Hair Salon Franchise - Good or Bad Choice?

A Look at Hair Care Franchises

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Firstly I want to clarify that all franchises in the hair care industry are different so this will be a general look at the business. What I say may or may not be applicable to your particular franchise situation.

Most salon franchises are created with the passive investor in mind.   So in most situations you can own a salon and keep a job or other business in conjunction with owning the salons. This is unlike many food service franchises that require a hands on owner actively working in the store. So that's a good thing right? I can just sit back and earn money? Not necessarily.

Hair Salon Franchise ReviewThat benefit can quickly become a disadvantage if you live in an area that makes it difficult to find and retain good staff. Without a good manager and staff to run your store you can quickly find your location becoming locally unpopular. And with the advent of online review sites like Yelp, Google  and Angie's List it is critical to keep customers happy and your reputation stellar so the ability to find and retain good staff is critical.


Hair Salon Passive Ownership

Now hair salons are typically not huge moneymakers if you own only one store. For that reason some hair franchises require a minimum commitment of 3 locations. But remember that this is essentially passive or semi passive ownership, so financial returns should really be compared to stocks, bonds or other type of investments not other franchises that require full time participation of the owner.

As you are paying someone to run the store money that would have gone in your pocket is traded for freedom of passive role ownership.

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As with other retail type franchises you will be very much at the mercy of the location of your shop. So do your homework of how many other competing salons of the same or different franchise there are nearby.

To try and differentiate within the market several hair franchises have focused on niche markets like kids haircuts, or men only salons. And this can be a way to attract a specific demographic but remember will also cut down on your pool of potential customers in your region.

Here are a couple of the things we suggest to our own clients who are exploring buying a hair care franchise, first check the FDD for failure rates. How many have failed and are these failures mostly found in certain territories. Some franchises do very well in certain states and not so well in others.

Next up - if the FDD does not indicate an earnings claim in their item 19 of the FDD, call other franchise owners.  All their names are listed in the FDD. Among other questions see if they will give you an idea of their earnings first, second and following years. After a few calls you should begin to see a trend. And don't forget to call a few that left the franchise to see what happened in their situation.

If you haven't heard of a SWOT analysis now you have. A SWOT should be done really for any business you intend to open. It stands for "Strengths, Weaknesses, Opportunities and Threats" and it is these 4 things you will explore in your own proposed territory.

Look at how much your prospective franchise is charging then call other salons locally. How do those prices compete. remember higher prices aren't a bad thing only in economically depressed areas. Check the local review sites. Are the competing salons filled with bad reviews? Then you might have an opportunity to inherit people looking for a reliable salon.

If you are wondering if it would be hard to find employees at the proposed pay scale - place an ad! It takes 5 minutes to place an ad in Craigslist or Kijiji  saying I am opening a salon in the city looking for stylists, managers, whatever you will need and the money you will pay. That response is likely a decent indicator of labor market conditions.

So a Hair franchise can be a good choice for a passive investor who has the money to open several units. Some of the niche salons can also work for an owner operator and generally provide a higher average income. works with most of the top hair care franchises as well as other passive ownership models. We can help you identify research and compare which one might be best for you. There is never a charge for our service and your franchise will never cost more by using a broker.  We work with over 600 franchise brands. is a better way to buy a franchise. Learn more about 

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