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Part-time Work = Part-time Profit?

cashHere is a laser skin care franchise that is pitching itself as a viable part-time business. Sounds good, eh? The franchisor is implying that you can work part-time hours and earn full-time profits. How then does the franchisor make money? By upcharging you on the equipment you must buy and subsequently rent, earning a % on each rental deal you source, charging a $30,000 franchise fee, and charging a flat-monthly royalty that is highest when you first start. The franchisor seems to be in a great position to profit in the first two-years regardless of whether you ultimately succeed.

After becoming a LaserShare franchisee, you will purchase the equipment from a specific vendor that we refer you to. The next step is to identify medical practices or other potential business to enter into, what we consider, is a unique long term “revenue sharing lease” and marketing arrangement with. Once, the “revenue sharing lease agreement” is entered into with the medical practice or other business, the practice or business will provide the space for the laser equipment as well as providing the operators of the equipment, most of whom will usually be members of their staffs already. As the LaserShare franchisee, you will provide the laser equipment, marketing/advertising assistance, and initial guidance in launching or expanding the laser skin care component of their practice or business. And, you may set up as many relationships as you like, thereby increasing the utilization and the number of revenue sharing relationships.

Does this sound like a casual, part-time opportunity?

We have tried to keep it simple. You pay a one time fee upfront of $30,000 and a FLAT monthly royalty, not tied into sales or other revenue volume that declines substantially over the first 24 months to a small one time annual fee starting in Year Three.

Return on your investment and time, in addition to individual lifestyle choices, are the primary reasons most people buy into a franchise system. Before you buy into a franchise, always look at the tradeoofs…evaluate your dollar investment, time investment, likelihood of success based primarily on discussions from those already selling similar product to your customers, and how much money you would need to net for this business to be worthwhile.  Compare that risk with a safe choice, such as taking a lower paying job that you enjoy and investing the franchise fee and other upfront costs in safe passive investments earning 6-8% per year.  Is the franchise worth the risk?  Is it only worth the risk if you buy multiple units?  You must know the answers to these questions.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.

3 comments

  1. Ryan;

    There is a huge problem with this type of system: the FDA. The FDA indirectly regulates this industry, since many of these laser skin care devices make inadvertant medical claims.

    There have been a number of distributors burnt by fraud in this area as the result of trying to flog an illegal device.

    Unless the manufacturer were well known, I would stay far clear of any such franchise or business opportunity.

  2. Wouldn’t a laser manufacturer have to get some kind of FDA preapproval? It seems the franchisor would get in such huge trouble for misrepresenting the business opportunity that they wouldn’t risk selling a device that is known to not meekt FDA standards.

  3. The franchising of medical services is a tragedy waiting to happen. You might wish to see the discussion of Sona MedSpa on the bluemaumau discussion board, or Janet Sparks’ articles in Franchise Times. The issues raised by Michael and by Dennis are valid and have already arisen with Sona. Fortunately for Sona (and unfortunately for the general public) some influential connections have kept the Sona story buried. And while Sona might escape notice, my guess is that we have not heard the last of the conflicts inherent in the franchised delivery of medical services.

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