The Changing Face of Cosmetic Treatments - How to Break into the Market with a Franchise Business
When it comes to investing in a business, personal skills and experience may warrant a move to entrepreneurship, but not everyone has the big ideas to make it happen alone.
This is certainly refected in Australia, where the current number of individual businesses is in decline and franchising is growing1. Evidently, the franchising sector has a higher chance of success than small businesses2, which can be owing to the advantages that franchising provides. Among many other benefits, owning a franchise gives you: access to an established brand, support of experienced management personnel, assistance with location and set-up, and -most importantly- the use of a proven and well developed business model.
“Popularity of non-invasive cosmetic procedures, such as chemical peels and [anti-wrinkle] injections seems to have intensified during the global financial crisis”
Franchises come in all types and sizes, rising and falling in line with consumer trends. Currently ‘looking good’ has proven to be a top priority for Australians, as spending on fitness and beauty increased in 20133.
The rising star of the beauty industry has been in the demand for non-invasive cosmetic procedures and treatments, including anti-wrinkle injections, laser hair removal, and skin treatments.
By 2015, it is predicted that revenue figures will hit $1 billion, up from $773 million in 20124.
Once considered expensive luxuries for the rich and famous, treatments like anti-wrinkle injections and laser hair removal have become affordable, moving further into mainstream markets to become prominent features in shopping centres all over Australia.
What is Driving the Demand?
There are a number of factors fuelling Australia’s interest in appearance. Firstly, people have more money to spend5 and so can afford to use more of their disposable income on treatments that make them feel better about themselves.
Looking good becomes more important to people as life expectancy and the age of retirement increases6. People are aware that they may still be leading an active lifestyle and working longer, and are therefore investing in preventative measures to slow down aging.
Another factor influencing demand is education. As people are exposed to news and advertisements, especially related to sun damage and aging4 they become comfortable with the concept of non-invasive treatments. As the industry continues to develop and bring out new technologies, treatments have improved efficacy and are no longer as extreme as a surgical facelift. Non-invasive anti-wrinkle and filler injections, for example, can be done on a lunch break, with no recovery time and for a reasonable cost.
What does this mean for franchising?
Like any business, future growth and sustainability is every bit as important as current demand. People often make the mistake of buying a franchise based on its relevance right now, with no thought to its longevity or how it might operate in five or ten years’ time.
Where other businesses in other industries might struggle during times of decreased spending, the nonsurgical cosmetic industry tends to prosper. Much like the “lipstick index” – a phenomenon in which people spend money on cosmetics and other small luxuries to lift their spirits during tough economic times – the popularity of non-invasive cosmetic procedures, such as chemical peels and anti-wrinkle injections seems to have intensified during the global financial crisis7.
How can franchising secure my success?
Franchising is not just about accessing a brand. Starting a new business is a complex process, which must be supported with a business plan for sustaining and growing a customer base beyond the first opening months.
In the cosmetics industry, a good brand with a great reputation is a reflection of quality, safety, value, and customer service. This will get you part of the way to running a successful business.
As well as branding benefits, franchising offers professional support in areas where inexperience can quickly land your business in trouble. From business planning and strategy, to site selection, legalities and operational management and marketing, successful franchises have tried and tested all of these elements in a business model that works and will continue to support franchisees as they grow.
Laser Clinics Australia
Laser Clinics Australia (LCA) is an industry leader in the field of laser hair removal, cosmetic injectables and skin treatments, performing over 870,000 treatments in 2014.
As a result of rising demand, they have plans to expand in 2015 with the help of suitable franchisees that are passionate, driven and ready to become part of this fast growing industry.
Since opening in 2008, the business now has 45 stores nationally, growth that earned Laser Clinics Australia first place in the BRW Fast Franchise 2013 list.
As a LCA franchisee, you will benefit from all the necessary elements which make up a good franchise, whilst being moved forward by the innovation and drive that has seen LCA rise above its competitors.
As testament to its stability and perceived future growth, LCA are partnered with private equity firm Archer Capital Growth Funds, who will provide strategic, financial and operational support to the business as it expands. This is a unique opportunity for franchisees to gain entry into what is a lucrative industry, entering into a joint venture with LCA where you will be in business together- not simply buying rights to its brand.
If running a successful business in one of Australia’s fastest growing industries sounds like the profession for you, then click here to download a copy of the LCA franchise booklet and register your interest.
1. Frazer, Lorelle and Weaven, Scott, and Grace, Anthony, Grif?th University, Franchising Council of Australia, Franchising Australia Report 2014, http://www.franchise.org.au/images/FranchisingAustralia2014_webversion.pdf
2. Davidson Institute, ‘To Buy or Not to Buy a Franchise’, 21st November 2011, https://www.davidsoninstitute.edu.au/learning-centre/business/articles/to-buy-or-not-to-buy-a-franchise
3. CommBank Signals, Commonwealth Bank of Australia, “Australians hunting for a healthy deal as spending on maintaining our health exceeds $2 billion2 per year” https://service.commbank.com.au/images/content/commbank/signals/index.html#
4. Society of Cosmetic Physicians Australasia, ‘20-somethings opt for cosmetic anti-ageing treatments’, June 2013, http://www.cosmeticphysicians.org.au/pdf/2013/Media_releases/CPSA_survey_media_release_-_FINAL_-_website.pdf
5. Trading Economics, ‘Australia Disposable Personal Income’, http://www.tradingeconomics.com/australia/disposable-personal-income
6. Collett, John, Sydney Morning Herald, ‘We’ll just have to keep working for longer’, http://www.smh.com.au/money/super-and-funds/well-just-have-to-keep-working-for-longer-20131119-2xrqf.html
7. Lindhe, Jane, BRW, ‘Pro?ting from vanity in tough times’, 25th October 2012, http://www.brw.com.au/p/sections/features/pro?ting_from_vanity_in_tough_times_NB4W197RRtwymKYGne6VkM