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
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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.
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