Sales Performance: Personal Services Franchises

By Laura Michaels

Finding some positive news in the midst of the otherwise dreadful sales performance of the personal services category took some digging, but it seems one segment was made to serve the millions of people stuck at home last year: junk haulers. Junk removal franchises collectively added $50 million in sales in 2020, an 11.7 percent increase, for a total of $621 million. It was the only segment to grow sales in a category that includes fitness, education, massage and eye care, among others. CEO Michael Andreacchi’s Junk King was up 15.5 percent, to $82 million. Junk King ramped up its contactless service offerings, created an online pricing estimator tool and saw “huge” demand for its dumpster rentals, he said. In fitness, shutdown orders, capacity limits and cautious consumers resulted in a 23.8 percent hit as the segment declined overall to $5.8 billion. Devan Kline, CEO of the lone grower in fitness, Burn Boot Camp, said his franchise “did literally everything we could” to keep members. “We threw out all the rules and basically said, meet your members where they are,” said Kline. That meant live stream workouts, classes in parking lots and the creation of virtual platform Burn Boot Camp On Demand.

Hair Care

By Laura Michaels

Hair care and massage, two industries that in many states fought for “essential business” status and were denied, felt the impact of pandemic restrictions and, later, hesitation on the part of consumers to return to those close-contact services. Hair care franchises, including salons and salon suites, saw sales decline by 31.3% overall, to $1.7 billion. That’s a drop of more than $800 million from 2019. Brian Kelly, president of Phenix Salon Suites, noted the brand’s franchisees, like others in the salon suite segment, weren’t eligible for Paycheck Protection Program loans because the Small Business Administration, which facilitated the program, views the model as a passive business owned by developers or landlords and the brand isn’t listed on the SBA’s Franchise Directory. Still, he said Phenix was successful in helping ‘zees negotiate rent deferrals and abatements. “Our P&L is really rent in, rent out, so we’re fortunate landlords leaned in and helped out,” he said. Phenix designed a mobile app to allow its salon professionals to manage their business online, including the purchase of inventory, and most of its franchisees didn’t charge their salon tenants rent during shutdowns. “So as a result, we didn’t have the turnover” when locations reopened, Kelley said. By December 2020 occupancy was at 90.2 percent. Sales at Phenix dipped slightly, by 0.1 percent. My Salon Suite was the only brand in the segment to grow sales, adding a slim $1 million. Massage franchises, meanwhile, were down 22.2 percent overall. Hand & Stone, whose sales fell by 17.2 percent, did increase its unit count by 30.