New Tanning Franchise Case Study: Sands Franchising

Co-founder Kerry Ellway, who suffers from the skin condition psoriasis and sciatic arthritis, was frustrated that the salons she was visiting in Hampshire weren't fulfilling a basic duty of care, or even making her feel comfortable and welcome as a client.

"I struggled to find a tanning salon that was able to look after my skin, or a nail technician that wouldn't treat me like a leper," she remembers. So, along with husband Derek, she made it her mission to introduce some much-needed changes to the beauty industry.

Derek, who has a background in brand development, noticed an absence of major brands in the salon industry, where most are owner-operated. Together they sought to fill this gap, by settling on a strong brand identity first and then building a business structure around it.

"We always knew we would franchise," admits Kerry. But first they needed to demonstrate the potential of their safety-first Sands brand, and they did this by opening three pilot sites across Hampshire, to prove the concept. The first salon opened for business in Gosport in December 2004. The couple have now launched fifteen sites across the country.

With no real experience in the beauty industry between them, they worked twelve-hour days in these first salons, running them as members of staff and doing everything from sweeping the floors to manning the phones. This experience enabled them to create an operations manual for the running of the salons, for future franchisees.

These first salons were largely funded by the sale of the Ellways' first business. The couple were franchisees themselves for five years before launching Sands; they sold their 'Aquaid' water franchise in January 2005 and invested around £350,000 into their new venture, borrowing 10% from NatWest in a loan secured by the Department of Trade and Industry (DTI) small business guarantee system.

The first year's turnover was £500,000 and the company made a modest profit but most of their income has been ploughed back into the business to get the franchising division off the ground. Kerry insists that the sale of their first franchise site in Aylesbury, which opened in November 2005, was the first major breakthrough for the business.

With second year turnover expected to reach £2m and this 2006's Startups Award for 'retailer of the year' under their belt, continued growth is definitely on the cards. A further five sites are currently in discussion, and if all goes to plan Sands will be hitting the capital next year.

 

Story from Startups:
Source http://www.startups.co.uk

Published: 12/03/2007

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