today we are going to look at Hair Salon or hair Care franchises. Before we start I want to clarify that all
franchises in this industry are different so this is going to be a very general look
at the business. What I say may or may not be applicable to
your particular franchise Firstly most salon franchises are created
with the passive investor in mind. So in most situations you can own a salon
and keep a job or other business in conjunction with owning the salons.
This is unlike many food service franchises
that require a hands on owner actively working in the store. So that's a good thing right? I can just sit back and earn money? Not necessarily. That benefit can quickly become a disadvantage
if you live in an area that makes it difficult to find and retain good staff. Without a good manager and staff to run your
store you can quickly find your location becoming locally unpopular.
And with the advent of online review sites
like Yelp, Google and Angies List it is critical to keep customers happy and your reputation
stellar so the ability to find and retain good staff is critical. Now hair salons are typically not huge moneymakers
if you own only one store. For that reason some hair franchises require
a minimum commitment of 3 locations. But remember this is essentially passive or
semi passive ownership, so financial returns should really be compared to stocks, bonds
or other type of investments not other franchises that require full time participation of the
owner.
As with other retail type franchises you will
be very much at the mercy of the location of your shop. So do your homework of how many other competing
salons of the same or different franchise there are nearby. Even take time to monitor foot traffic to the locals stores. To
try and differentiate within the market several hair franchises have focused on niche markets
like kids haircuts, or mens only salons.
And this can be a way to attract a specific
demographic but remember will also cut down on your pool of potential customers in your
region. Here are a couple of the things we suggest
to our own clients who are exploring buying a hair care franchise, first check the FDD
for failure rates. How many have failed and are these failures
mostly found in certain territories. Some franchises do very well in certain states
and not so well in others.
Next up - if the FDD does not indicate an
earnings claim in their item 19 of the FDD, call other franchise owners. All their names are listed in the FDD. Among other questions see if they will give
you an idea of their earnings first, second and following years. After a few calls you should begin to see
a trend.
And don't forget to call a few that left the
franchise to see what happened in their situation. If you haven't heard of a SWOT analysis now
you have. A SWOT should be done really for any business
you intend to open. It stands for "Strengths, Weaknesses, Opportunities
and Threats" and it is these 4 things you will explore in your own proposed territory.
Look at how much your prospective franchise
is charging then call other salons locally. How do those prices compete. Remember higher prices aren't a bad thing
only in economically depressed areas. Check the local review sites.
Are the competing salons filled with bad reviews? Then you might have an opportunity to inherit
people looking for a reliable salon. Also if the same franchise you are considering nearby has good or bad reviews that will also impact your store. And here is a very simple trick to implement to see if you could find good employees at the proposed pay scale - place
an ad! It takes 5 minutes to place an ad in Craigslist
or Kijiji saying I am opening a salon in the city looking for stylists, managers, whatever
you will need and the money you will pay. That response is likely a decent indicator
of labor market conditions.
So a Hair franchise can be a good choice for
a passive investor who has the money to open several units. Some of the niche salons can also work for
an owner operator and generally provide a higher average income. Franchise.City works with most of the top
hair care franchises as well as others with passive ownership models and we can help you
identify research and compare which one might be best for you. There is never a charge for our service and
your franchise will never cost more by using a broker.
We work with over 600 franchise brands. Franchise.City is a better way to buy a franchise. Http://www.Franchise.City.
No comments:
Post a Comment