Heyday Emerges As The Next Big Wellness Franchise: Personalized Facial Brand Sets Sights On Developing 300+ Units Across the U.S. In The Next Five Years

October 3, 2022

The skincare franchise is rewriting the in-person and at-home facial experience through personalized care plans, technology and licensed estheticians to make facials a monthly necessity. 

Heyday, a fast-growing New York-based skincare franchise that’s on a mission to provide expert skincare that empowers everyone to be their best self, is changing the way people think about skincare. Now, the brand with locations in New York, Philadelphia and Los Angeles, is bringing a lucrative new franchise opportunity to business-minded individuals craving their next venture as a recession-resistant service that offers a recurring customer model.

“For a whole younger generation of consumers, there's no trusted brand in the skincare category, and none that can drive personalized recommendations and expertise like Heyday,” said Adam Ross, Heyday’s Co-Founder and CEO. “That's what's exciting to us. Skincare is a $7 billion service industry, and $100 billion online category. Right now, we're doing the work to become the brand that wins the hearts and minds of a very large set of customers.”

Currently, Heyday has 10 locations, and Dennis Campbell, Heyday’s director of franchise development, believes that the brand will grow dramatically through franchising with plans to have 300+ shops opened over the next five years. The brand has already attracted interest from multi-franchise operators, senior executives, and entrepreneurs with strong backgrounds in sales and marketing.

“We want franchise candidates with high emotional intelligence, people who know how to build a team, and want to develop a lifetime business,” Campbell said. “Our ideal franchisee will ensure that they invest in their Heyday estheticians to create a world-class hospitality experience for both their own team and for their clients.” 

The skincare industry is growing, and Campbell believes Heyday has the winning formula for entrepreneurs who want to tap into this demand. In fact, in the first quarter, the company received a $20 million Series B round of funding led by Level 5 Capital Partners with participation from existing investors Lerer Hippeau and Fifth Wall Ventures. The fundraise is allowing Heyday to further scale and cement its position as the trusted brand in skincare, along with Level 5 committing to opening 40 units over the next five years.

“We know that Level 5’s investment validates our franchise unit economic model and their commitment as a franchisee for 40 locations will help us lock arms in solving problems with our franchise partners and working together to be a best-in-class partner with our franchisees,” said Ross. 

Within Franchising, There Was No Dominant Facial Brand, Until Now

While facials have long been viewed as an occasional indulgence or a gift for someone in need of pampering, Heyday is redefining the industry by providing its customers with regularly scheduled visits as part of a well-rounded health-and-wellness maintenance routine. Its newly launched SMS text program allows for anyone interested in receiving facial tips to have an ongoing exchange with a licensed esthetician.

It’s an approach that is resonating with customers. Heyday says approximately 80% of its clients are under the age of 34, and 30% have signed up for ongoing memberships and monthly services. 

By repositioning the facial and “taking it out the spa”, Heyday is reframing the entire facial experience, and combined with its unintimidating, gender-neutral, design-inspired space, is making it easy for a younger generation of customers to engage with professional skincare by addressing the friction points of time, cost and convenience. Heyday’s ability to focus on skincare sets itself apart from so many other spas that offer a myriad of services. With this repositioning comes a younger customer who is focused on self-care and wellness compared to what can be a pampering and indulgent experience at a higher-end spa that targets an older, more affluent customer. 

By focusing singularly on providing regular facials, Heyday offers customers a modern, personalized approach to skincare, one supported by a licensed esthetician and customer skincare education programs.

Campbell, who has led franchise development at a variety of brands, says that the size of the market combined with Heyday’s membership model, its focus on esthetician education, and its innovative digital integration, make the brand a uniquely profitable opportunity for prospective franchise owners.

“The franchise model is a great way to elevate the customer experience because you have local operators involved in the business, and Heyday can really focus on branding innovation and the education platform,” Campbell said. “By focusing on an education platform for our estheticians and clients we are serving a huge unspoken need in the market.”

Why Heyday is Poised for Franchise Success

The customer base, Millennials and Gen Z, view skincare as self-care versus beauty, and are willing to invest in this as part of them being their best self. The importance of having their best possible skin has never been greater, a trend exacerbated by social media, and tied to the empowerment that comes with confidence in ones-self. On average, more than 50% of revenue each month comes from returning customers. 

An understandable product: facials are concepts that customers immediately understand because they are the gold standard of the skincare market. It’s an effective treatment that offers real and immediate benefits, and there’s also a cumulative benefit that builds with regular use. Unlike other single-service salon treatments, like lash extensions or blowouts, clients already understand the value of the service. They are now looking for a modern experience, one that focuses on self-care, accessibility, education, frequency and technological innovation. 

A scalable business model: With an average store size of just 1,800 square feet, the concept can fit into a variety of buildouts. Additionally, the brand has proven viable in a range of markets from coast to coast, with major potential to succeed in both small towns and large cities.

The Industry: The $7 billion spa services category is a massive and growing category, yet is under-developed relative to other beauty categories. The category is incredibly fragmented with more than 75% of spas across the US being single unit operators, 98% of them offering a myriad of services and products versus focusing only on facials. Until Heyday, the category has lacked specialization, standardization, operational expertise and educational engagement.

Profitability: The average customer spend at Heyday is $140, with 50 minutes spent on-site. Heyday locations that are currently in operation see about 20% net earnings.* Plus, additional service enhancements can be easily added to any appointment without extending the length of service. 

Esthetician training & customer relationships: Heyday’s licensed estheticians are able to focus on what they enjoy most: the facial and offering personalized treatment to every customer. Working in a fun, collaborative, non-competitive work environment, Heyday estheticians have time to connect more deeply with clients and their work. The company sets itself apart from small, all-in-one spas by providing ongoing training to enhance estheticians’ skincare knowledge, plus Heyday does not have an agreement with one single skincare line, which means that they truly pick the best products for each guest’s needs.

Heyday is currently targeting expansion in the top 54 major metropolitan areas including Los Angeles, San Francisco, Seattle, Phoenix, Denver, Dallas, Austin, Houston, Chicago, Atlanta, Miami, New York and Boston, among other large U.S. cities.

Heyday’s startup costs range between $574,000 to $755,500, depending on which market the store is located. Other factors like design, configuration and labor costs will also impact the total investment. Click here to see the full cost breakdown.

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