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Oct, 12 2010


FAST and furious, slow and steady, moderate and mellow, a franchise business grows in various ways for various reasons. But the end goal is always the same: profitability. And to be profitable in health, beauty and fitness industry requires all the more s

FAST and furious, slow and steady, moderate and mellow, a franchise business grows in various ways for various reasons. But the end goal is always the same: profitability. And to be profitable in health, beauty and fitness industry requires all the more skills as it's a service-oriented trade. Let's take a look at some key areas of challenge a franchisee has to face and how to overcome them.

Keeping customer satisfied

In a service business like health, beauty and fitness, meeting customer expectations is a major challenge that every franchisee faces. Customer satisfaction is considered the key differentiator and it is gradually becoming an important element of business strategy. It can be ensured by offering quality services and good pricing structure. Good service can be accentuated be employing well-qualified manpower to assure that the customers are treated in a good way. Sharad, Master Franchisee of Jawed Habib, a market leader in hair styling and beauty industry, feels, “Convincing the client about the services is the main challenge faced by our franchisees. For overcoming such situation, Jawed Habibs provides complete training and support to its franchisees for carrying out the operations successfully.”

Anurag Kedia, Director, The Four Fountain Spa's, India's first chain of affordable spas,  elucidates, “The franchisees often get attracted by the glamour of the spa industry and do not realise that it requires lot of hard work to ensure customer delight. For franchisees who are keen to operate the spa themselves, we provide extensive classroom and on-the-job training, which allows them to learn the nuances of the business. Apart from this, there are continuous quality audits and visits from the corporate team to smoothen the process of operating a spa.”

Fulfilling clients' needs and satisfying them is a key challenge faced by the franchisees. At times, it happens that the franchisees are unsuccessful in satisfying the customer. In such case, the franchisee must pay a great deal of attention to client handling and try to build up a good customer base by offering discounts or other packages to boost business.

“In the fitness business, your clientele depends on the location you are in. We have women from diverse strata in all our gyms, hence offering standardised service can be quite a challenge. We are able to maintain standardised operations with a little bit of adapting per centre,” says Chandra Gopalan, Director, Contours International, India's first international women-only chain of gyms.

Offering identical services

In the franchising business, replicating the brand is easy for any franchisee but ensuring uniform operations in all the outlets is a big challenge. Each franchisee has to ensure that the brand name is not devalued and therefore, it is essential to follow the standards as suggested by the franchisor. To offer uniformity of operations, the franchisor provides them complete guidelines for maintaining quality standards of the trademark. To ensure that quality measures are sustained effectively by the franchisee, the franchisor conducts timely audits to check that everything is being done properly. For instance, Shahnaz Husain's franchisees are expected to complete beauty diploma course as well as a post-graduate course, in which the franchisees receive professional training in beauty specialised Shahnaz salon treatments as well as Shahnaz Husain products.

Dealing with unorganised players

Neighbourhood beauty parlours/salons/diagnostic labs in every nook and cranny pose a major threat to the established players by rendering services in an unhygienic ambience at reasonable prices. On this, Dr O.M. Manchanda, CEO, Dr Lal PathLabs, a diagnostic service eprovider, enlightens, “Dr Lal PathLab's competition is with many smaller labs. These labs indulge in unethical practices by giving commission to referring physicians. We don't follow these practices; neither do we provide margins high enough to part with the market. To counter the above, we encourage our franchisees to focus on the value Dr Lal PathLabs brings on the table.”

He adds that reports can be downloaded from the internet as well. Dr Lal PathLabs deliver the reports within the committed time frame. They have set up a state-of-the-art customer care cell to attend to any queries the customers (internal as well as external) have.

According to Carolina Praba Reddy, MD, Vcare, “The key challenge in this segment is the competition offered by the unorganised sector. Though the treatments offered by them are not result-oriented, they offer stiff competition in case of pricing. The awareness programmes sponsored by Vcare have created greater awareness among public about the genuineness and success levels of the trichological treatments. These programmes are greatly helpful in alleviating the threats offered by the unorganised segment.”

Employing manpower

It's your salon/centre's faculty that reveals your brand and they are also the one who get in touch with the customers directly. It is obligatory for the franchisor to pick and employ the right staff with utmost precision. As per franchisor's policies, the franchisee appoints the staff for his/her salon/centre on the basis of their educational background and professional experience in the beauty/fitness/wellness or any other service sector. Moreover, it is not only the franchisee's sole responsibility to recruit and train the newly hired faculty members, franchisor also plays a major role in giving the training to the franchisee's staff at the corporate office.

Whether it is the franchisee or the franchisor, recruiting trained workforce is not a child's play. Besides managing the day-to-day operations of the business, the franchisee remains on his toes from hiring to training and building strategies to retain staff. In most cases, the franchisor lends a support to the franchisee by recruiting the staff for his centre during the start-up phase. In case of Jawed Habibs and Shahnaz Husain, they have their own training academies of hair styling and beauty training.

On hiring an experienced manpower, Shahnaz Husain, Founder, Chairperson and Managing Director, The Shahnaz Husain Group of Companies, informs, “Our staff in the beauty salon, beauty training academy, shops and counters are professionally qualified/trained in beauty and our products and treatments. We lay a great deal of stress on professional qualifications.”

Retaining staff

Since manpower retention is a key challenge for any franchisor in the services sector, they undertake various steps to overcome the problem. It is evident that companies are aware and are experiencing complexities in attracting, recruiting and retaining high caliber employees to deal with the situation of staff crisis. Hiring the staff is not a major challenge but retaining them is. Says Gopalan, “We train the staff regularly and give them handsome incentives, based on their performance. This is a good way to retain them.”

The biggest threat in the services sector in specialised categories like salons, wellness or fitness centres is the lack of trained staff. For instance, it would be rather easy for the franchisor and the franchisee to get the right staff in tier I city but in tier II, III and IV cities, the franchisee sometimes faces a crisis. Retaining fitness trainers, beauticians, hair stylists, technicians and pathologists with good talent and brand satisfaction become very difficult for the franchisee. As per strict guidelines of the franchisor, the franchisee is entitled to employ desired/minimum number of staff. When it becomes intricate for the franchisee to maintain the desired number of staff members at his/her centre, the franchisor comes into action to give the required support to the franchisee. The franchisee's responsibility is to hire the spare faculty in advance to deal with the situation of staff crisis. To be on the safer side, staff retaining strategies must be employed by the franchisor at the grassroot level. States Kedia, “We offer competitive salaries and an incentive structure, which help top performers in earning significantly higher salaries. Policies are framed to ensure that the employees' interests are protected and the company makes exceptions whenever a genuine case comes up.”

Site selection, negotiation

Exploring right location with right real estate rental is one of the toughest jobs for the franchisees. Therefore, they must tread ahead carefully to search the right space by reviewing the target customer's profile and preferences, demographics of the particular area, disposable income, closeness to competitors, availability of malls/high streets, parking availability, etc. They should consult the existing franchisees on as to how the franchisor helped them in finding and negotiating the location, taking permits/licences for owning the space, etc. The location should be easily accessible through public and private transport and should be spacious enough to accommodate maximum consumer footfalls per day. Sangeeta Kamath, Spokesperson of Lush India, UK-based fresh handmade cosmetics brand, says, “Getting the ideal retail space is any retailer's biggest challenge. Our franchisees are required to shortlist four to five properties in advance and in the end, it is the franchisor's take on picking the best location for brand expansion.

Franchising the way to go

To assure that the brand is not depreciated by the franchisee at any cost, the franchisor provides full training and support in the pre-launch and post-launch of the salon/centre to maintain standardised operations. On this, Gopalan says, “We assist franchisees in site selection and staff training. Staff training is done by us at our head office in Bengaluru for over 10 days. All assistance in setting up gym is provided by us. Marketing ideas are given by us for franchisees to implement. Brand advertising is done by us. Our franchisee needs to do small local promotions in their area for memberships. Constant update on the product is provided by us with refresher training courses. Support is provided 24/7 via email, phone, news letters, etc.”

Husain adds, “Our franchisees are required to have standardised interiors, equipment and a commitment for positive customer experience. The franchisee is provided with necessary assistance in site selection, project management, layout and interiors, marketing and all standard operating procedures, equipment sourcing, trouble shooting tips, product planning, etc.”

Since health, beauty and wellness sector is extremely competitive, it is imperative for the franchisee and his/her staff to keep themselves abreast of the latest trends catching up in the industry. The franchisor needs to take stride towards augmenting value-added services to fulfill customer's demands. In order to win customer's belief, the franchisee also needs to focus more on delivering quality services with dexterity to bring in more customers.

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