Is a spa franchise right for your club?
With the spa industry growing so rapidly a new type of player has entered the field. Franchises of various sorts are popping up around the country. Franchising isn't a new concept for the professional beauty industry. Regis corporation is the largest chain in the salon industry, which owns various types of facilities from Trade Secret to Super Cuts to Master Cuts — the list of trade names goes on. Is Regis profitable? It would appear so. It is a publicly held company and its earnings have been good for several quarters. Regis owns mid to low-end shops in strip malls and larger malls. Hair cutting and coloring is its core business; and that is a fairly simple business to manage.
What then is the future for the spa franchise? As a club owner should you opt for a franchise in your club? Is it easier to call up a franchise and have them put a turn-key spa in your location for a set fee and royalty?
Franchising is supposed to be a way to extend a brand to individuals who want to own a business but not have to figure out the details. Essentially, a franchise should be a nationally known and respected brand with multiple locations showing plump profit margins. A franchise should offer you resources like regional training schools, a regional or local manager to mentor and guide you, price breaks on products and equipment, help finding and keeping employees, professionally developed marketing programs and more.
STATE OF THE INDUSTRY
There is one brand that has all of this and it has saturated the market. I won't mention the brand but they offer the closest thing to a real franchise with a well-known name. The trouble is you have to run your spa exactly as they say and their product is the only product that can be sold at your spa. Although your menu can be unique, there is only so much you can do with one product line and the restrictions they place on their concept.
What about the alternatives? There are true franchises. The more traditional kind in the beauty industry is regional and company owned. Started by industry professionals these facilities began as one spa and then grew to many locations. Within this model each location has a unique feel because of the building it is in or the area of a city it is in or because the menu is different. Consequently, regional chains owned by one company tend to not resemble the McDonald's-version of a multi-location platform. In the last couple of years there are a few other franchises that are using more of a McDonald's-styled approach. Some of these companies were founded by individuals with little or no industry experience. One franchise founder in particular was unsuccessfully selling “widgets” just years ago and now he is trying to open spas.
THE SPA INDUSTRY IS UNIQUE
When you go to Wendy's you expect a burger. When you go to PetsMart to have your dog groomed, you expect to have your dog groomed. When you go to a Sam's Club you expect low prices in a warehouse environment. When you go to a spa you expect the world to move — you expect to emerge a Charlize Theron or a Giselle. And that is just the beginning of a spa-goer's lists of imminent needs. The spa needs to be opulent and Taj Mahal-esque. The products need to be exotic and alluring. The treatments need to be results oriented, yet fun and experiential. Each client has specific and unique wants and needs. In fact, things are so out of control with what spa goers want that nothing short of a brain scan followed by a vibrating orb that propels one into a virtual reality plane where all of the details are specifically attuned to that client's needs will satisfy.
Do you see where I am going with this? Spa-goers want boutique experiences for the most part. There are some chains that have found the low-end niche where the prices are reasonable and the services are basic. However, the vast majority of spa-goers want a personalized, interesting experience. Not only do they tend to sample various spas, they want their favorite spa to have seasonal specialty menus, new products and treatments.
THE CLUB SPA DIFFERENCE
Having a spa at your club gives you a captive audience. Your club members will probably try your spa if it is marketed internally. Most of all, you already know the demographics of your members. Consequently, tailoring your spa to their needs is a fairly simple step.
Don't be intimidated by opening, running or expanding your spa. Your general manager and an experienced spa consultant can do everything imaginable to set up your facility and teach you how to run it successfully including operations manuals and metrics for success. Run your spa or it will run you.
Melinda Minton is a spa consultant and health and beauty expert in Ft. Collins, CO. She is the founder of the Spa Association, an organization dedicated to enriching the professional beauty industry through self-regulation, education and sound business practices.