It doesn’t take long for the stillness to break when the “open” sign is turned on. Customers steadily stream through the door and hair stylists are kept busy, snipping to the sounds of baseball games on the television around the store.
The brisk business isn’t unusual for the Georgetown–based men’s hair care franchise. Since founding Sport Clips Inc, in 1995, CEO Gordon Logan has celebrated an annual growth rate of 40 percent and the opening of more than 400 stores in 30 states. He expects the company this year to be $125 million, up from $90 million last year.
But the biggest news on the horizon? The obviously clean-cut chief executive anticipates at least 1,000 new stores in the next five years.
Locally, that means an expansion of corporate offices, more corporate staff members and a lucrative relationship for the Central Texas businesses Sport Clips relies on for its stores’ décor and hair products. Nationally, it means that Logan’s company will ask current and prospective franchisees to pony up $150 million to meet the company’s expectations for growth.
Logan entered the hair care business looking for a new experience after four years as a financial planning and control consultant with Price Waterhouse & Co. in Houston. It was a Wall Street Journal article about the hair care industry that prompted him to purchase a franchise in another salon chain and begin taking note of trends and demands.
What he found out was an entire segment of haircutting clients - men - pushed out of a growing salon trend that targeted women.
“Barbershops had been in a state of decline since the 1970s,” Logan says, joking that a friend of his who ran a barbershop said he knew the business was in trouble when he saw the shaggy-haired Beatles on television for the first time. “We felt there was an opportunity to create a [new] thing specifically for men and boys.”
In the early 1990s Logan began conducting focus groups and found out that men were nostalgic about the barbershop environment that had been a traditional male camaraderie along with a good haircut. A careful combination of televisions placed between chairs so clients can talk about the sports games, wash stations designed for men’s height, each sanitized brush and comb rolled into a towel - reminiscent of a towel in a gym - and complimentary neck trims have been subtle factors that have set the franchise apart.
Ross Mitchell, president of Austin-based consulting firm Implementations Inc., says it’s those factors - even more than the quality of a product - that make a business like Sport Clips successful.
“The ‘how’ of what you do is every bit as important as the ‘what’," Mitchell says. “When you are trying to create something that’s a modern interpretation of a reminiscent experience, getting it pretty good isn’t good enough. You’ve got to nail it. They did their homework and invested the intellectual capital up front to nail it.”
Sport Clips has a presence in 30 states, and is currently making its biggest push to expand in California.
Carl Pellegrino, an area developer for the company in Los Angeles, says that there will be 45 stores in California by the end of this year, and the interest from potential franchisees bodes well for continued expansion in that state.
Sport Clips’ 1,000 store projection will mean a combined $150 million investment from franchisees to commit at least $150,000 for each new store. Logan says he receives inquiries from about 5,000 potential franchisees each year and roughly 1,000 applications annually.
The company has a broad support team to work with franchisees, one of the factors Logan says will help Sport Clips continue in growth. “Our three guiding principles are: Do the right thing, do your best, and treat people the way they want to be treated,” Logan says. “That’s attracted a lot of very good people who want to be associated with the company…and has turned out to be the right way to do business - and a smart way to do business.”
Above article taken from Austin Business Journal, 14 June 2007
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