How salon franchising hitting the million dollar business in India

Over $34million worth beauty services industry is one of the most lucrative career alternatives for talented youth. The Indian beauty and wellness sector is expected to witness maximum growth in the next seven years, says a recent NSDC report, in terms of skilled workforce, making it the fastest growing job creator in the country.

On one hand, this million dollar industry offers a plethora of opportunities, not just for beauticians and managers, but even for aspiring entrepreneurs, running a salon has its challenges. Scarcity of skilled talent has forced many single salons to shut shop, availability of the right professional products, customers expect the latest services and switch easily, using the right equipment and SOPs is critical, the design and ambience of the salon needs significant investment and so on.

Thereby, franchising plays role of a Hero, who allows people with no background in the industry to learn and thrive quickly – ready to roll out model, easy to attract talent, ongoing support, higher ROI.

Business formats on offer

Indian salon franchise operates via single unit franchising, multi-unit franchising and even master franchising at present.

“We have a single-unit, multi-unit and a master- franchisee model. More than 150 entrepreneurs have partnered with Lakmé Lever as franchisees to own Lakmé Salons across the country. Backed by a comprehensive franchisee support model, expansion is one of the key focus areas for the company,” said Pushkraj Shenai, CEO, Lakmé Lever.

Not only this, the country is increasingly witnessing the growing popularity of Area Development Model (ADM) and Area Representational Model (ARM) in salon business. In the case of ADM, partners of a chain are singularly focused on managing outlets within a specified region as well as ensuring a suitable customer experience. While in ARM, the emphasis is on expanding the salon presence by finding new franchisees.

Shenai further added, “Over the years, we have filtered and polished our franchisee model. The comprehensive 6P support model handhold our business partners across the 6Ps, which includes Place, People, Portfolio, Process, Promotion and Personality. Through this we mentor and support our franchise partners at every step and help them become successful entre-PRO-neurs.”

Cautious partner selection

Selection of a franchisee is an extremely sensitive matter for salon business, which no one better than a veteran or industry pioneer franchisor can tell.

“Identifying and hiring the right talent is the most important decision for any company. Hiring great talent not only transforms a Company, but helps them reach their desired goals. We have a strong HR team that splits into recruitment and training and development sections. Every Product used in the franchise Salons are approved from the head office after close monitoring and several trails and we always ensure that the salons are equipped with Products and equipment needed,” said CK Kumaravel, Co-founder, Naturals salon chain.

While some follow critical procedure analyzing and selecting the right franchisee, some cool brands like BBlunt have made army of young guns who and super creative lot to extend their franchise business.

“About 35 per cent of our franchisees are owned and run by young entrepreneurs who are between the age group of 25-39 years, but we do not believe in any age discrimination. It’s important to find the right partner irrespective of their age,” said Adhuna Bhabani, Founder, BBLUNT salons.

Global brands’ foray

While expanding geographically, western brands feel that franchising is the best model to place their brands in other countries.

UK-based leading barbershop Truefitt&Hill, which forayed into Indian salon business in May 2014, has chosen Lloyds Luxuries Private Limited as its franchisee partner in the country. On the other hand, Jean Claude Beguine has entered in the country by opening its outlet in Mumbai and Bengaluru via master franchisee deal with the global brand.

“We have uniform pricing policy across all our stores and our Royal members can access any store across India giving T&H a unique advantage. We have 6 stores open and operating in Mumbai and will be opening 5 new stores in April in Bangalore, Hyderabad & Delhi. Our aim is to cover an additional 10 major cities in India in 2016-17 with corporate owned stores and in addition to that we will also be appointing sub franchisees across India,” said Istayak Ansari, Master Franchisee, Truefitt&Hill Barbershop (India).

It is apparent that the market potential is encouraging home-grown and existing players to expand their footprint, while new European and international brands are charting India entry plans via franchising.