Elaborate on your franchise model. What are the terms of Franchise in your business model? Please elaborate on the quit period offered to the franchisee.
We have 500+ salons which are in a joint venture format. The balance is franchised. We take franchisee fees from them when they come on board. On a monthly basis, they have to give 15 per cent of the total revenue. These are the two major revenue streams that we have.
Apart from them, we have something called territorial selling, where we sell territories to a master franchisee, so that he can manage the territory. He acts as an agent of us for that territory. We think it is one of the fastest ways to expand network and increase brand awareness. The franchise in India is emerging out as a new business option for many first timers to small scale entrepreneurs in India.
Capital Expenditure is starting from Rs 15 lakh – Rs 45 lakh, Space required: 200 – 1,200 carpet sq ft with Rate of Investment (ROI) of 20 months. This differs from brand to brand. Jawed Habib is a cash positive company, and does not need a huge capital investment. This is purely a people business that is run on franchise format.
What are the emerging trends you see in Wellness Franchise? Elaborate.
Today’s generation is image conscious. Considering a busy schedule, people do not have time for themselves. They would like to be groomed in the shortest span of time, in the best possible way, and at the most affordable price, possibly. Your workplace, may it be your office or business, everybody needs to be presentable. As time goes by, personal grooming is more of a basic need than a luxury, as it was thought about five years ago. So no doubt, Wellness franchising will surely bloom in 2015-16. It is a high growth industry which offers tremendous learning and growth opportunities and a good lifestyle. The Wellness sector is growing at a 15 per cent compound annual growth rate, and I see a lot of potential for Hair & Beauty brands in franchising.
Elaborate on the selection criteria for the wellness franchisee. Do you check his/her professional background, past record or what?
As such, there are no preset criteria for selecting franchisees. One needs to be passionate about his work and give his full attention to the business. Customer rapport, revenues, increases only when ownership of the business is visible.
What kind of quality do you see in a franchisee? Elaborate on the details of your Top Franchisee. Why he/she tops your list?
Everyone has different motivations for wanting to become an entrepreneur. Depending on your goals, different franchises can offer you different results. The franchise brand has a proven concept that can assist in predicting some of the variables to opening a new business and hopefully mitigate some risk. However, focusing on key aspects to making any location a success and opening and running a successful business is up to the individual. Another essential area for success is ensuring you have a solid understanding for basic human resources practices. Implementing the systems necessary to properly hire, develop and train your personnel is important, too. Any successful business needs to ensure the staff is service-oriented and has an understanding of the product to keep people coming back for more. Hopefully, this leads to attracting new customers.
How a franchisee's growth affect a Franchisor's growth? Explain the franchisee & franchisor relationship.
Jawed Habib franchise partners are indispensable part of our business strategy. They represent the brand at the local level. It is important for a Jawed Habib franchisee to do well and earn profits. Our franchise model is a proven scale-up model, wherein most of our franchisees have put up multiple Jawed Habib salons after earning profit from the first store. Thus the chain keeps on growing. The relationship between franchisors and franchisees is a "commercial marriage" that goes hand in hand as the business goes till its end. Most franchisors do encourage their franchisees to make contributions to the development to the business of the franchised chain which their individual talent and qualities permit. The franchise agreement defines the entire basis of the relationship up front, so that both parties know their rights and obligations to the relationship.
What kind of support do you offer to a franchisee?
Our franchisees come from a diverse set of backgrounds, such as chartered accountants, working professionals, first time entrepreneurs, established entrepreneurs, housewives, retired professionals etc. Hence, we impart training to them in all aspects of running a JH salon. Our training includes salon management, customer handling, cash management, stock handling, hygiene standards, staff management, marketing/promotion, business know-how etc. This gives them a holistic view about our business. Apart from these, we regularly impart constant technical up gradation to our hairstylists/beauticians. This training keeps them up-to date on soft skills, latest trends, innovative haircuts, specialised beauty treatments and more.
Are you planning to franchise in an untouched area/category or location in near future?
We are targeting rural as well as urban area of country where grooming sector is required as an essential need.
What are the emerging challenges faced by a renowned Franchisor like you?
The entire wellness industry is unorganized with only a few branded players. There are many factors, which can also be termed as challenges, such as an ideal location, visibility, rentals, good catchment area, defined target group, etc. But the primary concern of all salon owners is the acute shortage of skilled manpower. High attrition rate amongst the technical staff also causes inconvenience among regular customers who are used to a certain stylist. A certain amount of trust is required for a person to move to a new stylist. Government needs to promote skill development among young people who are unemployed and also among those who want to take up hairstyling as a long term career. The competition would be against the unorganized sector. With the lack of quality standards, this sector could provide semi standard services in the name of quality. Every salon has its set of own loyal customers. Catering to a huge marketplace, salons today have to build upon standardized quality services. This is the key factor towards customer acquisition & retention.
Elaborate on the roadmap ahead for your brand's franchise business? What are your expectations from wellness franchise in years to come?
Initially, we will be launching 5 categories in cosmetics products like shampoo, conditioner, hair mask, serum, henna (Mehendi). These products will cater to different types of hair ranging from dry, oily, curly, frizzy and even coloured-treated hair. All JH business models such as THE JAWED HABIB, Hair Yoga, Jawed Habib Hair & Beauty, Hair Xpresso and Jawed Habib Academy have received high consumer traffic, following which we thought of introducing something from our own label into cosmetic products. The Jawed Habib Hair Yoga products will be initially available in our salons and then in other local markets. We believe in the theory of living healthier, happier and easier. We closely understand consumer needs by daily interacting with them at our salons. This has provided valuable inputs with respect to the expectation of the client. Our products are better, safe and affordable. The license has been given to a retail company named Urban Life and are expected to launch the products in the market by the end of this year.
In total, how many franchise outlets you are running at the moment? Share the total number in terms of sub franchise or master franchise model.
At present, we have over 500 salons and around 20 Master franchisees for respective brands.
