Sport Clips: A Cut Above Other Franchises

By Carrie Brenner

With more than 600 locations across the nation, the No. 21 franchise in this year's AllBusiness AllStars ranking is well on its way to the top. Sport Clips founder and CEO Gordon Logan had been in the hair care business for several years when he spotted an unhappy trend: the decline of the traditional barbershop. "Men were being forced to go to beauty salons. We felt like there was a real opportunity to create a concept for men and boys," says Logan, who decided to cater to this underserved niche.

With his unique hair salon-meets-sports haven concept, Logan opened the first Sport Clips store in Austin, Texas, in the early 90s. The company started franchising a couple of years later, though Logan says that part of the reason the system has been so successful is that Sport Clips was designed with franchising in mind from the start. The entire look of each salon is a sports lover's paradise, from the big screen TVs and simulated hardwood floor in the waiting area to the stadium-style seating and individual TVs customers can watch sports on while getting their hair cut.

In this rough economy, most salon owners are feeling the pinch. "The salon industry saw its lowest historical overall growth of only 2.8 percent in 2008 per our latest 2008 Salon Industry Study," says Cyrus Bulsara, president of Professional Consultants and Resources, a leading beauty, salon, and cosmetics consulting company. However, "'Economy' chains like Great Clips and Sport Clips are seeing good growth," he says.

Logan echoes this sentiment. In fact, he says his stores gain clients during tough times, thanks to the company's reasonable price points. But Sport Clips has seen a dip in franchise sales. In order to encourage new franchisees, the franchisor revoked its requirement that new owners open three stores in three years. Now franchisees can buy single licenses, although they still need to have solid financials and appear capable of opening multiple units, says Logan.

So what makes the perfect franchisee? Having a background in the hair care industry isn't nearly as important as having people skills. Franchisees will have access to multiple types of support and training, giving them the necessary tools for success no matter what their previous level of experience. Aside from having a relatively low investment, franchisees will also benefit from the company's relationships with third-party vendors and lending institutions, with which Sport Clips negotiates better contracts and financing deals.

But Bulsara says that with the economy in the dumps, there's an extra hurdle that potential franchisees should be aware of: employee turnover. "Many out-of-work executives and middle managers migrate to the salon industry franchises in bad times and a majority leaves as the economy improves."

It's also crucial that potential franchisees are interested in building the brand, says Logan. Sport Clips has sponsorships with Major League Baseball, NASCAR, and the National Hockey League, and the company also supports local youth leagues. "We want to give back," says Logan, whose company partnered with Vidal Sassoon and Habitat for Humanity to help rebuild homes in the region devastated by Hurricane Katrina. Sport Clips has also partnered with Veterans of Foreign Wars (VFW) to support Operation Uplink, which provides active-duty troops and hospitalized veterans with free phone time to call home and speak to their loved ones.

Bulsara believes building the brand is just what Sport Clips needs to work on, citing that the company must cultivate a "greater sense of corporate professionalism." He also urges Sport Clips to promote its salon locations on a local level.

This year, Logan says Sport Clips plans to open stores in eight new states across the Northeast. Much of the chain's success has come from its simple mission: to give guys a great haircut experience at a reasonable price. Says Logan, "We do great haircuts but we also know it makes a big difference to men if they're able to get in and out expeditiously and be entertained at the same time. We're continually looking for ways to make the experience even more enjoyable."

Visit the Sport Clips profile in our Franchise Directory.

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