At SCG, our position is that franchising makes sense for many types of business applications, but absolutely not for salon suites. For example, if you own a traditional franchise (i.e. Subway, 7-Eleven, Papa John's, etc.), in return for ongoing royalty payments, the franchise operator receives national brand recognition, product supply chains with corporate leverage and economies of scale, product research and development, programmed Point of Sale terminals, inventory management software & hardware, national advertising and marketing, ongoing support, customer support call centers, online sales/booking, etc.
With salon suites, none of that is needed or provided by the franchise. So the question we have is this:
What value does an operator receive for on-going royalty payments of 5-7%?
We have asked this of clients that have looked into the franchise system, and at our suggestion, they have in turn asked franchisors. We still have not heard a sensible answer!
Anybody involved with salon suites franchises (franchisor or operator) is free to answer here on this blog. We will post the answers for all to see.