Why Buying A Lash Franchise Is The Next Big Opportunity
Americans are obsessed with appearance. Look no further than the rise of Instagram, which at its core, can be reduced to a bragging platform. It’s difficult to surmise whether vanity was the catalyst for social media or vice versa, but one thing we know is true, people’s lives and appearances are now on display 24/7.
It’s easy to see now why the average annual spend on appearance (fitness + beauty) for women is $3,756 with men not far behind at $2,928 per year. Knowing that the industry accounts for significant individual spend, let’s take a quick look at the macro industry numbers.
The beauty industry (including both Spas and Salons) is a $128 Billion industry that’s projected to reach $190B by 2024. In the U.S. alone, Hair and Nail Salons account for $56B of the industry.
Obviously there’s plenty of money to be made in the beauty sector, but where lies the opportunity?
The beauty industry is quite fragmented with less than 10% of the more than 1.2 million Hair and Nail Salon operators being controlled by major companies and the other 90% controlled by sole proprietors. Even with only 10% of the operating establishments, these companies are driving more than 50% of the $56B Hair and Nail Salon industry.
Lash extensions are new to the beauty service industry and there isn’t a ton of data yet on how many sole proprietors are operating versus major companies. However, Kline & Company, a New Jersey based research firm, says that the lash extension services industry grew from $808 Million in 2017 to $875 Million in 2018. This growth was due in large part to franchise growth from three growing franchise systems focused on lash services. Together, the 3 brands make up about $170 Million to $200 Million of the $875 Million market, or roughly 20% of the total revenue. The other 80% is made up of smaller market players and sole proprietorships. (Data drawn from the Franchise Disclosure Documents of Lash Lounge, Amazing Lash, and Deka Lash.)
If the future of the lash industry trends toward the current, mature stage of the overall beauty salon industry, meaning that a small group of established companies grow to take more than 50% of the industry revenue ($437.5 Million), that means there’s $237 Million up for grabs even if the industry stagnates.
In the likelihood that it follows the trajectory reported by the Global Spas and Beauty Salons of 48% growth between 2017 and 2024, the lash industry could surpass a billion dollar industry on its own in the next several years, leaving an even greater opportunity for a brand to establish market share.
One dark horse entering the industry is an iconic New York City based brand The Lash Loft that is just beginning to launch franchising. The numbers for it’s lone location are staggering at $1.99 Million annual sales, more than double the averages of the franchises currently dominating the market. The brand is expected to grow exponentially over the next 3 to 5 years due to the prodigious numbers, achieved in the world’s most competitive market, by attracting sophisticated investors and experienced franchisees that see the opportunity to be a category leader. As the lash industry inevitably trends toward the same consolidation we’ve seen in the overall beauty services category, the opportunity to be the category leader still remains.