Sport Clips, Not Your Father's Barber
Sports Clip a leader in America's $55 billion hair services market.
By Anne Field
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.
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.
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.
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.
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.