Thinking about becoming a franchisee? Excited about the opportunities out there but overwhelmed with what you need to know? We?re here to help: The Franchise Blog is presenting a series of informational posts about how franchising works. In the coming months, we?ll share valuable information from Great Clips franchise professionals and other franchising experts.
Jim Reynolds
Senior Real Estate Manager
This week?s guest blogger is Jim Reynolds, Senior Real Estate Manager for Great Clips, Inc., who shares information about how Great Clips helps new franchisees find the best locations for their salons.
Without a doubt, real estate is the first thing new Great Clips franchisees ask about. They?ve just been through a thorough approval process and they are ready to move. And we don?t disappoint them! Once a Great Clips franchisee is officially approved, someone from the real estate team gets in touch with them within 24 hours. (This 24-hour response time isn?t just for new franchisees. It?s a commitment we make to every franchisee in our system?that they can call us anytime and someone will get back to them within one business day.)
The first step is to set up the real estate orientation call. During this call?generally about 90 minutes?we?ll show them how to find information about the company and our real estate processes online, including orientation courses, training guides, company policies and other documents.
And, of course, we talk about what they need to do to find their first salon location. We make it clear to the franchisee that, when it comes to finding the best location, they?re not on their own?we want them to leverage our resources?but it is their business and they are responsible for finding and evaluating potential locations. Because of the franchisee-franchisor business relationship, it?s important to be clear that they are the ones who will be making the final lease arrangements.
But, we give them as much support and information as we can because, after all, we want them to be successful, and the location of their first salon is a key factor. So in our first few meetings, we help them understand what they should be looking for.
The biggest challenge new franchisees have is learning about what constitutes a quality site and how it relates to a successful operation. Real estate is just part of the successful salon equation, but a very important part, especially for a first site. In the business of a walk-in haircare salon, a quality site is one that is in a good ?daily-needs? trade area?a natural errand path for the residents in the neighborhood. That?s why many Great Clips salons are located in centers with the No. 1 or No. 2 grocer in the trade area, the dominant drug store chain, and many national shop retailers most people recognize like Starbucks and Subway.
For the typical Great Clips customer, visiting a salon isn?t part of their daily routine. Instead, our customers visit us every four to seven weeks and while many people visit our salons on a routine timetable, some like to combine that visit with their other errands. So the best locations for our salons are in shopping centers our customers go to frequently. They see the Great Clips salon multiple times per week. When it?s time for their haircut, they instinctively know where to go because they don?t have to hunt to find their Great Clips salon.
As you can imagine, these types of locations can be hard to find, and good sites should be thought of as precious commodities One of the advantages a Great Clips franchisee has is access to our Exclusive Agents (EAs), local real estate market experts who are available to help identify locations. Plus, the Great Clips real estate team has a lot of experience with landlords and developers. We can leverage our relationships to become aware of opportunities in centers that may not be in the public eye yet. We can help identify sites and refer the franchisees to check them out. We also help review site plans, location demographics, and Letters of Intent. Most new franchisees don?t have experience with developers so they are very open to our guidance and advice, especially with their first salon.
Once the franchisee has decided on a location, and we?ve all agreed that this is a quality site, the franchisee negotiates a Letter of Intent with the landlord (most of the time with our help and oversight). When that is finalized, the franchisee presents the real estate team with the agreed-to LOI and requests formal consent from Great Clips. Once the lease is signed, we hand them off to our facilities team who help with the actual ?build-out??from the design on paper to equipment orders to signage to contractors. Our Business Services and Marketing teams also engage at this point to help them plan their grand opening.
The bottom line is that we want our franchisees to be in the best location possible?in terms of customer traffic, neighboring stores, demographics, staffing availability and competitors. Our role is not to tell the franchisee what to do, but to be a partner and consultant who can help them reduce their business risk and build a successful operation. The smartest thing a new franchisee can do is take advantage of the experience of his/her franchisor. After all, we?ve been through this before!
Are you a new franchisee? What?s your biggest concern about finding your first location?
Are you a seasoned franchisee? What?s the biggest lesson you learned about location?
Rob Goggins
SVP of Real Estate & Development - Rob joined Great Clips in July 2007 as Vice President of Franchise Development. Prior to Great Clips, Rob was Vice President of Franchise Development for Service Brands International. In that position, Rob helped grow franchise sales for all four of the Service Brands franchise concepts.
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