Traditional cosmetics brand launches its own makeover, combining great products and new marketing approaches to become America’s top cosmetics franchisor
It all started during the Great Depression, when a registered nurse in Santa Monica California started making skin care solutions for her patients in her kitchen. That nurse was Merle Nethercutt Norman, and the skin care products and cosmetics she developed started a revolution. After Merle Norman Cosmetics began franchising in 1934, women all over the country became business owners by selling Merle Norman products to their friends and neighbors.
Merle Norman was an entrepreneur at heart. She knew that to get people to really appreciate and desire your products, you had to get them to use them first, so she developed the “Try Before You Buy” concept, and also the “Before and After” makeover concept, which are still in use throughout the industry 85 years later.
A Brand in Evolution
Although it is still a family business, Merle Norman Cosmetics is undergoing a revolutionary change. In the last five years, it’s products and business practices have been upgraded to meet the demands of the times under the direction of a dynamic board of directors. “We’re a brand in evolution,” says Travis Richards, a member of the board of directors and Vice President of Franchising for Merle Norman. “We’re evolving everything about the company to bring it current. “
Richards says the company has made considerable investments, roughly $30 million for new packaging, new products, new manufacturing equipment, and even new computer systems to streamline operations. Considering that Merle Norman Cosmetics is a $100 million operation, the investment made by the board is significant.
Business Savvy Franchisees
They’re also upgrading their franchisees by raising the bar for new applicants, and it seems to be working. Today there are approximately 1250 Merle Norman Cosmetic Studios in operation, down from a high of 2000 earlier in the company’s history, but this decline is misleading. “Every Merle Norman franchise that opens today, replaces three that have closed because today’s franchisees are more business savvy,” Richards stresses, adding that on average, sales from a brand new studio will replace that of four closed studios. “I’ll take those numbers,” he says. “I’m very excited about that.”
A Favorable Business Model for New Entrepreneurs
Unlike most franchise operations, Merle Norman Cosmetics does not charge franchise or royalty fees. “The only thing we ask you is that you buy our products and you sell all of our products, and we don’t have competing brands,” says Richards. Another thing unique to Merle Norman is a very generous co-op marketing plan which covers up to 60% of a franchisee’s marketing costs. The company also offers free marketing materials, demonstration samples, and promotes the brand by advertising in women’s magazines.
Initial Investment $60,773 – $191,200
Net Worth $100,000 – $150,000
Liquid Cash $40,000 – $50,000
The initial investment for franchisees ranges from a low of $60,000, which includes working capital, construction, furniture, displays, and products, to a high of $116,000 for a larger studio with more stock on hand and higher construction costs. The investment will naturally be larger if the franchisee leases space in an enclosed mall because of construction costs and leasing requirements.
Beauty is universal. If you lived in India and learned how to do makeup, or skin care techniques, these skills are applicable anywhere you might move to
Store Within a Store Concept
The low initial investment is due, in part, to Merle Norman’s store-within-a-store concept, which allows owners of existing businesses, such as a nail or beauty salon, to operate a Merle Norman boutique in a separate, branded area of the store. Richards calls store-within-a-store “one of our biggest growth opportunities.”
Immigrant Friendly Brand
A Merle Norman Cosmetics franchise is a good fit for immigrants wanting to get started or move up the ladder in the American economy. Merle Norman is a welcoming environment that celebrates the energy and drive of immigrants. “For an immigrant coming into the United States, that wants to strike out and have their own business, the empowerment and the confidence that they’ll have in the beauty industry is second to none,” says Travis Richards.
Furthermore, the costs are reasonable, the products are high quality, and the skills required are universal. As Richards says, “Beauty is universal. If you lived in India and learned how to do makeup, or skin care techniques, these skills are applicable anywhere you might move to.”
Also, Merle Norman Cosmetics provides thorough training for its franchisees, both before and after they open their studios.
With the investments and product updates Merle Norman Cosmetics has made, the future looks very bright, but there’s still more to come. They’re working on additional programs that will speak to the ambition of the new wave of franchisees that are joining the organization. Soon they’ll be coming out with a spa program, a day spa that will build upon their new product offerings, and offer franchisees the option of building larger free-standing Merle Norman Cosmetic Studios to enhance the beauty experience for their loyal customers.
Three Ways to Franchise with Merle Norman Cosmetics
- Open a New Merle Norman Cosmetics Franchise – get more information
- Buy an existing Merle Norman Franchise – see available markets
- Add Merle Norman Cosmetics to your existing retail business
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