Cosmetic franchises have been around for decades. For example, makeup retail franchise Merle Norman began in the early 1930s.
Cosmetic franchises are primarily retail businesses that specialize in makeup, skincare, fragrances, toiletries and other personal products. However, there can be quite an overlap with service providers such as hair and beauty salons. Tanning and waxing franchises can also fall under this heading.
Per reports, cosmetics is the third biggest beauty market segment in the U.S. beauty market, behind only haircare and skincare (the latter of which is sometimes combined in some counts with cosmetics). According to Precedence Research, the global cosmetics market is anticipated to reach $560.5 billion by 2030.
When it comes to the United States, specifically, beauty, cosmetics and fragrance stores (franchised and not) are currently a $29 billion slice of the overall industry, per market research company IBISWorld (as of April 2022). One of the biggest driving factors in future demand is expected to be a continued emphasis on organic and more environmentally-friendly products.
The biggest trend in the industry, at present, is a major shift to online sales. According to some estimates, online sales could make up as much as 48% of total sales by 2023. The dramatic shift away from traditional brick-and-mortar store shopping can be directly linked to the COVID-19 pandemic and its resulting shutdowns. According to McKinsey, nearly 85% of all beauty product shopping took place in brick-and-mortar shops pre-COVID-19.
To maintain relevancy, many franchises have already developed e-commerce platforms to help their franchisees establish an additional lucrative revenue stream to supplement their in-person efforts.
Eyelash and Eyebrow Franchises Still Growing
Over the past decade, an area that has experienced a significant growth in franchise opportunities has been the eyelash and eyebrow space.
Eyelash extensions are synthetic fibers that are attached to a client’s natural lashes in order to get a longer, thicker lash and curb the usage of makeup products like mascara. Customers typically can choose from a variety of styles, lengths and curls to create their desired look.
Relatedly, eyebrow franchises are also increasing in scope.
Eyebrow services, particularly threading, has become popular as mainstream beauty care. Eyebrow threading is a form of hair removal in the same vein as waxing or plucking. It done by using a thin piece of thread to remove and shape eyebrow hair.
In addition to the fact that health and beauty franchises such as these have sustained well even through relatively down economic times, the wide potential customer base for these kinds of services is seen as a plus to many prospective franchisees. “Lash extensions appeal to all women,” says Heather Elrod, CEO of Amazing Lash Studio. “We have members who are 20 and our oldest member on record is 83.”
Recurring business is a hallmark of this type of franchise. Although lash extensions can last for months with the right care, beauty experts recommend that customers get a touch-up every few weeks. Similarly, eyebrows also require touch-ups every few weeks to maintain the desired shape.
Importance of Atmosphere
Like so many other franchises have shown in the health and beauty industry, dedication to creating an appealing atmosphere is paramount to maintaining and growing business. As Michael Blair, co-founder of Deka Lash states, a lot of work goes into the experience a customer has during each visit: “From the modernized studio design to the music, the ergonomic beds, and even a custom aroma inside the studio, it is all designed to be a WOW experience.”
Eye Towards the Future
Beyond the look and feel, when looking for a franchise within this branch of the industry prospective franchisees need to be sure the service offerings of the company now and for the future align with their vision for their career. Some franchises, like Deka Lash, are currently content with one area of focus. “Our brand is unique as we focus on being experts at one thing, eyelash extensions,” Blair says.
On the other hand, others, like Amazing Lash Studio, started small then diversified their offerings into brows (shaping, tinting, etc.) after building their foundation. And others, like Idolize Brows & Beauty, have had diverse service offerings since the beginning. In addition to lash extensions and additional lash services, the franchise also offers eyebrow and facial threading, full body waxing, and facials. As does Touch n Glow, which offers eyelash extensions along with eyebrow threading and tinting, henna tattoos, luxury facials, makeovers, skincare products, and more.
Initial Investment and Opening Costs for Cosmetic Franchises
The amount necessary to open a franchise varies depending on the unique business system and execution requirements. The initial investment required for a cosmetic franchise can vary, mostly due to the real estate requirements of the franchise opened.
Our franchise profiles will present you with a basic range for the initial investment or minimum cash required to open a franchise. But when it comes to finding out the details of an initial investment, the FDD is the best place to look. Franchisors offer itemized estimates in their FDD based upon their experience establishing, and in some cases operating, units.
Keep in mind these estimates are just that, though—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Ongoing Costs for Cosmetic Franchises
Don’t forget about the additional costs required for nearly all franchise businesses. This includes expenses such as royalty fees, marketing fees, software fees, training fees, and more.
The most common is the royalty fee. Royalty fees are assessed for the continued use of the franchisor’s trademarks and patented processes, along with certain types of operational support. In addition to regularly assessed fees, other fees are charged on an “as needed” basis such as audit fees, or costs for additional, non-mandatory, training.
It’s important to note that while many initial and ongoing costs are detailed in the FDD, there are some costs inherent to business ownership, like employee wages or utility costs, that aren’t.
You can also check out many more Health & Beauty Franchises here on Franchise Direct, such as: Spa Franchises.