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.