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Oct, 12 2010

5 FRESH CONCEPTS IN FRANCHISING

HEALTH and beauty are no longer two separate continents, as in the past. Now, they are considered two sides of the same coin and together encompass wellness, a term that has come to symbolise the perfect blend of health and beauty.

HEALTH and beauty are no longer two separate continents, as in the past. Now, they are considered two sides of the same coin and together encompass wellness, a term that has come to symbolise the perfect blend of health and beauty. Amidst this change in definition, health and beauty sector is witnessing a revolution and emerging as one of the most lucrative business sectors. The need of having a healthy body and a healthy mind has lead to the entry of new franchised concepts. The success of these unique franchise business concepts internationally has further motivated many investors to experiment and evolve these concepts further. Besides, their profitability and cut-throat competition among conventional business concepts has also triggered the need for something new. Many entrepreneurs have made some astounding breakthroughs in the segment, like novel franchise concepts of handmade soaps, nail bar, spine care treatments, medical systems such as ayurveda and hair care, etc. Here are a few of them.

Money at your fingertips

Nail art is a specialised cosmetic field. Nail lacquering, nail painting, nail decoration and nail piercing are some different nail art ideas, which are popular all over the world. Global trends like nail piercing and nail painting are also making their presence felt in the Indian beauty business basket. A low-cost and high-return franchise business concept of nail bar is a rage in the West and now India too seems to be painted by its colourful benefits. As of now, nail art industry is growing by leaps and bounds all over Europe and US, as one can come across nail bars at every nook and corner.

Franchising of the nail bar concept in India is at its nascent stage and there are only a few players in this industry. But its growth prospects are bright, as it is a low-cost and high-return model. Inspired to offer something new that attracts women of all ages and the concept's stupendous growth in the West lead to the launch of Perfect Ten Nail Salon and Bar in India. Having two franchisees, Perfect Ten Nail plans to open 10 nail bars pan India by this year-end.

Naunihal Singh, CEO, Perfect Ten Nail Salon and Bar, says, “To take up the franchise of Perfect Ten Nails, the franchisee needs to invest Rs 8 to 15 lakh. We give our existing franchisees of Strands salon an option to take up the franchise of our nail bar at the same location.”

Support to the franchisee in terms of training and manpower and strong marketing support and brand name is of prime concern in this segment as well. “Perfect Ten Nails provides technical staff and other sources to its franchisees. We have our own academy to train professionals who work at our franchise salons. The professionals are updated on latest fashion technologies and various mediums like dried flowers, beads and fabrics to enhance the beauty of nails.”

Then there is Simar's Nail Bar with three standalone stores in Delhi. She plans to strengthen its presence in the capital and other cities via franchising.

A person with required investment and apt location can open a nail bar, no experience in the beauty industry is required.

Procure the perfect product

The beauty products business is estimated to be over Rs 3,000 crore, which is growing at an average rate of almost 20 per cent annually. According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), it is expected to grow by 36 per cent in the coming years. As per a recent report, an average Indian spends Rs 1,500 per month on personal care products. India offers vast opportunity in this industry and is one of the largest markets in the world for personal care products.

Lush, a UK-based fresh handmade cosmetics premium brand, already has 12 stores pan India, and plans to further expand via franchising in cities like Chennai and Pune. They are also looking at opening another stores in Mumbai and Delhi. As per Sangeeta Kamath, Official Spokesperson, Lush Cosmetics, India, “With the growing reach of modern retailers and franchisors in rural and urban areas, the penetration level of organised players will continue to grow, resulting in organised retail growth in the next few years.”

With go green concept taking over beauty connoisseurs, business of organic beauty products has a bright opportunity too. Inspired by a few international brands, Mumbai-based bath and body products brand, Nyassa, was launched in year 2007. Nyassa currently has three company-owned outlets and one franchisee in Hyderabad and now plans to undertake a systematic expansion where franchising will play a key role. As per Ishween Anand, CEO, Nyassa, “I first want to take Nyassa throughout India and then set up a global chain.”

Most of the premium beauty product brands expanding via franchising are looking at channels that do justice to their positioning. Hence, malls or high streets, which can be categorised as the cream locations in respective cities, will be ideal locations for them. “We prefer a mall and will continue to explore more areas in this avenue,” says Kamath.

The beauty product sector offers varied benefits for aspiring entrepreneurs. Potential franchisees, fascinated to run a business in this sector, need not worry about the quality products as in case of unbranded product retailing. “Most of the franchisors offer adequate guidance and guidelines for running a successful business to its franchisees. “We provide extensive product and sales training to the franchisees and their staff along with point-of-purchase material. Nyassa will also provide advertising support,” adds Anand.

The holistic way to growth

The domestic market for alternative medicine stands at about Rs 8,000 crore per annum. Ayurvedic medicine alone accounts for Rs 3,500 crore. Presently, the Ayurvedic medicine industry is highly fragmented and unorganised. Increasing government support, holistic approach of minimal side effects and lower costs have created a major shift from conventional to ayurvedic treatments. Presently, there are a few players in the ayurvedic treatment industry who have opted for franchise concept, Ayurvita being one of them. Operating through three company-owned and five franchise clinics, Ayurvita plans to strengthen its network via franchise. As per Dr Vijay Pratap Kushvaha, Managing Director, Ayurvita “We chose franchising for expansion because we wanted an operating system that would allow ownership on the part of the staff operating locations in markets outside our home territory.”

As per him, franchising was also necessary to pass on the knowledge to the consulting doctors in standardising the concept of treatment across all centres of Ayurvita and the unprecedented demand for ayurvedic medicines. Ayurvita is renowned for curing diabetes in a few days' time and for its money back offer on dissatisfaction of patients. At Ayurvita, a patient is diagnosed and treated for obesity and ailments concerning skin, hair, arthritis, diabetes, general debility, men's health, women's health and psycho-somatic disorders.

On training and support to the franchisees, Dr Vijay says, “We are not looking at rapid expansion at the moment. Our motive is clear in terms of providing structured return on investment to our franchisees. We provide qualified doctors, skilled workers and regular training to all our franchisees. We ensure that our franchisee is earning profits from the first month itself, for which we hold promotional events and help in advertising too.”

The opportunities in the ayurveda healthcare industry will increase further, as the sector is in demand worldwide for ayurvedic treatments.

Hair-raising business

Trichology, the branch of medicine that deals with the scientific study of health of hair and the scalp, is another growing segment with bright prospects. Trichology is in its infancy in India but with the increase in the demand, the opportunity in this sector is increasing manifold. The current market size of trichology is around Rs 20 to 30 crore and the penetration level is around 3 to 4 per cent. It is expected to grow at 100 per cent rate in the forthcoming years. There are only a handful of people in the organised sector offering hair treatments.

The treatments offered by the unorganised sector are largely not result-oriented and have side effects. To replicate the successful business model and to cater to a larger clientele, many trichologists are taking up franchising to add volume to the business. The rising awareness about need for hair treatments, growing market potential and lack of an exclusive treatment facility are some of the reasons that have made many players grab the opportunity. Praba's Vcare Health Clinic (P) Limited, one among those players who plan to strengthen via franchise, is an exclusive hair treatment clinic offering treatments for various hair and scalp-related problems.

Presently, Vcare runs 10 branches in Tamil Nadu, Andhra Pradesh and Pondicherry. Says Carolin Praba Reddy, Managing Director, “Though our clinics are located at convenient places in the states, there have been frequent requests from the clients to start branches at new locations. The company has also received requests from clients and business offers from entrepreneurs from states like Karnataka, Kerala and Maharashtra.”

Franchising process is guided by proper documentation and control, the standard operating procedures are helpful in effecting out knowledge and technology transfer, the franchise network is promptly monitored by a franchise team and the operations are controlled through a well designed ERP system, she added. To take up the franchise of any leading trichology clinic, it is not mandatory to be from the same background, as technical training with qualified staff and resources is provided by most of the franchisors.

The spine support

The spine care treatment industry in India has witnessed a major boom mainly due to the increased spending capacity of the Indian population. While the huge population base is the single largest driver of the market in India, the under penetrated silver age population (55 years) i.e. 7 to 12 per cent of the total population, represents the scope for growth in the market. Novel technologies, driven by the need for less trauma and greater motion restoration, are contributing towards the growth of spine care treatment centres in India. The sudden increase in the number of spine care treatment centres has lead to the emergence of franchise centres for spine care treatment.

As per Dr Aslam Khan, Founder of KKT, a spine care centre, “It is not just about expanding without investing much capital, it has a lot more to do with leveraging entrepreneurial capabilities of the franchisees and their in-depth knowledge of the local market conditions, cultural sensitivities and their own goodwill in the market place. Given vast potential of the concept and availability of proven systems and processes, franchising will prove to be a win-win option for everyone.”

For aspiring entrepreneurs, the zeal to step into the services industry is a must, as those without prior knowledge of the domain can also take up the franchise. Most of the franchisors in spine care treatment segment provide ongoing support to their franchisees. “Other than helping them in the project phase and demand generation for the services through a mix of marketing and sales promotion activities, we play a major role in selecting the team at the clinic, both clinical such as physicians, technicians, nurses, counsellors and the administrative staff and their in-depth training on clinical operations and the rest of the service quality aspects,” says Khan. The business opportunity is huge and lucrative, as it has provided phenomenal returns in the business globally.

So, what are you waiting for? The scenario is bright, the opportunity is ripe and the time is just right to capitalise on these unique franchise concepts, which are likely to climb up the ladder of success pan India. Move over conventional business concepts and embrace these relatively young and fresh opportunities knocking at your door.

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