How to Franchise a Hair Salon Business

The hair care business is a big business.  In the U.S., the hair service and product industry produces over $19 Billion a Year in annual revenues.  This is shared between over 65,000 beauty salons and just over 5,000 barber shops.  About 45% of these are franchise hair salons and represent the enormous hair industry segment of franchising.  Why is the hair care business such a big industry even when times are tough and it would seem that most people wouldn’t have the funds or disposable income to spend on having their hair done?

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Number 1:  We care about what we look like.  Since the beginning of time, humanity has been obsessed with looks and vanity has no limits to what people will spend to look their best.  Even in difficult times, people will spend to look good, including having their hair done.

Number 2:  More and more hair salon franchises and hair care businesses are changing the service offering to one that offers a strong value to the customer.  Whether it be the franchised hair care chains like Great Clips or Fantastic Sams which offer $14 hair cuts, or newer chains that focus on the ethnic hair care segment like The Weave Shop, people appreciate value and want a good bargain in services.

Number 3:  The Hair care business is a good, strong, profitable business model in most cases.  A typical 1,100 square-foot salon with about 10 or 11 styling stations typically takes about an $80,000 investment to set up, and once established, will average about $270,000 in annual revenues.  After 18 months, the salon will return 17 percent to the bottom line.  Regis management projects that the hypothetical average salon will have $20,000 in receivables and returning 76.5 percent on a cash-to-cash investment basis.

Number 4:  The growth in Franchise hair care businesses has exploded over the past ten years which has brought big time branding, advertising and business development to the industry segment.  With companies such as Supercuts, Great Clips and Fantastic Sam’s, the national franchise chains have grown to 1,000’s of units.  In addition, more specialized niches in the hair care franchise segment have developed such as Sport Clips, The Board Room and American Male.  Each of these growing franchise hair care brands have developed the market further for hair care services to expand.

The hair care business will continue to grow, this is a service that can never be outsource to another country, people will always want to look good and the business continues to prove profitability and strength as an operating model.

For more information on hair care franchises or how to franchise your hair care business, contact us for a free consultation:  (800) 610-0292 / [email protected]