By Cheryl Whitman
 
The spa industry has grown from day spas to destination spas to the latest member of the family: the medical spa. While fairly new to the aesthetic industry, medical spa franchising opportunities abound for physicians interested in starting a new business or expanding a present one. 

But, unlike the regular spa business, where treatments and services are pretty much of the aesthetic variety and governed by the cosmetology boards of most states, medical spas are setting sail into uncharted water. The laws regulating medical spas are changing everyday to address the sometimes gray area into which some of the services fall. To practice medicine in these locations, you need to take into account state laws, as well as state medical boards.

So, one of the first things you need to know about franchising is whether the contract covers the legal requirements of your state. Sometimes franchisors have cookie-cutter contracts to make the business one-step and easier. The franchisor needs to be willing to change those contracts to meet your requirements. Make sure that your attorney takes a good hard look at the contract so that you are protected.

But let’s look at some of the other questions that medical spa owners have about going the franchise route:

Q: Isn’t it just much easier to franchise?

A: The answer to this depends. Yes, franchising is easier for a specific kind of person. When you franchise, however, you do give up some of your creative license. It’s easier if you don’t mind that your facility looks like another one that may be right in the same town. It’s easier if you don’t mind offering the services and treatments that are de rigueur under the franchisor.

Some people are more comfortable having these details decided for them. Those people may be more entrepreneurial—looking for an investment or they want to free up their time for other tasks within the office.

Franchisors also offer staff training, and often will help with the hiring of that first group of staffers. This can be a tremendous benefit for a small business owner who has other concerns. The only downside is that staff may move on to another facility, leaving you to re-staff and re-train.

If you don’t mind sacrificing individuality, then franchising might work for you. If you’re the more creative type or the type of owner who likes to be in total control of your surroundings, then you might want to put in the extra work to fine-tune an independent business that reflects your personal nuances and goals.

Q: Is it less expensive to buy into a franchise?

A: That depends. The medical spa industry is new to the franchising business, so there is no long history to use as a guideline. In general, franchisors expect an upfront lump-sum fee to buy into the business. These fees are set by the parent company, so they many not keep with the expenses in your area. For example, you don’t want to pay “ Manhattan ” prices for a business in Anytown , USA .

If you open a facility on your own, you will be required to come up with a business plan that a bank must approve for financing. You will be the one to set the course for your business, to know exactly what you can put into a facility in the way of amenities and decor, and what you will be able to pay a staff.  You will also be able to set your own fees for both services and retail product lines. The advantage, again, is being in total control. You know what your nest egg is and what you can afford, and you can always ratchet up your capital expenditures or pull back, based on your budget and revenues.

A franchise often expects a percentage of your monthly sales revenues on both services and products, and rent.  In addition, make sure you are aware of hidden costs, such as service fees or required purchases, which can include operation manuals and advertising materials.

Q: What about products and equipment?

A: A franchisor expects you to buy the product line and equipment it provides, and often takes royalties from products sold. That can be a huge worry off your shoulders: You have the recommended equipment in-house right from the start, and you look like you’ve been in business for years. Your staff will be trained in the use of that equipment either on site or at the manufacturers’ site.

However, by giving up control, there is no “shopping around” for a better price either. On your own, you would be able to seek out some professional guidance and use the industry relationships curried by such professionals to get great equipment at a volume discount.

In addition, you will be required to purchase franchise-required product lines, which are identified by the franchisor name, not yours. Depending on your own goals, this may not fall in line with your own vision.

Q: If the parent company is a success, why wouldn’t I be?

A: That’s a good question. Franchisors can sometimes fail—in the same way independent businesses can. Unfortunately, no medical spa franchisor exists that can show you years and years of success, along with loads of locations. It’s simply too early in the process.

Still, you will be told to follow a template and a system. Expect that it’s probably not a proven one—and that you will need to weather the process. This is not to say that franchising and franchisors aren’t reputable, but they’re businesses, and they’re susceptible to the vicissitudes of the economy, be it national or in their regional location.

Those changes can have a trickle-down effect. Whether it’s changing market prices, demand or even management problems at the highest level, the franchise may be forced to pass along charges to its franchisees. Your company can be directly affected by those decisions. However, your independent business may be affected more by your local economy, than the state’s or even the country’s. So, two things can happen: You may either be immune to a franchisor’s woes, or if you’re in a location that is going through some harsh economic times, the stability of your franchise will see you through.

Your business is yours to run as you see fit, but make sure it is also a good fit for your personality, taste, management style and vision. Some people are hands-on; others are delegators who have less interest in the daily minutiae. Do your homework and find the right fit for you.

Cheryl Whitman is president of Beautiful Forever LLC in Englewood Cliffs, NJ. She can be reached at www.medicalspaconsultant.com. 

560 Sylvan Ave
Englewood Cliffs, NJ 07632
Phone: (201) 541-5405
Fax: (201) 541-5409
www.medicalspaconsultant.com

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