The Great Clips Real Estate & Development Team is looking forward to ICSC RECon in Las Vegas this month (May 21–23). It’s the largest industry convention for retail shopping centers and real estate professionals from all around the world. 

This is a great opportunity for us to meet the people who can help us find great locations for our walk-in haircare salons. There are several ways we learn about potential locations: commercial real estate brokers, commercial landlords, franchisees who seek out potential sites, and shopping center developers who are looking for quality businesses that will attract more customers to their locations.

 On that point, Great Clips is an easy “sell”: Great Clips salons attract nearly 500 customers per week to centers—and in high traffic salons, that number can go up to 800 or 900. But perhaps the real reason landlords love us? Our franchisees are easy to deal with and pay their rent on time! 

As of March 2012, we had 57 signed leases and another 15 were signed in April, bringing our year-to-date total to 72. This exceeded our goal for the first quarter and it has set us on a great path toward achieving our 2012 lease goal of 230. No other salon franchise is growing as fast as Great Clips.  

If you’re attending RECon, there are several ways to learn more about Great Clips: 

ÜOur Real Estate Managers—all seven of them—will be attending RECon. They are looking forward to having the chance to talk with real estate leaders and hearing about properties and opportunities.  

ÜGreat Clips CEO Rhoda Olsen will be at RECon on Monday, May 21, meeting with several national developers and landlords, to share our vision and successes and to thank them for their partnership. 

ÜGreat Clips Director of Real Estate Paul Guidera has been named the Minnesota Retail Chairperson by ICSC. On Sunday, May 20, Paul and other state chairs will hear about the ICSC’s latest updates on retailing and the economy. And, on Monday, Paul will present to the Retail Runway the most recent news about Great Clips operations and expansion plans. 

ÜAnd, Jim Reynolds, our Senior Real Estate Manager on the west coast, will be a speaker at a special retailer panel on Sunday, May 20.  

Wondering where to find us at the trade show? We’re located in booth S341R, very close to the Jimmy John’s booth, so stop by to visit the Great Clips team and then grab a few free samples at Jimmy John’s!

Over the past few months, I’ve read a lot of good articles—primarily from magazines and newspapers that I read online—about franchising, entrepreneurship and general business topics. I either bookmark them or send the link to someone in our department so we can talk about it later, or that I can use as topics for this blog. 

So, here are some highlights from my collection: 

A 10-Minute Wait? Don’t Waste My Time

This article revisits the study commissioned by Great Clips in which people were asked how long was a reasonable amount of time to wait at a retail business. Most people said 5 to 10 minutes was okay, but anything over 10 was “unreasonable.” People were also asked about their three top annoyances—can you guess what they are? 

Why Trader Joe’s Stands Out From All the Rest in the Grocery Business

I’m fascinated by niche businesses that succeed because of the vision of an entrepreneur who identified a need and stepped up to fill it. (Kind of like Great Clips!) This article has some interesting observations about what Trader Joe’s does well: They are fearless in their approach to retailing; they are experts at explaining what they offer; they have mastered their business model but are never satisfied; they are always looking for new ways to push new ideas; and they feel a sense of responsibility to satisfy their customers. I’d say that’s a pretty good recipe for success.

 The Store of the Future

Deloitte surveyed 39 retail executives about the future of retail; 85 percent of them said that within five years, bricks-and-mortar stores will still be around but their primary purpose won’t be for shopping. Instead, it will be about providing an experience—specifically, a sensory brand experience. This doesn’t surprise me, if only because Great Clips has been addressing this for years. There will always be a need for customers to come to our walk-in haircare salons, and we know that how they feel about visiting our salon, is just as important as the service we provide.

 So You Want In? How to Assess a Franchise Opportunity

Perhaps this article caught my eye because our department just completed our annual franchise disclosure documents (FDDs), as required by federal and state laws. Compiling all the information, reviewing the data and then reviewing it again—it’s an exhaustive procedure that results in an invaluable tool for prospective franchisees to use when considering a franchisor. This article explains the FDD from a lawyer’s perspective. 

What have you been reading lately? Send me links to your collection. I’d love to hear from you.

This is the fourth in a series of posts about the 10 signs you should look for when thinking about buying a franchise. 

The fourth vital sign of a great franchise opportunity (according to the writer of the AllBusiness.com article) is good management. Here’s what the article says: 

Good management. Find out about the people behind the company and their experience in franchising. It’s one thing to run a successful pizza restaurant, but another thing entirely to grow a pizza franchise. How long has the company been franchising? Meet the management team and the support staff to get a feel for what it will be like working with them day-to-day.  

If you’re thinking about buying a franchise business, there are many ways to evaluate the management of that business. One of the most important is whether or not the senior leadership team is visible and accessible. When you attend events sponsored by the franchisor, you should take note of whether or not the executives are there. Are they forthright about sharing information with you? Are they leaders in their industry? 

We recently held one of our regular new-franchisee orientation sessions in Minneapolis. We call it “Building Your Legacy” because these meetings are the first major step for a Great Clips franchisee to do just that—build their business into a lasting legacy.  

The executives and managers at Great Clips take these meetings very seriously and make every effort to attend. At last month’s Building Your Legacy meeting, the CEO, President, CFO, multiple vice presidents, and directors were not just in attendance, but made presentations and then stayed to interact with the new franchisees. 

This is all about sharing our culture. Being a walk-in hair salon business, our success depends on how we treat our customers and each other. Having executives who walk the walk and live those values is imperative, and finding franchisees who fit those values is critical to everyone’s success.  

This was the topic of an article in the April edition of Franchising World by Great Clips CEO, Rhoda Olsen: Qualifying Candidates—Matching Your Brand’s Culture and the Best Prospect. She shares some great insights about how important it is for the prospective franchisee to consider the culture of a franchisor and vice versa. 

Whatever business you’re considering, what kind of culture do you want to be a part of, and then share through your own business? And how do you figure out if company management is walking the walk?

In the news: Great Clips by the numbers 

It’s been a busy few months for Great Clips in the news. Forbes ranked our walk-in salon franchise in a top 20 list; our CEO is a person to watch; and, people are revealing some, shall we say, interesting information about what they would do with an extra 15 minutes in their day. Wondering how that last one is related to Great Clips? Read on. (But if you click on the first two links, make sure you come back to the blog so you can read about the survey. I promise, it will be a good conversation starter at home!) 

FORBES TOP 20

It’s always reassuring to know that others see a good opportunity in Great Clips as a franchise business, most recently Forbes Magazine and the publisher of Bond’s Franchise Guide who put Great Clips into their top 20 franchise brands “for the buck.” Rankings were made based on five variables: initial investment costs, total number of locations, closure rate, growth in the last three years and training hours. I talk about what a great value Great Clips is to our franchisee prospects, especially those looking for something in the walk-in salon category, so I’m pleased Forbes thinks we’re a good buy, too. 

TWIN CITIES BUSINESS

Great Clips CEO Rhoda Olsen made the list of “200 Minnesotans You Should Know” in Twin Cities Business, in the grouping “New at the Top.” When you meet Rhoda, it doesn’t take long to realize how passionate she is about the hair care business – and especially about franchising as a way to invest in your future, so I’m glad to see her get this much-deserved recognition. 

WHAT WOULD YOU DO WITH 15 MINUTES?

Great Clips recently launched our Online Check-In service, which helps customers save up to 15 minutes in their day. We conducted a survey, asking people what they would do with that extra time. I’m sure you’ll be shocked (not really) to learn that men and women answered this question differently! Let’s just say women chose “sleep” as their number one answer and men chose…something different. Read about the survey and then come back and let me know what you would do with your extra 15 minutes in you day! (Keep it family-friendly, everyone!)

This is the third in a series of posts about the 10 signs you should look for when thinking about buying a franchise.

One of the biggest benefits of joining a franchise organization is the support you get from the franchisor—without it, you might as well be in business on your own (and isn’t that the reason you wanted to join a franchise in the first place…so you wouldn’t be doing this alone?).  

It’s easy for franchisors to say they support their franchisees, but there’s no better gauge of what actually happens once you’ve signed the deal than to have current franchisees talk about what that support looks like. One of our franchisees, Lisa Schneider of Hutchinson, Kansas, was recently profiled in her local newspaper. I noticed that much of what she credited as helping her succeed in owning and operating a walk-in salon franchise could be traced back to the kind of support she receives from Great Clips: 

• promotions to build interest and traffic before, during and after Grand Openings (like marketing and discounted haircuts);
• technology that builds customer loyalty (like Online Check-In and Clip Notes);
• franchisee and employee training; and,
• the tools and encouragement to become a multi-unit owner. 

The challenge for a prospective franchisee is to figure out if the support will actually be there after the ink is dry. That’s why it’s so important for prospects to talk to current franchisees. Great Clips offers that opportunity to prospective franchisees, by hosting bi-weekly conference calls with existing Great Clips franchisees. During these calls prospects can ask any question they like, including questions related to short-term and long-term support they could expect to receive. (We also encourage all of our prospects to randomly contact any Great Clips franchisee!) 

In my opinion, any franchisor worth considering should be completely open to this idea. If not, you’ve got to ask yourself, “What don’t they want me to know?” 

(Read more about the kind of support Great Clips offers its franchisees here.)

I’m revisiting the article posted by AllBusiness.com about the 10 signs you should look for when thinking about buying a franchise. I wrote about #1—Industry Growth in a previous post. Now I’m looking at #2—Unit Growth.

To financial analysts, unit growth is an indication that a franchise is thriving. More units mean more brand awareness, which leads more customers to existing locations, which—if a company is committed to growth—leads to the establishment of more locations. This then feeds into greater brand awareness and the cycle begins again.

Unit growth refers to the increase in the number of units operating under the franchise brand. For example, as of February 29th of this year, Great Clips has 3,112 salons—or units. That’s a unit increase of 173 salons over last year. And, since the start of 2012, we’ve already grown by 26 units. That number grows almost daily as we welcome new franchisees and help existing franchisees become multi-unit owners.

This brings up another way of evaluating the strength of a brand by units—the number of franchisees who own and manage multiple locations. Again, financial analysts look positively at franchise systems that have a high percentage of multi-unit franchisees. Strong multi-unit ownership within a franchise system is a strong indicator that franchisees believe in the brand and see a healthy return on investment. Be sure when you’re evaluating a franchise system, that you look for a franchise organization that has a relatively high percentage of multi-unit owners.

How do you know which franchise brands have a high percentage of multi-unit owners? I’m pleased to tell you that Great Clips was recently ranked in Franchising.com’s Top 50 Brands by Number of Multi-Unit Franchisees. Even better, we made the top 10 and we’re the only walk-in hair care salon franchise in that top ranking.  

If you’re already a multi-unit franchisee, please share your thoughts about owning multiple units: Was is difficult to make the leap? Is it harder or easier than you anticipated? If you’re not a franchisee yet or you’re a one-unit operator, what are your hopes (or concerns) for owning multiple units?

Have you heard about Online Check-In at Great Clips salons? It’s a great technology that allows our customers to log-in from a computer or smart phone and view the estimated wait time at nearby salons. From the site, they can click the “check-in” icon and add their name to the list. By the time they arrive at the salon, they are likely next in line to be served, or ready to be served soon.  

It’s been a phenomenal success—one million customers checked in online in 2011 and we are currently averaging over 200,000 per month systemwide. Our Online Check-In mobile app has found its way onto more than 400,000 devices over the past year.

 That’s great news, but we’re not stopping there. Our goal is to reach one million downloads of our mobile app.  That’s a lot of apps so to sweeten the deal, for every download between now and the end of this month, Great Clips will donate money to Children’s Miracle Network Hospitals—up to $10,000.

 Please help us achieve this goal! Be part of our “app a day” challenge: Download the app to your smart phone; then, share this idea with at least one friend every day and ask them to share this time-saving app with their friends.

 Thank you for helping us spread the word about this great service and for helping Great Clips support Children’s Miracle Network Hospitals. Find out more at our website.

What makes a great franchise opportunity? AllBusiness.com posted an article recently about the 10 signs you should look for when thinking about buying a franchise—whether it’s a haircare salon or something else (although I really can’t understand why you’d consider anything else!). 

 The first one on the list is industry growth. Before you start any business, you’ll want to know if there is growth potential in the industry you’re considering. Here are some questions I think are important to consider (and then I’ve related that question to the Great Clips category of walk-in salons):

  n  Is this a product or service that people are going to want more of in the future?

 Haircare is a $55 billion industry and getting bigger every year because almost everyone needs a haircut. Customers realize the advantage of a walk-in salon for ease in scheduling and good value. And I believe that’s not going to change anytime soon.

  n  Is it a market category that is recession proof, or even better, will grow in both good times and bad?

 Regardless of the economic situation, people still get haircuts. In fact, according to the U.S. Bureau of Labor Statistics, cosmetology is ranked as the most recession proof industry a business owner can pursue.

  n  Is it an industry that has a built-in demand, offering a product or service that brings customers back to the business regularly?

 Most people get their haircut every four to six weeks, which creates a reliable return-customer base for hair salons.

  n  Is it a profession that people like to go into so that as your business grows, you will have a readily available work force?

 Employment of people working in the personal-appearance profession—barbers, cosmetologists and stylists—is projected to grow faster than average through 2016. This kind of opportunity will attract more people to this profession, which is good news for salon owners looking to hire the best in the business.

  n  Is it a product or service that can’t be replaced by technology or done by someone overseas?

 Hair care salons aren’t a fad and the work can’t be done online, overseas or with new technology. Unless, of course, you find someone with a Flowbee.

  n  Is it a business that will attract your local population and hasn’t already saturated your area?

 Great Clips balances our locations between emerging markets, growth markets and mature markets to make sure that we have the right number of salons that we can fully support.

  Of course, you should always do your own research when you’re considering a franchise and there are several places to find out about market potential of almost any industry. Here are just a few:

 http://www.ibisworld.com

http://valuationresources.com 

http://www.firstresearch.com 

 What industry intrigues you? What do you think the “next big thing” will be?

 My next post in this series will be about Unit Growth, something I’m really passionate about because I believe it’s a key indicator of the strength of both an industry and a specific brand. More to come!

If you’re reading this blog, chances are you’re already a franchisee or you’re considering becoming one. Either way, you’re most likely interested in knowing when something is worth investing in – a hair salon business, for example – or when it’s best to look elsewhere. 

I came across this headline recently: 10 Signs of a Great Franchise Opportunity. It was an article posted on AllBusiness.com, which is one of my favorite online publications for news about starting or buying a business or franchise. (Full disclosure: I like AllBusiness because it’s smart, thorough and insightful, and not because they recently named Great Clips as a top 10 franchise company for 2012 – as I said, they are smart, thorough and insightful!) 

The author says that a good franchise opportunity has these vital signs: 

1. Industry growth
2. Unit growth
3. Strong support from the franchisor
4. Good management
5. Marketing and advertising support
6. Satisfied franchisees
7. Adequate earnings
8. Sound financial statements
9. Honesty
10. A good fit 

I have both professional and personal reactions to each of the 10 signs, so I’m going to use the list as a blog-topic generator in the coming months. I’ll be as objective as I can about how these relate to the entire franchise industry, and I’ll also share my “inside-baseball” perspective about how these top 10 signs relate to Great Clips.

 Which of these signs stand out to you? If you’re already a franchisee, which ones have had the most impact on your business? If you’re considering becoming a franchisee, which ones do you care about most when considering joining a franchise?

 I’d love to hear your ideas. Please add your comments below or send me an email directly: rob.goggins@greatclips.com

The 2012 AllBusiness AllStar Franchise rankings were announced earlier this month and it’s exciting news for Great Clips: We are the first haircare salon to rank in the Franchise AllStar’s Top 10! 

This list ranks the “best of the best” of franchise companies, so we’re very pleased to be recognized and we’re thrilled to be in the top 10. (Our overall ranking is #8 – that’s up from #26 last year!) 

But rankings are meaningless if they’re not supported by real data, and that’s why getting into the top 10 is significant. AllBusiness really does their homework, scoring franchise companies according to key business criteria such as unit growth, financial strength, system size, years in business and brand visibility. 

Great Clips scored high in all of these measures. The one I was most pleased with was our solid ranking in growth, which is a measure of how fast a franchise system is growing—this is also the index that receives the heaviest weighting. As AllBusiness says, “The more growth a system experiences, the more opportunity it offers.” 

Exactly! Because more units mean greater brand awareness. This can lead to more customers and greater sales and profitability for franchisees, who can then open more units. And, the cycle starts all over again.

More growth means more opportunity. Count me in, because it’s gonna be great!

Happy Holidays to you!