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Cheflera, a new franchise chain, combines cosmetics stores and beauty clinics

Customers that buy procedure packages receive the full amount paid back in cosmetics. Cheflera hopes to close out the year with 100 beauty clinics in Brazil.

Three months after its launch, franchise chain Cheflera already boasts more than 20 stores in Brazil, and hopes to close out the year having reached at least 100 clinics. The new business, spearheaded by Fernando Martins, is a mix of cosmetics store and beauty clinic. Martins says, “I have a lot of experience with franchises. I previously owned two renowned chains from different fields. The first was in education and the second in dry cleaning.

Fernando Martins, director at Cheflera

Fernando Martins, director at Cheflera

When he sold the ‘Lava e Leva’ chain, Martins, formerly a university professor, looked into new business opportunities and decided to invest in cosmetics. However, he sought a unique way to enter the already very crowded world of beauty franchises in Brazil. The country’s largest franchise chain, for example, is O Boticário, a cosmetics store which has more than 3700 stores nationwide.

I decided to combine a beauty clinic and a cosmetics store to create a one-stop-shop for beauty solutions, allowing customers to undergo procedures using cutting-edge equipment and products, while at the same time being able to use the same professional products used by our estheticians at home,” says Martins. According to a 2018 survey conducted by ABIHPEC (Brazilian Association of the Toiletries, Fragrances and Cosmetics Industry) and Instituto FSB Pesquisa, Brazil has become the third largest market for esthetics services, behind only the US and China.

Another strategy developed by Martins is converting the price paid for beauty procedure packages into credit that can be used to purchase the brand’s own cosmetics. For instance, when a customer pays R$ 300 for a package, they are entitled to take home R$ 300 worth of brand products at no extra cost.

The goal here is to not only increase customer loyalty, but also secure recurring revenue streams for franchises, thus guaranteeing the capital necessary to keep the chain going. “Research shows that of all companies that shut down, 80% owe that to problems with cash flow, the money a company must have every month to pay for all its operating expenses,” says Martins. “Recurring revenue from service packages ensures that Cheflera owners have enough cash flow every month,” he explains.

Martins says that the chain’s clinics offer procedure packages ranging from three to six months, with payment installments due every month. “When a customer buys a three-month package, the store’s cash flow is secured for that period of time. The more clients buy packages, the more the store is bringing in and selling.” Package prices start from R$ 100 a month.

Cheflera’s product portfolio includes more than 100 products, divided into skincare (face, body, feet and hands), haircare, female and male fragrances, nutricosmetics, diffusers and air fresheners. Its procedures list includes lymphatic drainage, radio frequency treatments, lipocavitation, diamond peel and more.

Product manufacturing is outsourced. “We have no plans to open a factory right now, not even when we expand our operations,” says Martins. The chain’s current focus lies on its national expansion. At the moment, the Northeast region is the only one that does not have a Cheflera store. “We are now working towards making Cheflera the largest beauty chain in Brazil and one of the largest for cosmetics as well,” he says.

The initial investment to open a Cheflera franchise is R$ 60,000, with a return on investment expected between six to 18 months, and estimated revenue of R$ 7,000 a month, according to the company.

Renata Martins

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© 2019 - Brazil Beauty News - www.brazilbeautynews.com

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