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Markets & trends

Barber shops emerge as trend among beauty franchises

Data from the Brazilian Franchising Association shows that Brazil jumped from three barber shop franchise networks in 2015 to seven in the first half of 2017 – and this business model should continue to fuel steady growth in the years ahead.

Investing in a franchise is the goal of many entrepreneurs who want to open their own business with the credibility of a brand already established in the market. Currently, the beauty industry appears as one of the most sought after franchise sectors, but one element of the data draws even more attention: the increase in the number of barber shops. According to the Brazilian Franchising Association (ABF), Brazil had three barber shop franchises in 2015. In the first half of this year, the number jumped to seven. In the same period, the total number of franchised units that fall under the Brazilian Franchise Law increased from 10 to 23.

Juarez Leão, director at ABF

Juarez Leão, director at ABF

An example of this is Santa Catarina-based Barbearia VIP, owned by former adman Victor Conceição. In 1998, the brand was already a household name in the heart of Florianopolis – it had been operating for 20 years as one single shop. After having been purchased by the entrepreneur in 2008, VIP now has 17 stores. “We have recently set up the 18th unit in Jaragua do Sul, northern Santa Catarina. The company is set to open another seven shops in the state, as well as one unit in Brasilia and another in the city of Barbacena, Minas Gerais. The plan is to have 25 stores operating by the end of the year, which we see as an achievable goal,” says Conceição.

He claims the business’ success can be attributed to some key features implemented in the stores, including free drinks while the client is waiting to be served, a wide array of services – ranging from beard trim to podiatry, beauty packages and groom pampering in some shops –, a high standard of excellence and quality products, plus little treats such as individual TVs, craft beers, men’s magazines, and video games.

Barbearia VIP also has its own range of products including beard shampoo, menthol shampoo, silver shampoo for gray hair, a hair-loss prevention line, hair waxes, aftershave and beard oil.

The company has won industry excellence awards and was awarded Brazil’s Best Beauty Franchise by Pequenas Empresas & Grandes Negocios magazine. In August, Barbearia VIP received its second National Benchmark and Business Quality Awards granted by the Brazilian Agency of Culture, Entrepreneurship and Communication.

ABF’s Director, Juarez Leão, says the growing interest in beauty franchises targeting male customers is a result of higher consumer demand. “The increased number of men looking for quality grooming services at a location that is convenient to them is the main driver of growth,” he says. “The franchising system has much to contribute to this emerging sector by professionalizing the business with systems, standards and controls, as well as streamlining and enhancing the expansion process. By operating as a franchise, businesses can benefit from brand awareness and improved margins to overcome growing competition.

Leão argues that independent businesses and small networks (single-owner stores or joint-stock companies) are common in the beauty and personal care industry. Hence, the level of improvement that the franchise model can offer is an advantage not only for the entrepreneur, but for the industry as a whole.

Data from ABF shows that the average initial investment for a beauty franchise ranges from R$215,000 to R$540,000, with a relatively fast return on investment. Rent, which is the usually the largest fixed business expense, has fallen considerably in Brazil in recent years, which also contributed to the rapid growth of this industry.

The initial investment to open a Barbearia VIP unit varies between R$80,000 and R$150,000 depending on the size of the shop. Conceição has high expectations for 2018, with a goal of reaching 40 to 50 stores by the end of the year. “I always was and always will be optimistic,” he says. “For those willing to take risks, try again, study, plan, execute, correct and repeat, success will eventually come.

Daniela Belli

Portfolio

© 2017 - Brazil Beauty News - www.brazilbeautynews.com

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