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Are you new in franchise arena and have several questions regarding initial risks and challenges of this unique business model? Well, here we bring the answers to all our readers' franchising queries via this regular column of expert's advice.
How is funding important to open a salon of your own or to take up a franchise of any brand? Does your brand offers any funding assistance to the new franchisees?
Raghubir Gosai, Varanasi
We know the pain of having a dream and finding your wings clipped because of lack of funding. Funding is essential for any project to take off and sustain in the first few months. As part of our vision to groom India, our tie-ups with various financial institutions ensure that our franchise partners are not short of attractive funding options to start off. Naturals has also secured collateral free loans especially for first time women entrepreneurs as part of their drive to women empowerment.
If I take up the franchise of Naturals Salon, when can I expect 90-100 % RoI?
Varsha Rishi, Delhi
20 % per annum is the average growth rate for a franchisee of Groom India. Most Naturals salons achieve breakeven in 3 months, and you can expect RoI in 3 years.
Apart from hidden costs, what else should a franchisee be aware of?
Teesta Sarungbam, Manipur
The franchise partner should be aware of the competition around the salon. It is always wise to know what other salons are offering and the rates involved. Marketing campaigns need to be appropriate for the locality of the salon, for this a franchise partner should have a clear idea of his catchment area and his or her target market. A franchise partner should also ensure that staff is up to date on latest techniques by ensuring they receive sufficient training and that they try to keep up with new trends through digital media.
The beauty industry is storming ahead despite the inflation and real estate slump. Do you think the business will hit a plateau?
Purvika Sehajpal, Pune
As far as the salon industry is concerned, the growth we are witnessing here is merely the tip of the iceberg. Yes, inflation is rising and the real estate slump is very real, yet grooming is almost a fundamental necessity. Basic beauty and grooming services will never see a downward spiral. No one will stop cutting their hair because of inflation! Also, you generally visit a salon once a month, so you will not worry too much about the amount you spend in the salon. However a person who regularly drinks a cup of coffee from his nearest coffee shop will probably are more inclined to cut back on that particular expense. Similarly, typical retail outlets are affected by rising rental costs, but not so a salon, which is not dependant on ground floor location. So the slump in the real estate market does not really affect us very much. Will this industry hit a plateau? We doubt that very much!
How is franchising better than other business models for fast and better RoI?
Premanad T, Chennai
Franchising helps the brand to expand at a much faster rate. The franchise partner is often able to understand the nuances of local territories far better than anyone else. Since the franchisee has invested his capital in the business, he or she brings ownership to the table and they will leverage the business to maximum potential. The salon industry being a high margin business also helps for a fast and better RoI.
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