A recent New York Times investigation revealed that employees at many nail salons around metro New York work with toxic chemicals under poor conditions and for little pay.
For the Newton-based nail salon MiniLuxe, which prides itself on exceptional hygiene and fair wages, the news seemed further validation for their very existence.
'The Next Starbucks'?
The story of MiniLuxe began when the managing partner at a Boston-based investment firm called Cue Ball gave his guys a challenge.
He wanted them to find a fragmented industry they could transform into "the next Starbucks."
One of the partners, John Hamel, a Harvard graduate, noticed an opportunity.
"One day I was driving down the street in my hometown in Revere," Hamel recalled. "I looked to the left and I saw a nail salon, looked to the right, saw another nail salon. Did that about seven times in a row and a light bulb went off."
Hamel had never actually stepped foot inside a nail salon until after this epiphany.
"I remember walking in the first time and the smell that hit me," he said.
His firm did some research and found out the big problem in the nail industry, for both consumers and workers, was the lack of hygiene.
And so MiniLuxe was formed with an emphasis on cleanliness. The foot baths, for example, don't have jets because they can breed bacteria.
The business started eight years ago with a single salon in Newton Centre. Now it's grown to seven more locations around Boston, with another scheduled to open up later this month at the Prudential Center. And the company has plans to expand nationally; it recently opened in Dallas.
To scale up, the company brought on Sue Thirlwall as CEO, who previously worked for Dunkin' Brands as the brand operating officer for Baskin-Robbins. With that corporate expertise, she hopes to turn this local salon into a national name.
"You can see when we first walk in, the signature of every store is in fact the MiniLuxe clean lab," she said, pointing out the hospital-grade sterilization equipment that looks like an exhibition kitchen in a restaurant.
For Thirlwall, all of this cleanliness is just as important as career development.
MiniLuxe prides itself on paying employees at or above minimum wage, plus they keep 100 percent of their tips. (This is rare in an industry in which employees are often paid according to the much lower wage levels set for tipped employees.) Employees also get paid time off, health benefits and profit sharing.
To fund this business model, the company charges $10 to $15 more than the average nail salon around town. A pedicure at MiniLuxe costs $39.
The New York Times investigation found there is undoubtedly demand for cheap nails, but Tony Tjan, managing partner at Cue Ball and co-founder of MiniLuxe, thinks there's also demand from conscious consumers looking for a more socially responsible mani/pedi.
"When people are used to going to an average corner chop shop and paying the lowest price possible, and selecting things on price without thinking about the consequences of that, it takes a while to change that behavior," Tjan said.
Selling A Service, Not A Product
Brittany Carter, an industry analyst with the research group IBISWorld, acknowledges that an increasing number of consumers are looking for toxic-free options at nail salons. But even if customers change their behavior, she questions whether they'll turn to MiniLuxe or whether MiniLuxe practices will just become more common across the industry.
Carter doubts MiniLuxe can truly become "the next Starbucks." The big difference, she says, is that Starbucks is selling a product, not a service.
"It's very easy for Starbucks to buy the same coffee beans, generate the same recipe, and ensure consistency across all its locations," Carter said. "It is much harder for a service-based industry, such as a nail salon, to ensure that every technician is properly trained and providing superior service across all their locations."
Carter says quality is nearly impossible to standardize in the highly saturated nail industry. And she says she sees that playing out with MiniLuxe reviews.
"Judging by the Yelp reviews, it's just hard to ensure consistency among technicians and labor," she said.
But Carter says if there is a way for a salon to scale up, she thinks it certainly involves using a creative MiniLuxe concept — data analysis.
Tjan describes MinilLuxe's tech strategy as a sort of "Uber-ization" of the nail industry.
"We use an immense amount of data to try to determine when people are more likely to get their services," he said. "All of those inputs of data — whether there's an event nearby, what colors are hot — all those are put into an algorithm to help us better understand supply and demand matching."
And the company uses that data for staffing. The ultimate aim is to reinvent the business, both ethically and digitally.
"Our goal is to go national, without question," Tjan said.
"I'd say international," his colleague Hamel added.
And it has plans to more than double its total footprint this year, focusing on the Southwest — because the data suggests warmer temperatures translate into more pedicures.
This segment aired on May 18, 2015.