Beauty Salon Parlor Franchise

ORGANIZATION AND STRUCTURE

In a beauty salon run as a sole proprietorship, the principal is most likely female and is often an active hairdresser in the establishment. Such salons are typically geared exclusively toward women and offer a range of additional services, including manicures, facials, and massages. These auxiliary services provide an important part of the income generated by the smaller salons. Both owners and employees of these beauty shops are usually licensed cosmetologists who have attended state-certified cosmetology schools and passed standardized exams before receiving their licenses. Stylists are typically compensated on a commission-only basis or through a salary-plus-incentive plan.

Hair salon chains generally market their services toward families; consequently, they report a larger number of men and children among their clientele. These salons staff a larger number of stylists and primarily offer only the basic services of cutting, perming, and coloring. Stylists in these establishments generally receive a straight salary without any further compensation.

Franchised salons, which are commonly found in such high-traffic areas as strip malls, may be started up by a single entrepreneur or by a group. The franchisee pays the franchise holder an up-front fee, typically between $10,000 and $25,000, and continues to pay a 10 percent royalty on sales. In turn, the franchise holder pays for advertising costs and avails other resources to the franchise unit.

BACKGROUND AND DEVELOPMENT

The service industry of hairstyling dates back to ancient Egypt, Rome, and Greece. Not until the late nineteenth century, however, did establishments geared toward the public begin to flourish. Their popularity was aided by the development of technological innovations that created new demands for hairstyles. These novelties included the use of synthetic and organic haircoloring products in 1883 and the invention of a chemical method of permanent waving around 1927.

Schools of cosmetology were first established in the late 1890s to train students, primarily women, for the burgeoning profession. For many years, small sole proprietorships were standard in the industry. As the purchasing power of working women rose rapidly during the 1970s and 1980s, the industry began to expand and the number of corporate-owned salons increased dramatically.

"...In the Philippines, manufacturers and advertisers are eager to tap into the youth market, especially when it comes to personal care products. After all, the youth market is huge. In 2001, about 57 percent of the population was under 25; 15-24 year olds made up almost 20 percent. Also, "me" products such as cosmetics, haircare, and beauty products do better with youth who are increasingly savvy, product-aware, and more willing to pamper themselves. And they also have more disposable income than older demographics. Plus, their being Pinoy means they will spend more time on their looks than most other people on the planet..."

Every mall in Metro Manila is said to host two to eight beauty salons.

SM Megamall alone boasts eight, including a barbershop offering, aside from the usual haircut, manicures, foot scrubs and hot oil.

According to the 1999 Job Demand Survey of the Levittown Beauty Academy, salon owners receive an average of 174 clients a week. But a chair, a mirror and a pair of scissors aren't the only things you'll need if you want your own parlor.

Lidwina Morales, owner of Lid Salon in Malate, Manila, invested P500,000 initially on equipment and her parlor's interior. Janett Pineda, a franchisee of David's Salon in San Pedro, Laguna, bought the franchise for P2 million and took over the parlor in November 2002.

You need not spend big bucks right away, however. Says Patrick Bishop, author of Moneytree Marketing: "Don't overspend. Buy used equipment or rent a space that was a beauty salon previously, but is vacant and includes all the equipment."

Pick your location well

You must also pick your location carefully. You won't go wrong picking a mall. "You want to cater to all from Class A to C," says Marabelle Kwek, general manager of Color My Hair at SM Megamall. "When we entered Megamall we decided to put up a Class-A salon [that also catered to the B and C classes]. We chose Megamall because it is one of the biggest."

Salon Studio chose Libis in Quezon City. "We spent time looking for a good location and an area that would give us a comfortable size," says owner Leah Gundran. "The first ones we saw had such small spaces. Also, we wanted one near a restaurant so that it would be convenient for our customers to buy snacks in case they got hungry."

It's a good idea to pick an area with lots of foot traffic if you think you'll depend on walk-in clients. Lid Salon did just that. "We target students and these customers come because of our very affordable prices," says salon manager Debra Bumanglag. Her parlor in Manila is close to many schools, government offices and the Robinsons Ermita mall.

Invest in good equipment

It's better to buy good used equipment if you can get it. If you prefer new supplies, shops like Hortaleza and Accessories and Beauty Equipment stock everything you are likely to need. It is also important to buy high-quality shampoos and chemicals for nail care, hair treatment and coloring to please your clients. Lid Salon charges reasonable rates, but does not compromise on quality. "We follow the right formulas and we don't use inferior brands," says Bumanglag.

Train your people

After picking your location and buying your equipment, it's time to recruit good people for your parlor. "They should have the technical expertise especially in hair coloring and styling using international standards as a benchmark," Kwek says. "They have to undergo regular training to update them on new products, hairstyles and customer service."

Ricky Reyes Learning Institute offers a three-month cosmetology course that costs P14,900 and includes hair cutting, coloring, perming, styling, make-up, manicure and facial treatment. The Classic School of Cosmetology in Binondo, Manila, offers short courses in hair coloring, blow drying and scalp manipulation, among other things, for P1,500 to P4,000.

Salon franchises take care of personnel training and provide equipment and supplies. "They take care of almost everythingâ€"even bookkeeping and accounting and the preparation of the payroll," says Pineda. "I just wait for my monthly dividend. It's up to the owner if he wants to visit the parlor once in a while."

It's important to keep your employees happy to avoid high staff turnover. "We give them salaries apart from commissions," says Les Reyes, owner of Reyes Haircutters. "May mga commission sila sa mga cosmetics na ibinebenta nila at meron pa silang tip if they are good." Salon Studio follows a chart system where suppliers reward parlor staff selling their products.

Price your services well

Salon Studio uses celebrities like MTV videodisc jockey Donita Rose and former Binibining Pilipinas-World Daisy Reyes to promote the chain. Reyes Haircutters believes in charging minimal fees for maximum profit. "Dito P49 ang gupit. Ang kostumer mo for one day 50 to 100 head. You made a lot of people beautiful sa presyong P49 lang," says Reyes. "Kapag magaling yung nagha-handle, may personality to educate our customer about the spa and other services, yung P49 minsan nagiging P2,000."

Reyes Haircutters also keeps a Total Quality Standard Team to ensure the chain keeps a high standard of service. "Yung [team] umiikot yan all over the Philippines to check if the standards of all salon services are being followed," says Reyes. "Kung merong mali, doon na tayo magsasabi sa may-ari para sabihin sa manager, ‘bagsak tayo dito o pasado tayo dito'."

He stresses the importance of research to know the latest trends. "Education is very important," says Reyes. "Ano ba yung mga bago ngayon? How do you innovate? Kung di man ako nag-aaral sa school ngayon, I do self-study. Kung hindi, mag-i-stagnate ka."

- by Regina Samson and Michelle Cortes. This article, which originally appeared in the May 2003 issue of Entrepreneur Philippines, a publication of Summit Publishing, Inc. Picture by www.asiatravel.com

FRANCHISING

1] David's Salon

Contact: Marivic Aguibiador, Franchise Manager
Tel:8955717;8909098
Fax:8976564

2] Reyes Haircutters

Contact: Jho G. Barbosa, Franchise Development Manager
Tel:(632) 912-7359
Fax:(632) 913-6252

3] Salon de Manila

Contact: Sonny Mangundayao, President
Tel:893-1309, 816-7920, 817-6627
Fax:891-1025, 893-1308

3] Royale Artista Package

Php P79,000.00 with 3% Royalty Fee and renewalable fee after 3 years contract

Inclusive of:

Trade Name / Logo
Initial Artista Product Inventory worth of Php 10,000.00
Chemicals and Transfer of Technology
Training of Employees with DEMO
50% OFF of All Major Services for Royale Associates

Contact: Peejay at 09176084280

4] Straightforward Salon

Franchise package starts from Php 300,000 complete salon, ready to operate.
Recover your ROI in 6 months.
Installment package also welcome.
Call: 09184296133 for details/inquiries

Training and Seminars:

The Ricky Reyes Learning Institute was established mainly to help facilitate livelihood programs for the youth. Please visit:http://www.rickyreyes.com/