How an Engineering Approach to Beauty Franchising Solved the Unit-Level Revenue Problem

When former engineer Loni Le Van-Etter decided to leave the technology industry to explore starting her own business, she initially looked at tech-adjacent franchise brands. Then, she began exploring beauty concepts. But as she did more research, she ran into a consistent problem: no single-service brand had the unit-level economics necessary to replace her previous salary. So, she built something new.

"I realized almost none of the franchises had enough opportunity for annual revenue that would replace my income," Van-Etter said. “So I decided to make a bigger center that would be able to support me going forward. That’s how I ended up creating Glosshouz, which does beauty, med spa and wellness all in one place.”

After navigating strict SBA lending requirements and leveraging her data-driven planning skills, Van-Etter launched her first Glosshouz location, offering hair, nails, lashes, Botox, weight loss and more under one roof, offering what would typically require five or six different brands to achieve under a single name.

"Even though it is a complicated model compared to a single-service blowout bar where all you're doing is blowouts, it's still the same type of business," Le Van-Etter said. “You hire licensed professionals who know how to do all the services. It's just on a little bit bigger scale, but that's what makes it competitive and makes it worthwhile.”

As she works to grow the business, Van-Etter is focused on partnering with similarly driven, disciplined business owners who can mirror her own journey and propel both their own business success and the long-term health of the brand.

Van-Etter joined 1851 Franchise Publisher Nick Powills to discuss transitioning from engineering to beauty, navigating high-revenue operations and identifying the right franchise candidates. A transcript of Van-Etter’s interview with Powills has been provided below. It has been edited for brevity, clarity and style.

Nick Powills: All right, Loni, first you, then the franchise. How did you accidentally fall into franchising? What's your franchise backstory?

Loni Le Van-Etter: I didn't intend to franchise early on, but when I started the business 10 years ago, people would come into the spa all the time and ask, "Is this a franchise?" So it got in my head over time. It's a successful business, and I'm excited to share it with other entrepreneurial individuals who want to become business owners like I did after my long career in technology. It's the best thing I've ever done.

Powills: Go back to the creation of the business. At that point, did you look at buying a franchise?

Van-Etter: Yes, when I wanted to start my own business, I looked into other technology businesses like cell phone repair or solar panel installation. I used to be an engineer, so that was my comfort zone. But then I thought, "I grew up with all sisters, so wouldn't it be fun to have a business where you get to meet the client, exchange, have relationships, and work with a lot of women?" That led me into looking at beauty franchises. When I was doing that, I realized almost none of the franchises had enough opportunity for annual revenue that would replace my income. So I decided to make a bigger center that would be able to support me going forward. That's how I ended up creating Glosshouz, which does beauty, med spa and wellness all in one place.

Powills: So you decided to create Glosshouz as a non-franchise 10 years ago. You saw the customer experience that you wanted, and you had your opinions with your sisters. As an engineer, you can engineer a playbook on how to become an expert in this, but how do you even go about opening up those doors when this isn't the category that you've been in from a career standpoint?

Van-Etter: It was challenging because SBA lenders tend to prefer people who have a background in that industry, so I had to really prove out my business case. But I'm a data-driven numbers girl anyway, so I just worked it all out. It took me a good year to come up with the whole plan, build the facility, and make it all work as a business model. But like I said, it's been wonderful ever since, and it was the best decision ever.

Powills: How long after opening up your doors did you feel comfortable financially? There's the currency of just being a business owner period — where you want to make money, but you also probably love the project of trying to figure out this puzzle — but at what point did you feel comfortable financially?

Van-Etter: That's a great question. It did take a few years to get past the $2 million mark of revenue. I would say that's when I was most comfortable financially.

Powills: When you opened up the doors, did customers come easily, or was that a journey for you, too?

Van-Etter: No, it was quite a journey. In the beginning, the brand and the concept were very novel because there weren't a lot of brands or franchises that offered the breadth of services in the kind of environment that we have. When you walk in the spa, there's a big refreshments bar where you can order smoothies, frappuccinos and cocktails. There's a relaxation room. We provide spa days where people come for the whole day, and then they get used to the idea that we're multi-service. Now they can do a Botox appointment and get their blowout right after.

But it was quite different in the beginning, and people didn't understand at first, so there were days where I would be there with just a few customers. It was a tough lesson to learn the marketing and advertising over time that really resonated with our type of clientele, but we've perfected that over the years. It is something that is very appealing to a person who goes to get their hair done, their nails done, and then they want to get their lashes done, get a little Botox, have some filler, and get weight-loss services.

We have developed our monthly membership program that rewards our clients for doing multiple services, and that's also been developed over the years. That kind of came to fruition maybe two or three years into it. Once we made that program, which benefits the customer for doing more than one service on the same day, that really helped propel the business forward with revenue. Now the customer wants to get a discount for doing multiple services on the same day, and it's a win-win situation for the business.

Powills: It fills a great space. Touching on your competitive landscape, it can go towards the massage brands, the spa brands and the all-encompassing wellness brands. You end up having a great competitive landscape, which is great for the consumer, because most brands in each of these categories are singular service things. Unless there was a landlord that put them all next to each other in a retail center, it doesn't really exist in a spa-type environment, so you've nailed that. Business is nailed. You run it for 10 years. Your customers are saying, "Is this a franchise?" Now you launch it as a franchise, and how is that going?

Van-Etter: Well, it's more challenging than I thought it would be just because I've realized over time I have to find someone like me who is ambitious enough to take on a little bit more complicated business model. I have had a few candidates in the past whose feedback was, "Oh, it's just a lot to manage. It's complicated. It's expensive." I guess the answer to that is yes, but I do help everyone with the processes and the systems to keep it all running smoothly.

It is a bit of an investment because it's about a million dollars to build the spa and get everything running. That being said, it also provides a great competitive advantage in that we can do all types of services, which makes it a unique experience to compete in the market. It also makes it a high-revenue business that allows you to have the lifestyle that you want if you're that type of business owner.

Powills: My unsolicited comment is that at a million-dollar build-out, you have to have done something successful in life. If I was qualifying a franchisee, I want to qualify them to own three, open one, have enough to scale to number two, and have enough for a rainy day. That's a good fundamental route to getting someone into business. It's different for you because you were able to bootstrap and really hustle your way through to become a business owner. That's usually what business owner number one does. A franchisee is buying a system or a model. If I took a $3 million investment and looked at what we're going to need to get lending, in the most simplistic sense, we're going to need $600,000 cash in our bank. That means the people that we're bringing in have to have done something successful in life to have saved up $600,000 liquid to be able to invest into a business.

Van-Etter: Well, I would like to interject that you wouldn't necessarily need three because you would be able to make a lot more income with just one.

Powills: Totally, and I'm not saying that you have to get to three. But if you're now trying to find the gap between someone who's going to come and say, "This is too hard operationally," and someone who says, "This is a great business investment," now back into some of the decisions you make in item seven. To increase item seven to be $1.2 million, where you have to pay someone to be your operator so that you're teaching someone, "Yes, it's hard, but you're going to need to hire this person in there," versus bootstrapping — it might change the landscape of who's coming into your system. You have to find someone who is not going to be scared of the operational structure. You have to find someone who is willing to do it, and if they are afraid, then they're going to have to offset that with an investment.

Van-Etter: Totally agree with you.

Powills: What you report in average net is a fantastic number. It's going to take, call it three and a half or four years to pay off the initial investment, and then it can make significant money. If you had two of these, then you're making really, really good money and you're starting to build generational wealth. But at the front end of this, again, per what the candidate is, you're not looking for a man-in-a-van candidate. You're looking for someone who is sophisticated, wants to scale their income, and has already made money. It's a different type of candidate.

Van-Etter: That's right. That's entirely right. Also, even though it is a complicated model compared to a single-service blowout bar where all you're doing is blowouts, it's still the same type of business. You hire licensed professionals who know how to do all the services. It's just on a little bit bigger scale, but that's what makes it competitive and makes it worthwhile.

Powills: Have you signed your first franchisee yet?

Van-Etter: Yes. We actually just got the permits approved, and we're going to begin building in the next week or so.

Powills: I would imagine the feelings — you said franchising is a little bit more challenging than expected. If I go back to day one of opening your business, you said it was a little bit more challenging than expected. Really, what you're doing is you're setting up your second business, because a franchise business is completely separate. Is it good to be able to have some familiarity with how you felt when you first went into business, where you're able to say, "All right, I know what my expectations are, but I can take a step backward and follow the process"?

Van-Etter: Yes, that's a great question because everyone always says it's "figure-out-able." Basically, it's hard, but you just figure it out as you go. The franchising part of the business has been challenging just because it's like looking for a needle in a haystack to find the right person who is passionate enough about this industry, has the resources available and is also someone I would want to partner with.

I also don't want anyone to not have success, so I need to pick an individual who is very capable and very driven as I am, who can really get their business off the ground with my help, of course. That's why it's challenging; it's a specific type of person that I'm looking for, not just anyone who has the resources.

Powills: If I were you, I would take that last statement that you just made, cut that into who we're looking for, and put that at the top of your franchise website to make it very clear. Clearly, you're showing a great business in the numbers, but then the tangible asset is you, because you're going to be able to say, "This is how you should feel when you're working through signing your lease. This is what you're going to feel when you're going through opening. This is why we have all these services, and this is how we've organized it from an engineer's mindset." Right now, your positioning says, "Own a Glosshouz." That's not a positioning statement.

If you talk about your story on your website, which is very buried, it's going to change who people are buying from, and I think it's going to change the outlook of where the business can go. That's the one thing that's missing in your positioning. The other thing that I think is deeply valuable is the cost for you to go open up. If you took all these services and said, "Here's brand X, here's brand Y," you would have to open up five, six, or seven different franchise brands to get to what we've built under one umbrella. So it actually oversimplifies it to be a multi-brand franchisee under one roof.

The last thing is, I can see it in the images: it looks like a luxury experience. You have to match the website look and feel to feel like a million bucks because this is a million-dollar business. I say that because if you work on the branding and tighten up the branding on your franchise website a little bit more, it's going to change things. Really, you're selling to someone who is not currently a customer of your brand, who is out there looking at competitive spaces in the med spa world. If they've never looked, felt or understood what it feels like to walk into yours, then that website has to make them feel like that.

If I were you, I would take everything that we just talked about because there are such great nuggets in there — from you being an engineer, to risking everything, to figuring this thing out, to deciding to franchise, to knowing who your true candidate is. All that stuff is so valuable. If it's hidden in the woods and it's just trees falling in the woods, then you're going to miss an opportunity to ignite someone's excitement about the business.

Van-Etter: Well, thank you for saying that, and I will take that to heart and talk to my website developer. But it is really hard to tell the whole story on the first page of the franchise website, so you have to put what you think is most important to help people understand the concept on the first page. We do have links to the franchise founder's story and all of these extra things, but you have to dig into it on the website. I agree it's not really front and center there.

In the end, what really matters is just finding someone who's passionate about this business, because you want to have someone who is going to want to grow the business, be in the business and be involved in the business. It's not just a "buy the investment and set it and forget it" kind of business. You have to find someone who's capable and passionate about the industry, but I thoroughly believe that there are many people out there just like me who would love to have this kind of business.

Powills: You have the emotional feeling of being a hero in your community because you're going to have something that people really need from all sides, including mental health and mental wellness that comes off of this. Then you have proof of concept in what the business has done, and now that you have a franchisee opening, you're going to have another thing to celebrate. You're going to have a reference point or a data point to say, "Look what the franchisee has done." It's going to take a little bit of time to get that, but it seems like you're on the right path and you have a new vision to create business number two as a franchise.

Van-Etter: Yes, it's very exciting. Really, the most important thing is that we will work together to build the brand. As long as I can find people who are truly passionate about this industry and want to build a lifestyle brand such as Glosshouz, then there's no stopping us. It'll be a fun journey.

Powills: Love it. Well, Loni, thanks for sharing some of your story. I appreciate it. For Loni, I'm Nick. This is another episode of Meet the Franchise. 

Watch the full interview above or on YouTube.