Heyday is Giving Franchisees the Rare Opportunity to Usher in a New Heyday of Skincare Services

Heyday, the personalized skincare brand focused on providing expert facials, first entered the franchising market last year with 10 corporate-owned locations and the bold goal of hitting franchise numbers consistent with those of a five-year franchisor before the end of the year. Now, at the start of 2022, the fast-growing franchise brand has opened one new location and signed franchise agreements for a whopping 100 stores with the goal to open 18 more physical locations by the end of the year. 

So, how did the Heyday team make this happen? Adam Ross, the CEO and co-founder of Heyday, has played a major role in guiding the franchise system to where it is today. Prior to Heyday, Ross worked in mergers and acquisitions for a little over 12 years, focusing on companies in the consumer product and retail sectors, including big-name beauty and wellness brands such as Revlon, Avon, Gillette, L'Oreal and Estee Lauder. When Ross decided it was time to sit on the other side of the table and be the one to help build engaging brands and businesses from the ground up, he knew Heyday was the right place to focus his efforts. 

1851 Franchise spoke with Ross to learn more about the brand’s impressive year, the state of the health and wellness segment and his vision for the future of Heyday. 

Big News From Last Year

Over the past year, Heyday has significantly expanded its presence in the skincare segment, most notably through the introduction of its franchise opportunity. “We officially announced our franchising approach this past year, so that was obviously a huge milestone,” Ross said. “By December 1st, we had sold over 100 units in an eight-month period — it was very gratifying to reach such a big milestone after such a short time.” 

In 2021 Heyday opened a new corporate shop in Los Angeles and its first franchisee-owned location in Bethesda, Maryland, while closing on multi-unit deals in priority markets including Cleveland, Denver, Tampa, Chicago, Philadelphia and Atlanta, among others. The brand will open its second and third franchise locations this spring in the Knox-Henderson neighborhood of Dallas and in Alexandria, Virginia, with 16 more openings to follow before the end of the year. 

Ross says 2021 was also a transformative year for the Heyday brand on the consumer front. After reopening all corporate locations this year following COVID-related closures, Ross says the brand saw record-breaking demand among consumers who were ready to get back to normal routines. 

“We saw client engagement and frequency at historic highs with the business,” Ross said. “We ended 2021 with around 70% of our total treatments done every month on clients with a monthly membership model — this figure was only at around 30% pre-COVID.”

Why the Skincare Segment Is Poised for Growth

Skin care is already a massive, $100 billion industry. But Ross says the industry hasn’t even begun to tap into its true consumer potential, especially coming out of the pandemic. 

“We are seeing a change in client spending habits,” Ross said. “In some categories, customers are happy to buy online from the comfort of their own home, but in certain areas, specifically in health, beauty and self-care, these services require a physical experience and an expert. In the case of skin care, clients don’t have access to that expert esthetician or professional products. People want those brands that offer something they can’t do at home.”

Looking ahead, more and more customers are going to be looking for brands that can satisfy their skincare needs. Gen Z, which comprises a whopping 32% of the global population, is 10% more likely to have a facial care routine than millennials, with three out of four stating they began using a facial moisturizer and cleanser before the age of 18, according to a recent study of Gen Z consumer habits. According to Brandessence Market Research, the skincare market is expected to double in size, reaching nearly $200 billion by 2027.

Why Franchisees Are Getting on Board with Heyday

Today, as the skincare segment emerges as uniquely well-positioned for the post-pandemic landscape, Ross says more and more entrepreneurs are recognizing the strength of Heyday’s business model and concept. So far in 2022, the brand has already closed a five-unit deal in Phoenix and a ten-unit deal in Boston, both of which will begin opening their first locations in early 2023.

“Franchise candidates across the country are recognizing the value of the skincare industry and are getting in at the ground level,” Ross said. “They see from the beginning that our recurring revenue model works and our personalized services turn clients into loyal, long-term fans that will play an essential role in scaling their business.” 

More than 75% of spas across the US are single-unit operators, 98% of them offering a myriad of services and products, diluting their expertise in skin care. Ross says Heyday is the first in this category to offer specialization, standardization, operational expertise and educational engagement. By dominating the marketplace early with a business model that emphasizes skincare education, skin therapist and client satisfaction and strong unit economics, Ross says Heyday will be the defining skincare brand for a new generation. 

“Skin care is one of the most fragmented categories in the world today,” Ross said. “It is mostly mom-and-pop spas that are operating with outdated playbooks. The category is in desperate need of expertise and a brand and experience that can deliver on the needs of what a younger generation of clients want. Heyday aims to bring the facial out of the spa. When you reposition the facial in a gender-neutral, design-inspired space like Heyday, it becomes much more about health, wellness and self-care. There are so many people out there confused about their skin care, and we can provide them with the confidence and empowerment that comes with being in control of their skincare routine.”

Currently, 70% of the store’s clients are under the age of 35, and nearly 70% purchase monthly memberships. With its very modern approach to membership-based skincare service — including an online booking system that makes requesting a service as easy as ordering a ride-share — Heyday has garnered a Net Promoter Score of 85, ranking among the top brands in the world. 

In addition to the brand’s innovative position in the market, Ross says franchisees are also recognizing the strength of the Heyday team. “We have become an employer of choice for estheticians, which have traditionally been a large but underappreciated employment class,” he said. “Overall, our team has the data to create an experience in self-care unlike any other within our four walls. All of that combines to create a strong franchise opportunity.”

The Investment 

Ross says the Heyday investment stands out from competitors in three distinct ways: financially, operationally and strategically.

The start-up costs needed for a Heyday franchise range from $574,000 to $755,500. “In terms of the financial component, our revenue to CapEx is best-in-class relative to any other service concept out there, while our buildout costs are in a lower range, including all fees and marketing,” Ross said. “Overall, our unit level economics are over two times stronger than our competitors.”

According to the Item 19 of the Heyday Financial Disclosure Document, 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 in 2020, while peak monthly revenue hit as much as $198,020 prior to the COVID-19 pandemic.*

Operationally, Ross says the Heyday investment offers access to a robust infrastructure of support, including the team, systems and reporting capabilities in place. “We offer all the support franchisees need so they can leverage our data and focus on day-to-day operations,” he said. “We also have 10 corporate shops, which helps us innovate and optimize our business model for franchisees. Our support covers everything through onboarding, development, construction, and culminates in a comprehensive marketing strategy to help franchisees launch as fast as possible.”

In terms of strategy, Ross says Heyday is also focused on leveraging franchisee feedback and input to best position the brand for the future. “Franchisors at our stage aren’t usually listening to franchisees to help inform strategies and innovation,” he said. “Getting that feedback is going to best position us to deliver on what our clients want today and tomorrow.”

Why the Leadership Team is More Excited Than Ever

Looking ahead, Ross says the ultimate mission and vision for Heyday is to become synonymous with skin care. 

“It is a very ambitious statement, but what gets the team so excited is that there is an opportunity to solve so many of the friction points that exist in the segment today,” he said. “The skincare industry is ready to be fundamentally transformed in the way that Uber transformed transportation and Spotify changed music services forever. Despite its size, the category still has a very unsophisticated playbook. Skin care is the second-highest daily routine in people's lives behind food and beverage, yet there is no single trusted brand. There is too much product and not enough thoughtful, personalized solutions. We’re changing that.” 

Now, Ross says the Heyday team is looking to open around 20 franchise units by the end of 2022, and an additional 50 in 2023. “We see ourselves as the number-one skincare brand in the U.S. with massive opportunities for growth in nearly every market across the country,” he said.

For more information on Heyday, visit: https://franchising.heydayskincare.com/

*To see full financial information, please reference the 2021 Franchise Disclosure Document.