Launch 20 salons in UAE, shortly
Launch 20 salons in UAE, shortly

Naturals, a leading player in the domestic beauty salon industry, and via its franchising model has provided suitable opportunities to women entrepreneurs. This chain plans to double its network across the country including smaller towns to 650 salons by the end of the year. C K Kumaravel, co-founder, Naturals, shared his mantras for growth.

Why did you choose franchising as a growth model?

We opened our first parlour in Chennai, in ‘00, and that was largely due to my spouse who wanted to work part-time while the children were at school. We broke-even within three years, and then opened another salon.

However, arranging funds was rather difficult in those days as banks wouldn't provide loans to this sector, and we decided to leverage the franchising model. And, our initial partners were friends and relatives, and we jointly funded 13 salons in one year.

The success of this model led others to approach us, and we also help franchisees to obtain funds via private equity and allied channels.

Luxury and beauty segments are growing aggressively in smaller towns across the country. Kindly share your experience?

We initially focused our expansion on tier-II and smaller towns like Nagapattinum, Ellore, Nashik, Aurangabad, Latur and Bhubhaneswar, and with the ‘explosion’ of media and TV serials, consumers in these cities are increasingly focusing on their appearances. Competition in these cities is rather limited, and even men often visit our salons.

And, subsequently we have expanded our presence to other metros. The organised hair and beauty segment sector has annual sales of Rs 10,000 crore, and growing at 30 per cent.

What is the selection criterion for franchisees?

We prefer working with women, especially home makers, and to help these entrepreneurs raise Rs 45 – 50 lakh required for starting a salon, we have a tie up with Indian Overseas Bank.

And, we offer a flexible royalty sharing model, which ensures that when a franchisee breaks-even, which typically takes a year, she then makes payments to us.

My goal is to create 1,000 women entrepreneurs, 3,000 salons and 50,000 jobs by ‘20.

How do you ensure that franchisees follow your business model?

I would like to emphasise that we recruit the staff for our salon network including franchisees, and also train them at our academy. And, this helps to ensure uniform service levels across our salons.

You entered the luxury segment with Page 3 in 2010. Please elaborate on your strategy?

We realised that our brand Naturals was not able to effectively serve high-end clients, and we launched Page 3 for these premium customers. We currently have four Page 3 salons, and also offer Naturals Lounge, which serves as a ‘bridge’ between our other two offerings.

Your expansion plans?

We will be launching 20 salons in the UAE, in ’14, as well as expand our presence to Sri Lanka, Bangladesh, Singapore and Malaysia. In addition, we are aiming to be the largest salon in Asia by 2020, and as part of that strategy, will expand our retail network to 650 salons by the end of the year.

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