When the Answer is No
As director of franchise development for Great Clips, Inc., I talk to a lot of prospective franchisees as part of our recruitment strategy. Recruiting franchisees is important business. Companies want to attract the best and the brightest to their systems so they invest a lot of resources—both financial and personal—in the process of identifying, evaluating and qualifying prospects.
The best part of my job? Getting to talk with people who represent a wide spectrum of professions, locations, backgrounds, and interests, and helping them explore the idea of becoming a Great Clips franchisee. The worst part of my job? Sometimes having to say “no.” Usually, that’s not a comfortable conversation to have. There are times when the decision may seem arbitrary, even unreasonable, to the person who had hoped to join the organization.
So, I thought I’d take the opportunity to explain the thinking behind some of those decisions. Most occur early in the application process. But some denials happen when it seems the prospective owner is well on the way to finalizing an agreement. Often, it’s a combination of factors—some having nothing to do with the potential owner—that results in a, “We’re sorry, we have to say no” response.
The number one reason for a denial is our corporate responsibility to the health of the Great Clips brand. That’s a broad statement but it boils down to this: We are dedicated to the success of our current owners and doing all we can to make future franchisees successful, too. What does that mean in practical terms?
Geography is often a big factor. We’ve had tremendous success since Great Clips got going in 1983. There are more than 4,100 salons in the system, and the stylists in those salons are on track to provide 100 million haircuts this year. We’re a billion-dollar corporation. That success affects growth in ways that relate to geography and location.
Some markets are closed. We’ve reached the optimum number of franchisees in states like Colorado, Kansas, North Carolina and Hawaii, to name a few. If there’s room for growth in a particular market in one of these states, it’s likely a current owner will open any new salons. There are still plenty of open markets —some in California, New York, South Florida, and Tennessee, for example. (Read about how one franchisee is growing the brand in the Memphis market.)
Another location-related challenge is local ownership. Great Clips wants salon owners to live in the market where they intend to open their salons. Much of this is because we believe community involvement plays a critical part in a new franchisee’s success. After 35 years of franchising, we have learned that the most successful new franchisees are those whose salons are near their primary residence so they can be involved and engaged in their new role as business owner.
There are other practical reasons that can contribute to a franchisor saying “no” to a prospect. There may be financial or legal hurdles. The timing might not be right. It could become apparent that the candidate simply doesn’t have the time to dedicate to operating a business, or that the nature of the business (in Great Clips’ case—managing people) is not a match for their skillset.
My job is to make sure a prospective franchisee has the potential to succeed. Most of the time, I can see that, and I’m thrilled to say, “Yes!” But when I can’t, it’s in everyone’s best interest to say, “No,” however difficult that may be.
There are a few not-so-tactical factors that go into franchisee recruitment and selection. In a future blog, I’ll talk about the elusive but critical element of “culture fit.” In the meantime, I’d love to hear from you if you’re thinking about investing in a franchise business. What do you look for in a franchisor? What are the practical issues you’re facing? Leave a note below, or give me a call!