As the emerging skincare franchise begins to expand across the U.S., investors are flocking to the brand because of its huge income potential.
Heyday, a fast-growing franchise focused exclusively on making facials more accessible, is disrupting the skincare industry by providing personalized, accessible services to clients across the country. Its key insight: Millennials and Gen Zers think of skincare differently than previous generations — and they're willing to invest in expert skincare treatments as part of a well-rounded wellness regime.
With that huge addressable market, the brand is demonstrating that the financial opportunity for franchisees is immense.
“When someone asks me how much they can make as a franchisee, I turn the question back on them,” said Sean Bock, president of franchising at Heyday. “I ask them how much they want to make because it’s really in their control. Our model has proven to be profitable. Ultimately, it’s up to the franchisee to determine how profitable they become.”
Currently, the brand has ten corporate locations including six in New York City, three in Los Angeles and one in Philadelphia. The brand will expand to as many as 300 locations in the next five years and recently signed new franchise agreements for locations in Chicago, Philadelphia, Austin, Detroit and Cleveland.
What Does Heyday’s Item 19 Say About Performance?
With endless potential for growth, it’s easy to see why franchisees are bullish on the concept. The financials speak for themselves.
According to the Item 19 of the Heyday Financial Disclosure Agreement, Heyday’s existing stores have demonstrated impressive results during their six years of operation. Stores that had completed a full year of operation brought in between $1,185,777 and $1,938,796 while peak monthly revenue hit as much as $198,020 prior to the COVID-19 pandemic.*
Despite the countless challenges of the pandemic and the resulting shutdowns and setbacks that it created, it also provided learning opportunities for the brand. According to Bock, the pandemic allowed Heyday to take a renewed look at opportunities to increase per-store profit.
“We created a dual strategy where we increased prices for a walk-in customer,” he said. “The main reason is that we believe we're offering a premium personalized service, so we're just staying in line with the current market.”
Heyday Membership Offers a Predictable, Recurring Revenue Model
In addition to making sure that its prices were in line with the level of service, Heyday also increased its membership opportunities for customers. “Think of it as Netflix for skincare,” said Bock. “When you sign up, you’re agreeing to pay $95 a month, but you can also cancel anytime. In addition to that, members receive $20 off our enhancements, and 15% off our products. It’s a really great deal for clients.”
So far, the results of this membership model have been dramatic. Prior to the COVID-19 pandemic, 30% of services were performed on Heyday members. Today, that number is about 50%, says Bock.
That membership increase has helped stores maximize profitability. “Membership allows us to have more predictable revenue, which makes it easier to manage staff and laborers, allowing us to maximize the time with our estheticians while they're in the shop,” Bock said. “Our labor utilization dramatically increased.”
However, Bock returns to his initial point: The amount that a franchisee makes is ultimately up to them. “You have the opportunity to have a very profitable store with Heyday,” he said. “You also have the opportunity to have a breakeven store if you don't put in the time and effort to develop teams and spend time developing your customer base. It's not as if you turn on the lights and your location is profitable. You have to put in the work, and you have to build relationships.”
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.
