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Mar, 07 2014

From spa to success

Do you often love to avail a spa service for relaxation? Well, the same spa centers can fetch you an apprising business with assured returns. Read on to know more about the benefits wellness industry can offer to potential entrepreneurs.

The origin of spa dates back to some 45,000 to 50,000 years with ayurveda and siddha. It has served mankind through the ages offering cures for many human ailments. It also lays stress on leading a healthy lifestyle to keep off diseases. In doing so, this ancient science of healthcare has withstood the test of time managing to carve out a niche for itself in modern wellness and healthcare. The growing popularity of different types of spas in recent times may be attributed to the efficacy of its treatments in providing relief to clients dealing with stress and other lifestyle diseases. The spas don’t only help in relieving the anxiety and stress out of a person but the business offer a profitable opportunity to doctors as well as non- doctors as entrepreneurs.

Robust market

Spa’s popularity in India signifies the system that has bright market prospects. This can be gauged from the market size that spa industry enjoys today. The demand of spa services in India has been increasing exponentially in recent years. Consumers are becoming more objective that has led to evolution of concept of grooming and beauty for both male and female segments in order to enhance their appearances.

The Indian market of spa and wellness is witnessing great transformation in terms of locations too. Preferably, the spa owners have started penetrating into tier-II and III cities as these markets provide similar potential as their counterparts in the metros. Not only this, the spa and wellness centers are also exploring new venues for rejuvenation like malls, airports and hotels in different formats and models. These may vary from 15 to 30 minutes foot massage express spa to a day spa, or from medi spa to ayurvedic panchkarma center, preferably suiting upon the customers.

According to recent FICCI PwC study, the wellness market in India is about Rs 490 billion and wellness services account for 40 per cent of this market. Spas, alternative therapies, ayurveda treatments and beauty services are expected to grow by 30 per cent. Despite the current economic slowdown which has impacted several sectors, the Indian wellness services market is expected to remain optimistic and has the potential to sustain its annual growth.

 

Opportunities in store

The beauty services and spa industry of India has been witnessing increased number of domestic and international players in the market. The growth showcased by the industry has also caught the interest of investors who are seeking spa franchises for expansion plans of businesses in the segment.

Talking about the players in spa industry, The Four Fountain Spa has established its  market and organised network of spa centers pan India via the franchise route.  The brand boasts of offering the best services and spa therapies by the trained staff along with lucrative business opportunity to entrepreneurs with assured returns. Anurag Kedia, Director, The Four Fountain Spa says: “All recruitment and training for employees during the launch and later on is managed completely by the brand. The franchisees also undergo a structured training programme to learn the business even before the spa is operational. Apart from this, the franchisee will be offered support for sales and operations of the store, marketing, recruitment  and  training of the staff.”

He further adds: “Franchising is  allowing us  to  reach out  to  a large  set of  audience  at a pace faster than what we would have otherwise achieved through company operated spas. Since the time we launched our first  spa, we have had an active interest  from potential  franchisees. In the beginning we were a little  sceptical  about  whether  franchisees  would  be  able  to  maintain  the  right  brand  standards.”

Franchising at its best

Today, a lot of companies, small, medium and big are looking at expanding their businesses all across the world via the franchising route ranging from different investment slab.

Vikram Bawa, Director, Strategic Expansion & Franchising, IOSIS is of the opinion: “We ensure that we have a detailed and rigorous process of screening and reviewing the prospective franchisees. In our module, even if the franchisee is not from the industry and is not aware of the health and beauty business, we have no issues therewith. We provide complete management support and training to the aspiring individuals so that with their high level of enthusiasm and inner drive they make their dream a success.”

For almost all spa brands, if the prospective franchisee does have knowledge or experience in the wellness industry it is always an added edge as they would understand the industry better and provide better local support.

Bawa adds: “In a franchise model of business, it is very important to have franchisees with the right kind of mindset and willingness of taking the brand and business forward as a team.”

Challenges to overcome

The beauty salon and spa industry like any other industry faces certain challenges. Some of these challenges that are plaguing growth potential are lack of skilled manpower, unorganised training institutes, increased operational costs, etc.

Talking about the challenges in the wellness industry, Rajan Bawa, MD, Spa Treat says: “As far as our manpower is concerned we have sub divided it into the following categories. hair stylists, beauticians and body spa therapists. We provide one celebrity hair stylist to each of our franchisees. For beauticians, we provide in house training in Bhopal and our body spa therapists are further classified into three sub categories that we provide to all our franchisees.”

Apart from these, Spa Treat also faced challenge of initial funding, for which some financial institutions came forward in good measure and gave wings to the dreams of the brand.

 Growing together

All the spa and wellness centers are looking for aggressive pan-India expansion and seek out franchisees with a strong business background, good management skills, attention to customer service, and sales skills for successful business.

As per Anu Kumar, Director, Gold Leaf Spa: “We feel wellness industry lends easy  process to success via franchising as it growing at a CAGR of more than 18 percent and is the most risk averse industry.” She further says: “We ensure that our therapists give consistent and repeatable customer service. We train them in-house in all aspects including technical and soft skills. Our therapists are taught by lectures, practicals, role-play and specially in the area of soft-skills by going to various hospitality businesses and observing.”

However, IOSIS envisions to spread wellness in all parts of India and are looking for rapid expansion across the country. The franchise route is the best possible way and hence the brand has decided to opt for the joint venture partnership and franchise route wherein the local franchise partner manages the responsibility of the mentioned issues.

 

Franchise facts:

Name of the brand

Investment (Rs.)

Area  (sq.ft)

RoI

Breakeven

The Four Fountain Spa

50 – 60 lakh (Including rental deposit & working capital)

1200 (carpet)

40-50 %

operating breakeven in 6 months / payback period 3 years

 

Kaasha Spa

-

1500

30 %

15months

Spa Treat

15- 20 lakh

1000

100 % in 10 months

from 1st day

Gold Leaf Spa

20 - 50 lakh

500-1200

1.8 - 2.5 years

4-6 months

Buddha Body Spa

34-54 lakh

700-1000

76-108%

-

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