During the height of the pandemic, unemployment rates were at an all-time high and folks were anxious about what the future would hold for their careers and families. Some began looking for new business opportunities that could be more stable and satisfying, while others questioned how to incorporate a better work/life balance.
More and more professionals began seeking a fresh start with franchise opportunities. At the same time, the self-care space saw a significant uptick once the world started opening up again. According to Entrepreneur magazine, in 2021, experts predicted rapid growth in the health, beauty, and personal care industries over the next five years, and investors are taking note.
With the personal care industry on the rise, franchise opportunities like MY SALON Suite offer a less risky option than an independent startup. Franchisees will be given a proven blueprint for success; best of all, you don’t even have to have any prior salon or franchise experience!
But before jumping into a new business venture, you need to know what questions to ask franchisors before making your final decision.
Here are a few questions to get the conversation started:
What’s the Initial Investment?
Knowing your upfront costs is essential when starting your franchise journey. Startup fees cover many necessities, including business coaching, labor, back-office support, marketing, etc.
Depending on the industry, these startup costs could range from $30,000 to over $1 million. There are many factors to consider before counting your cash: the size and space of the building, your market location, the number of buildings you would like to have, the size of each, and the financing terms.
Another great question to ask a franchisor is if they offer financing, as some franchises make that available to investors. The financing can be offered in-house or through a list of preferred financial partners. Having these options can help you get your business off the ground without the stress of higher upfront costs.
What are the Potential Risks?
It’s essential to ask franchisors how their franchise has fared since the onset of the pandemic, the most challenging financial crisis in recent history. Aside from global disaster, what are some other potential risks facing investors, and how would they handle mitigating those risks?
Forbes notes that risks in 2022 could include data breaches, climate change, the great resignation, hiring talent, pandemic problems, lack of inventory, burnout, and inflation. Ask franchisors how they have handled or would handle these issues should they arise. Having a plan in place will help put your mind at ease and ensure you and your franchisor are on the same page.
What is the potential ROI?
This is something you’ll want to ask existing franchisees. While many franchisors include an Item 19 in their annual Franchise Disclosure Document, which details income as reported by franchisees, they are not allowed to predict or guarantee any kind of financial returns on your investment.
However, part of your due diligence in investigating a franchise opportunity is talking to existing franchisees, who are legally allowed to disclose their own financial picture to you. Find out what they’ve been doing to become successful, how long it took them to hit break-even, and how they maximize their revenue potential.
What is the Long-Term Outlook for the Industry?
As we’ve seen in recent years, industry trends have shifted quite dramatically. People’s outlook on life has changed along with their priorities and purchasing decisions.
The health, beauty, and self-care industry show no sign of slowing down. More people are putting their physical and mental health at the forefront of their daily life, offering a positive push toward beauty franchises.
IBISWorld notes that the nearly $47 billion hair salon industry is expected to expand by 16.9% this year alone.
A good question to ask a franchisor is where they get their industry trend information and what the long-term outlook is for their market. Touching on this issue can lead to more productive discussions and strategies for future planning.
Is this Franchise Recession-Resistant?
Our world has seen big changes since 2020, so it’s fair for you to ask the franchisor what would happen if we went into a full-blown recession or lockdown again. How would your business withstand something so devastating, and how would you ensure a profit? Ask the franchisor how they would compensate if they were unable to keep the full support staff on payroll and find out how they would secure enough capital to keep going.
Keep in mind, that people will always need to get their hair cut and styled, so the salon industry remains recession-resistant.
Franchise with MY SALON Suite
Knowing what questions to ask franchisors like the ones mentioned above can help you make an educated decision when investing in a new business opportunity.
With MY SALON Suite, you don’t need any salon industry experience. Our business model is different: you rent private spaces in your suite to qualified stylists. You create a salon complex that can host any number of aesthetic services, from haircuts to waxing, provided by experienced practitioners. They manage their individual businesses while you oversee your own business as a property manager.
Best of all, as a franchise owner you can be involved in this investment part-time. Most of our franchise owners work between 5-10 hours weekly, and many of them hold other jobs.
We have over 200 locations, and MY SALON Suite is the No. 1 franchise opportunity in North America and growing. Ours is an excellent option for someone looking to invest in a growing industry, as we offer a stellar support system, comprehensive franchise training, and a proven strategy for success.
If you’d like to learn more about the franchise opportunities with MY SALON Suite, you can request more info here.