Multi-Unit Franchisee Magazine Issue II, 2016 | Page 36

MULTI BRAND about your business.” The ambitious brothers, who have dreams to build a second home in their beloved New Orleans, counsel would-be multibrand franchisees to start at the beginning. “Our advice is to open several locations of the first brand and get comfortable with remote management before worrying about taking on a second brand. It’s easier to have two locations with the same brand than one location of one brand and one of another,” says Jesse. “The other secret, which Charles handles for us, is to make sure your financials are very clean and understandable to other people. You need to know where you stand, and you don’t want to get your financials thrown back at you.” and Facebook, this is where we see advertising moving to,” says Jesse. “Two hundred years ago, each community had a butcher, a baker, and a candlestick maker, and every business was based on location and word of mouth. If you weren’t the better of the two butchers, you wouldn’t get much business. “Then came mass broadcast and national brand creation. You could tell only two or three people about your product and still out-advertise any negative word of mouth. Now, because of Twitter, Yelp, Facebook, and the review sites, we’re going back to where customers are trusting reviews from other users more than fancy ads on TV. This is the next level of marketing online: controlling your reputation by giving good service and encouraging fans to tell others BOTTOM LINE Annual revenue: $10 million. 2016 goals: Open more Sport Clips locations while growing same-store sales in mature stores, and doubling the number of vans for Oxi Fresh. Growth meter: How do you measure your growth? Same-store sales up over the same quarter last year. Vision meter: Where do you want to be in 5 years? 10 years? In 5 years, we want to continue to grow the three concepts we own in same-store sales and total number of locations. We’d like to have a second home in New Orleans, and start a fourth concept to keep us fresh and in the “still learning” mindset. In 10 years, we want to have over 100 units of all our concepts combined. At that point, we’ll be self-financing most of our growth. At the 10-year mark, we will have already developed people to run each of our concepts, and we’ll move to the “investor” category mentioned in the book Rich Dad’s Cash Flow Quadrant by Robert Kiyosaki. How is the economy in your regions affecting you, your employees, your customers? We aren’t experiencing any issues with the economy. We do think that the customer base has become more frugal in how they spend discretionary income. They are demanding a bigger bang for their dollar. Everything we do as an organization, from the time the customer walks into one of our locations to the time they leave, is about building value. You can only do that if you train your team to do that consistently. Are you experiencing economic growth in your market? All of our locations are up over last year and have trended like that for several years. How do changes in the economy affect the way you do business? Jesse: They don’t. We started out in rural markets where you didn’t see big swings up or down in the economy. With little to no population growth in these markets, we have had higher-than-average PSAs (per store averages) for our brands because we simply focus on executing as close to perfect as we can, and always take the hard look in the mirror on what could we do better. When we move into markets where the population density is greater, it feels like it’s so much easier for us. I equate it to living and training in high elevations where the oxygen is thin, and then coming down to sea level to compete with everyone who lives and trains at sea level. How do you forecast for your business? We determine what we want 34 to be up for the year as a percentage of net sales. Then we walk it backwards to determine what we estimate the average tickets will be and how many team members we need to serve that number of clients. It boils down to hiring and training the right people to handle the increase in business. We have never been afraid to spend money on marketing to drive in new customers when we feel the operations inside the four walls are as good as can possibly be. What are the best sources for capital expansion? Local banks have been great to u s. We are at the tipping point where many of our upcoming projects can be self-funded. Experience with private equity, local banks, national banks, other institutions? Why/why not? We have always used local banks. We like the relationships and the fast decisions we can get back. What are you doing to take care of your employees? A large percentage of our team members start with us at entry-level positions. We are not fans of them always being at that level, but the only way they can advance is if they are trained and developed beyond what their current responsibilities require of them. We try to do that for them so they can advance. How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? We have always been a big fan of over-developing our team members. We do have some turnover as we help develop them beyond the position they are in, and they leave to advance their personal careers if we don’t have room to promote them at that moment. But it also makes those team members and the ones who stay with us long term way more productive than their counterparts in competing companies. We feel we can keep labor costs down by increasing productivity and the average ticket. How do you reward/recognize top-performing employees? We have all of management compensated by performance. Every week “Top 10’s” and other awards are given to locations and individual team members. What kind of exit strategy do you have in place? Jesse: I have young children and Charles and I are both single. I don’t have any definite plans on my kids working directly in the business and taking it over one day, but they are being raised to be stewards of the corporation where they will be able to train and hire people to run the day-to-day operations, while following wherever their own passions may lead them—in or outside of the company. MULTI-UNIT FRANCHISEE IS S UE II, 2016 muf16-2_keyser.indd 34 4/2/16 2:29 PM