Tried and tested. These three words best define the business of franchising. When we look at the business models of big names across categories, it isn’t difficult to notice that most of them have gone ahead and chosen the franchise route for expansion. This applies to the business of beauty as well.
To begin with, let’s jot down the business advantages that franchising brings with it. The most prominent among them would be faster expansion, visibility across the country and joining of hands with like-minded individuals, thus saving on time, better utilised for strategising.
When we look around, we see that in the business of beauty in India, prominent names have opted for the franchising model and managed to grow exponentially. The earliest players to take this route was Lakmé Salon, Trends in Vogue, Naturals, followed by Pep Salon, Studio 11, Tony&Guy, Juice, to name a few.
Setting the context for the story, Chief Executive Officer, Lakmé Lever, Pushkaraj Shenai in Mumbai says, “While beauty services is an attractive and growing category, running a salon has its challenges, such as scarcity of skilled talent, which has forced many standalone salons to shut down. Availability of the right professional products, meeting a customer’s expectations that keep switching, using the right equipment and SOPs is critical, and the design and ambience of the salon needs significant investment. Franchising allows those, with zilch knowledge of the business, to learn and thrive, with a ready to roll out model, making it easy to attract talent, offering ongoing support and higher ROI.”
With over 35 years of experience in the salon industry, Lakmé Salon’s franchise journey as an entrepreneur began in 2001. Today, Lakmé has a presence of over 280 salons in more than 70 cities. About 15 per cent of the network is company-owned and operated, while 85 per cent is franchisee-owned and operated.
Lakmé Salon is poised to grow its diffusion business model, Lakmé Fast N Fab, in the top metros, with progressive franchise business partners. With a relatively lower operational setup cost, this unisex model allows one to operate with retail spaces of 500 and 600 sq ft area, which is ideal for high-traffic locations like malls, corporate parks and high streets.
Talking about her foray in the franchising, reveals the veteran in the business of franchising, Managing Director, Shahnaz Husain Group of Companies, Shahnaz Husain says, “The idea of starting the school and franchise salons came to me when Threety Irani wanted to buy my products. At that time, my products were only available at my salon and also they were prescriptive that needed specialised training to be administered. She then requested me to train her and her two daughters. Once she was trained, the question arose of using the Shahnaz Herbal name, since she was keen on starting her own salon and carrying out the clinical treatments she had learnt. So we worked out an agreement by which she would have the right to use the Shahnaz Herbal name and carry out her specialised salon treatments and sell the products. This agreement later became our franchise agreement and was the start of our franchising system.”
In 1979, Kolkata had the first Shahnaz Herbal franchise clinic. It was also the beginning of my beauty training programme and institute. Today, there are over 400 franchise ventures worldwide.
She further adds, “Our newest franchise venture is the Just Shahnaz retail outlet. The Group is targeting metros, mini metros and Tier 2 cities. After opening in Jaipur, Just Shahnaz retail outlets have opened in Goldighi Mall in Silchar, Howrah, two in Kerala (Palarivattom and Thrissur), Patna, Bhuvaneswar and Hissar. In Delhi alone, there are 11 company owned and company operated salons and stores.”
The story of Chennai-based Naturals is a case study to understand the potential and nuances of franchising business and not just with regards to the business of beauty.
Co-Founder and CEO, Naturals Salons, CK Kumaravel, says, “After six salons, Veena and I realised that we could not spend enough time at the floor level. There was a need for owner-manager on to look into the day-to-day operations. With this business model and the brand name Naturals, we saw an opportunity to grow further. Again, franchising was not easy, as the beauty industry was not popular back then. Also an investment of Rs 30 lakhs was very high, leading to which our franchisee campaign soon fizzled out. At this juncture, we approached a friend so that we could look at the startup and invest 50 per cent. He agreed and a few more individuals liked that formula. People joined in and our co-ownership business started growing.”
Today, Naturals has more than 550 salons with just a handful owned and operated by the company.
4Trends in Vogue
Trends in Vogue, with its brands Limelite and Green Trends, has shaken the salon business when we talk of their franchisee network. Senior Manager, Business Development, Green Trends, Nabin Banik says, “When we started out, it was planned on a salon chain model, hence, expansion was in our vision. After completing more than a decade in the beauty business and understanding the changing needs, the brand started its first franchise salon in 2010.”
In a span of six years, the brand has more than 319 Green Trends salons where 94 are company owned and over 225 are franchise outlets across 51 cities.
Strands Salons is the brainchild of the entrepreneurial vision of Naunihal Singh, CEO of Strands Salons. It all started a decade back when Singh, a hard core marketing professional with over 15 years of experience in the beauty and cosmetic brands, decided to become the game changer.
He shares, “In FOFO (Franchise Owned Franchise Operated), the franchise operates the salon functionality with company standard norms and policies related to the brand and customer service. The company is responsible for online and digital marketing. The franchise has to look after the marketing, advertising and promotion at the local level. The franchise journey has created a brand name in a short time and continues to create entrepreneurs, which aids employment and increases the number of entrepreneurs.”
Mumbai-based Tarun Sharma and Vikas Lachhwani, Founders of Pep Salons have an interesting concept in place. They share, “We are the only salon franchise where we are the partners and invest money up to Rs 5 lakhs, technology, branding and help with hyperlocal marketing. We offer the Low- Capital Investment model, wherein we limit the investment required by the salon partner and instead, we invest in the salon.”
The brand has grown to have 10 outlets in four months.
Co-Founder & CEO, Orane International Pvt Ltd, Dinesh Sood reveals, “While abroad, the beauty industry was growing, it was quite different in India. Here it was unorganised and there was acute shortage of manpower. To fill this gap, Orane was born.”
Today, Orane is recognised by CIBTAC, UK and has recently been accredited with CIDESCO, too. He adds, “Two factors which play major role in making franchising a viable option, is uniqueness and scalability. Our franchise model is distinct because it is highly scalable as there is a demand for beauty professionals due to which there is a requirement of professional beauty schools all over India. We aim to empower our franchises with a proven system to grow a valuable business. A larger asset in the future and a greater income today is what makes our business a scalable franchise business.”
“We offer our business partners a unique business opportunity which is beyond a career. That is why 60 per cent of our business partners own more than one franchisee,” shares Sood.
Today, Orane has marked its footprints in 70 cities; there are 62 franchisees and eight company owned institutes.