Unit Performance Report: Franchises in the Beauty Industry

Summary:
This report compares ten systems in the beauty industry: five in the tanning centers sub-sector and five in the hair care sub-sector. FRANdata examines the initial investment, unit financial performance and the ongoing fees of the systems.

The average initial investment for the sample is $337,065. The two sub-sectors display a significant difference in their initial cost estimates: $196,619 for the hair care and $424,844 for the tanning sub-sector. The higher costs of the latter are due to large tanning equipment expenses. In fact, tanning and related equipment is the largest item comprising initial investment for the tanning sub-sector. Leasehold improvements is the largest for the hair care sub-sector.

The large initial investment for the tanning salons impacts the initial investment per square foot measures. At an average of 2,000 sq ft, the tanning sub-sector's average unit size is 58% larger than the average of the hair care units, at an average of 1,270 sq ft. The tanning sub-sector's average initial investment per square foot is 55% larger than that of the hair care sub-sector, or $240 vs. $155, respectively.