The Pros and Cons of Investing in a Beauty Franchise


The beauty industry is one of the few industries that seem to survive both good and bad economic times. This is because of the hype and glamour around the industry, especially from celebrities and bloggers. If you have an artistic background and have always wished to venture into this industry, franchising provides a perfect way to bypass all the hurdles of starting a new business.

The beauty industry is built on trust between the customer and service provider or seller. However, for customers to trust you, you need to have a proven record of integrity, and this is where franchising comes in handy. The franchisor allows you to use their name, logo, and products that customers already trust for a small percentage of your gross sales. Before you invest in a beauty franchise, here are some advantages and disadvantages you should know about.

Advantages of investing in a beauty franchise

Immediate brand recognition

As mentioned earlier, trust is very important in the beauty industry. Therefore, by investing in a salon or beauty franchise, you will be buying into a recognised and established brand name that customers love and trust. You will instantly win the customers’ attention and benefit from repeat income streams as customers will keep coming back.

Self-care will always be in demand

Even in tough economic times, people put priority on looking good. The hair and beauty industry continued to experience an increase in growth even in the most difficult economic times, and this goes to prove that this industry has the potential to be a recession-proof investment.

You can go mobile

One of the biggest benefits of investing in a beauty franchise, especially a salon franchise, is that you can easily offer mobile services. The start-up costs for a mobile salon business are much lower since you don’t have to invest in a physical shop. Also, working around you and your clients’ schedules gives you more flexibility and helps build long-lasting professional relationships that increase brand loyalty.

Investing in a proven system

While the beauty industry is very profitable, it is also very competitive. If you choose to start your own business, you are likely to make many mistakes in the beginning, but by franchising, you can avoid these mistakes. You will be investing in a well-designed system that works to ensure your business succeeds. Your franchisor will have done all the heavy lifting for you; they will give you their business plan and offer you guidance so that you don’t make the same mistakes they did.

Easier to finance

Getting a loan to expand your business is much easier when you are running a franchise. Lenders consider franchises less risky investments compared to startups because they use a proven successful system. This, together with any demonstrated business success, will increase your chances of getting higher funding for your business.

Disadvantages of investing in a beauty franchise

High start-up costs

The initial costs of buying into a franchise can be very high in some cases. Sometimes, these costs are higher than what it would cost you to start the business on your own. The franchise fee will take up a considerable amount of your liquidity, which is an issue for most franchisees.

Abiding by the franchise’s rules

As the owner of a franchise, you will have some autonomy in how your business operates, but you will also be required to follow the franchisor’s rules, system operations, and directives. Because the franchise company already has a predetermined brand, they have restrictions on what kind of products you sell, which suppliers you use, etc. These restrictions can be very limiting for a creative industry, so ensure that you can abide by the set rules and regulations.

Regular royalty payments

Apart from the initial franchise fee, you will have to make regular royalty payments for using the franchise company’s name and system. The franchisor collects a small percentage of your gross earnings every year, but as usual, the amount varies from one company to another.

If you’re looking for franchise opportunities in the beauty industry, then there are a wide range of resources available. Before investing in franchise opportunities, it is always important to carry out due diligence and speak to a franchise consultant and legal advisor beforehand.

Written by Megan Taylor
Megan is a beauty expert who is passionate about all things makeup and glam! Her love for makeup has brought her to become a beauty pro at Glamour Garden Cosmetics.