Scalp Micropigmentation And The Power Of Franchising
There are many ways to enter the scalp micropigmentation industry. Some may be better than others, but as the market is growing at rapid pace, provided you get the fundamentals right, you have a fighting chance of success no matter which route you choose. It is however easy to feel overwhelmed, and many would-be technicians fall at the first hurdle because they simply don’t know where to begin.
Franchising, whilst it may not be right for everyone, offers a potential solution. Removing the uncertainty from your fledgling business, a franchise leaves you free to do what you do best. There are, however, downsides and obligations that must also be taken into account.
Franchising versus licensing
First off, the legally binding contract you sign when you join an established group or company might not necessarily be a franchise contract in the strictest sense. Many businesses, not just those in the scalp micropigmentation world, prefer what is often referred to as a licensing agreement instead. Why? Because for a company to offer a true ‘franchise’ package, it must adhere to certain guidelines. These guidelines may not be commercially viable or attractive to the franchisor, or indeed the franchisee, depending on where in the world the two parties are based. For the sake of ease we’ll refer to this option as a franchise, but don’t be surprised if the contract you actually sign is a licensing agreement rather than a franchise document.
How exactly do franchises work?
All franchise agreements, no matter what industry they may operate within, ultimately share a number of common traits. The brand owner (franchisor) gives the startup company (franchisee) the tools they require to emulate the success of the established company. This includes use of the brand itself including any trademarks and intellectual property assets, plus direct sales or referrals derived from marketing activities carried out by the franchisor, as well as training, equipment, consumables and other items needed to operate the business. The franchisee is usually granted exclusivity within a certain geographic territory, or sometimes within a specific market segment. In larger franchise networks, hierarchies often form with master franchisees managing the requirements of regular franchisees in their territory.
Ultimately it means that rather than starting from scratch, you’re buying into a proven system with established branding, awareness, reputation and marketing already in place, with a team at HQ ready to support some of your key challenges and requirements. Therefore, in theory at least, your business stands a better chance of long term success.
Why do big brands offer franchise packages?
Quite simply, because it enables them to grow their company and/or brand at a faster pace than by self-expansion alone. It takes a very agile (and brave) business to open 50+ locations per annum, however such stratospheric growth is often feasible through franchising.
The other major benefit to the franchisor is the ability to capitalize on your local knowledge or language. For example, no-one knows Seattle like a person who lives, works and grew up there. Let’s say you’re based in Portugal. Does the larger company really want to add a Portuguese language barrier to its list of challenges, when it can simply partner withi someone who speaks the language and understands the local culture?
What to look for
In the scalp micropigmentation industry, the key factor is marketing muscle. If you’re just starting out, you might not realise how difficult it can be to find customers. Even a technician with a strong personal reputation will find it tough a few months after striking out on their own. Having the support of a larger organisation that can provide even just a trickle of customers can make all the difference, as it only takes a handful of customers each month to turn a profit for the average scalp micropigmentation clinic. This can often remove the immediate financial pressure, a vital advantage that enables you to focus on growing your business more proactively and productively.
Look to partner with a business that offers a strong marketing presence. Just having a website isn’t enough. That website needs a large volume of traffic from people who are genuinely interested in scalp micropigmentation, either through natural Google search results, Pay Per Click, Facebook advertising or whatever. Also consider the reputation of the company. It is no good partnering with a business that has a poor reputation.
How much does it cost?
It is simply not feasible to detail the fees here. The exact fee structure depends on the franchise opportunity, and terms are often highly individual, even within the same franchise network.
As a general guide, you can expect to pay an up-front franchise fee, plus a monthly or quarterly royalty or licence payment. You may also be asked to buy fixtures and fittings, equipment or contribute towards marketing costs in addition to the above costs.
Scalp Aesthetics offers a training and licensing agreement that follows a slightly different format. You pay a small setup cost, then a fee for each client you treat. See our training page for more information.
What about going it alone?
Of course it is possible to start a small scalp micropigmentation clinic independently and achieve success. Companies such as The Shadow Clinic in Australia and Good Look Ink in Minnesota have proven it is possible to operate successfully without the backing of a major player. There is also a distinct advantage in running a business independently without the requirement to pay franchise fees. Consider, however, the challenges that lie ahead:
- Without effective marketing, you have no customers
- You must source your own needles, inks and other materials and equipment
- You have no hands-on support. This is a big deal, especially for those who have no prior business experience
Franchising is not right for everyone, however if you have little experience in running your own business, aren’t confident that you can win enough customers on your own, or want access to a particular brand or marketing vehicle, it is an option well worth considering.