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Sport Clips, Not Your Father???s Barber

Sports Clip a leader in America's $55 billion hair services market

 

Sport Clips, Not Your Father’s Barber

Sports Clip a leader in America's $55 billion hair services market.

By Anne Field



Overview

CEO Gordon Logan

Gor­don Logan

At Sport Clips Hair­cuts, it’s all about the cus­tomer expe­ri­ence. While fran­chisees of the com­pany, based in George­town, Texas, pro­vide men’s hair­cuts, that’s only part of the ser­vice. “Most men don’t know the dif­fer­ence between an okay cut and a great cut, but every­body knows the dif­fer­ence between a mediocre expe­ri­ence and a great expe­ri­ence,” says CEO and founder Gor­don Logan, who formed the com­pany in 1993 and started fran­chis­ing in 1995. To that end, salons pro­vide every­thing from mas­sages to hot face tow­els dur­ing sham­poos, all in a brightly lit space with big-screen TVs.

That approach has helped fuel the company’s growth. For the past two years same-store sales have increased about 10%, a sub­stan­tial record com­pared to the 2% to 3% a year growth of the $55 bil­lion hair-services mar­ket, accord­ing to Logan. The com­pany has 855 loca­tions in 39 states, and Logan expects to add another 150 or so this year.

Fran­chisees come from “all over the world,”

The Com­pany

The ser­vice: Men’s and boys’ hair­cut­ting, with a dif­fer­ence. Fran­chises cre­ate an envi­ron­ment in which cus­tomers feel at home—and are pam­pered. “It really sets us apart,” says Logan.

Train­ing: New fran­chisees can log on to online learn­ing mod­ules as soon as they sign up. A com­pany rep­re­sen­ta­tive also pro­vides a face-to-face ori­en­ta­tion dur­ing that time. After that, there’s a one-week train­ing at head­quar­ters. Com­pany sup­port staffers also spend time with fran­chisees the week before and after a grand open­ing. In addi­tion, 10 weeks ahead of a sched­uled open­ing, fran­chisees hold weekly phone calls with some­one from head­quar­ters to make sure they’re on track. In all, there are about 125 staffers sta­tioned at either the main office or in the field whose job is to pro­vide train­ing and support.

Fran­chisees gen­er­ally don’t per­form hands-on man­age­ment, so there’s also ongo­ing train­ing for man­agers in every­thing from how to set goals to team-building, as well as train­ing for stylists.

Same-store sales have increased about 10%, com­pared to the 2% to 3% a year growth of the hair-services market.

Immigrant-friendly poli­cies: There are no spe­cific immigrant-friendly poli­cies. But, accord­ing to Logan, the company’s inten­sive train­ing pro­grams are help­ful for immi­grants. Fran­chisees come from “all over the world,” although there are no spe­cific numbers.

Fund­ing: The com­pany doesn’t pro­vide financ­ing, but it has solid rela­tion­ships with sev­eral lenders, accord­ing to Logan.

What you’ll need: Using exten­sive research and demo­graphic data to pin­point where poten­tial clients live and the best areas to sit­u­ate fran­chises, the com­pany works with a net­work of com­mer­cial real estate bro­kers to pin­point loca­tions for new stores. If the site seems to have poten­tial, fran­chisees then inves­ti­gate fur­ther. Loca­tions range in area from 180 square feet to 1,800 square feet, but the ideal is about 1,200 square feet. If it seems like a promis­ing site, then fran­chisees have access to attor­neys who can help nego­ti­ate leases.

Once con­struc­tion is fin­ished, “your store actu­ally comes in on a truck,” says Logan. Chairs, sinks, and other equip­ment are orga­nized in such a way that they can be unloaded eas­ily from trucks and installed in salons, allow­ing stores to be opened just four days after delivery.

We’re look­ing for peo­ple with good val­ues and ethics who are will­ing to work hard and stay the course”

Startup costs: Costs range from $150,000-$200,000. That includes the store build-out, equip­ment, inven­tory, work­ing cap­i­tal, fran­chise fee, and grand open­ing expenses. All fran­chisees are required to spend $15,000 on their launch event. Most fran­chisees buy mul­ti­ple loca­tions and hire man­agers to run them day to day.

Return on invest­ment: Logan can’t dis­close specifics. But, the amount of time it takes to turn a profit varies con­sid­er­ably, depend­ing on each franchisee’s abil­ity to execute.

What they’re look­ing for in prospec­tive fran­chisees: Accord­ing to Logan, he looks for peo­ple who “have an entre­pre­neur­ial bent, but they’re not too entre­pre­neur­ial.” That means indi­vid­u­als who want to run their own busi­ness but are will­ing to work within a pre­scribed sys­tem. In addi­tion, fran­chisees should have good peo­ple and super­vi­sory skills and the abil­ity to build a team. Pre­vi­ous expe­ri­ence can be in any­thing from the mil­i­tary to another busi­ness. “We’re look­ing for peo­ple with good val­ues and ethics who are will­ing to work hard and stay the course,” says Logan.

One essen­tial fig­ure is how many stores have been opened. But it’s also impor­tant, advises Logan, to pin­point the num­ber that have closed.

Tips for the Immi­grant Buyer

It’s impor­tant to inves­ti­gate the kind of train­ing and sup­port our fran­chise offers, not only ini­tially, but peri­od­i­cally after­ward, accord­ing to Logan. “At some fran­chises, if you can write a check, you are in. But you want to be with a sys­tem that really has your best inter­est at heart,” he says. “If the fran­chise doesn’t ask as many ques­tions as you think it should, that’s a warn­ing sign.”

Make sure to look at the company’s finan­cial state­ments and per­for­mance his­tory over time, says Logan. One essen­tial fig­ure is how many stores have been opened. But it’s also impor­tant, advises Logan, to pin­point the num­ber that have closed.

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