 of its 329 outlets in the country. Naturals, which has over 100 outlets, has set up shop in small towns in Tamil Nadu, such as Thanjavur and Chidambaram, through franchisees.

Growth of spa and wellness centres: A major thrust in growth is the increasing demand for spa and wellness treatments. This is one of the main franchise trends, where salons are including spa treatments or are being converted into ‘day spas’ offering both salon and spa services. As informed by Husain, “Taking the franchise of a successful brand and introducing spa treatments, based on franchising, can spell success. The spa business in India is estimated to be around Rs 500 crore. This is expected to grow, as both small and big players in the salon business have started offering spa treatments.”

Competition with international players: With consumers getting more aware of beauty treatments, franchisors and franchisees also have geared up to give ace services. Moreover many international players find India a great beauty market. This has further made the national players in constant competition with their international counterparts.

Franchising paves the route

Mostly all big brands opt for the franchise way after gaining popularity and success. After establishing themselves at one place, the best route for such brands is to adopt franchising to venture into other big and small cities. Mostly all branded salons like Shahnaz Husain, Jawed Habib, Naturals, Lakme, VLCC etc have taken the franchise route after gaining success. Jawed Habib, Managing Director, JHHBL said, “India has got the potential for 5,000 more franchised salons from the organised sector. Therefore, we will be expanding rapidly.”

Eligibility for franchisees

Doubtless that the beauty franchise industry is very paying and popular but requires much contemplation to be successful. Not only complete training to the beauticians is satisfactory but along with it an ability to make customers feel different and more beautiful are the most important characteristic that a salon owner should have. The franchisee should also keep up with the latest beauty trends, techniques and treatments to make the salon different from all other competitors. Along with it an eye for beauty and fashion is also necessary. Habib informs, “We welcome first time entrepreneurs and also people who would like to diversify. Housewives who are ready to make an investment and have a passion for hair and beauty can also be considered.” Shahnaz Husain informs, “The franchisee is required to complete our beauty diploma and Advanced Courses, in order to be trained in basic beauty, as well as our specialized treatments and products.” C K Kumaravel, Co-Founder and MD, Naturals Beauty Salon India Pvt. Ltd also shares: “We are looking at individuals with great business acumen and a passion to succeed. Besides this, we require around 1,300 to 2,000 sq. ft carpet area to open the salon with an investment of about Rs 30 to 50 lakh.”

To conclude it can be said that the beauty industry has a very bright future with both the genders spending equal amount of money and time in branded salons. Those who want to make a lot of money by making people look more beautiful are welcome in the franchise bandwagon!