Hello to all

[KB]

  I am new to this site and it is very informative and educational like no other. Being in my mid 40s I'm  getting tired of working for someone else doing the same thing day in day out for the last 20years. I've been thinking going into business for the last few years but never new what to get into. I thought about Subway but didn't like the idea of dealing with food or any fast food concept.
  I started to explore beauty salon franchises. In doing the due diligence with Great Clips, I was about a week away before signing the franchise agreement and they shut down my market (Vancouver, B.C.) for new franchises. The existing franchises complained to head office that they did not want anyone new and that they were going to open new salons themselves. Reading their disclosure statements that was true, an average owner after about five years owned about five salons and after ten years owned between ten to fifteen salons. Their yearly net was about $46,000 per salon.
  Now I'm starting to explore Regis corp. which owns Supercuts, Magicuts, Coolcuts and a variety of other brands in U.S. and Canada. If someone could share their experience or any other info., it would be greatly appreciated.  
 

[FuwaFuwaUsagi]

You can search this site and find numerous hair-cut threads.

Consider the following questions.

What value do you find in a any franchise as it relates to this industry vertical.  Consider:

a) There is a very low barrier to entry industry
b) Branding is ineffective
c) In economic terms this service is price elastic to a certain point
d) Immigrations impact on this industry
e) Assign a risk premium or cost to the restrictions of the FA

One more point.  In my area I can go to any chain and get my hair cut for $10-12.  However I can go to indys and get a $5-7 haircut.  Yep I said $5.   

There are other points, but you should consider the above.

[Franchise Pundit]

I agree with Fuwa.  I would also like to add some random advice if you decide to move forward with a franchisee or indy.  

• BRANDING If you can get a high foot traffic location, then a big franchise name is much less important.  The more out of the way you are, the less likely a 'generic' hair cut salon will succeed without heavy spend on marketing.    
• CUSTOMER EXPERIENCE. If you decide to roll your own, leverage what's out there and copy the "best of breed" design of an existing chain or do something creative or gimmicky to distinguish yourself. You can try combining concepts....such as doing simultaneous hair cuts and pedicures for a low price, adding a baby sitting service so kids can play while mom gets a hair cut and goes out for an hour of shopping, adding an x-box to each hair station so people can play video games while getting or waiting for a hair cut, or combine a laundry mat with a hair cutting shop.  People will pay a premium for experiences....figure out an experience that will motivate people to pay $2 more than the next hair cut shop.
• LEASE. You should be able to get a steal on rent because there are tons of closed retail spaces in great locations available for rent.  You can find plenty of ~1,000 square foot high-traffic spaces for under $20/sf except in high traffic indoor malls.  Return on Invested Capital should be your guiding light, so be smart about the remodeling costs.  A $20,000 return on a $40,000 investment is pretty good if your only spending a few hours a week managing.  
  
  Try not to personally guarantee any rent.  If the landlord requires it, try to negotiate a shorter period like you'll pay rent for up to 6 months after closing, offer to pay flat breakup fee, or try to limit the guarantee to the first 18 months. As far as where to put the location, the Great Clips CEO said "The ideal location for us is one that is most convenient to the customers and is clearly on the customers' errand path.  This means heavy retail traffic area with a No.1 or 2 grocer.  We've also done very well in strip centers anchored by Target or Walmart."

[michael webster]

If you can, talk with some people in one of the franchisee trade association as if you were going to buy.  They will have some useful advice for your.

[KB]

  Thanks for everyones input. The only reason I'm thinking of going with a franchise rather than opening something of my own is I have no prior business experience. I have no idea how to hire, market, lease, etc..The private salons for sale range aprox. $20,000-$100,000 depending on sales where as starting a franchise is $125,000-$200,000. From Regis corp. the only one I can open is Supercuts but the only problem is that there are none in my market, they are only in Alberta and Ontario. So basically I would be the guinea pig for them in my market(Vancouver, BC)  . I informed them that I would consider opening if there were some incentives there for me. They haven't got back to me yet.
  On the other hand private salons are so much cheaper that I'm leaning towards them. Learning all the aspects of running the business as I go. With Supercuts, I would have to travel outside of my province for all the training that they have to offer. Great Clips had a training center in my city.The one thing that bothers me with Supercuts is that only seven salons are opened by franchises in Canada and the rest are cor perate owned. I don't know what to make of that. 

[FuwaFuwaUsagi]

Greetings:

Some unsolicited advice.  If you are not a businessman do not go into business.

I understand that franchising is sold under the auspice that the franchisor has the knowledge and the experience and that they downstream the knowledge to you and they are a partner in your success.  The generalized reality is something very different for most concepts.  

Consider, if the zor truly had the ability to take a neophyte and educate them into being effective operators why would they not simply hire a manager and thus keep the profits for themselves instead of sharing them with an operator?   Do you not think the capital markets would not open themselves to such a venture?

Understand it is true they are a partner in your success, but understand they have very little skin in the games in regard to your failure.  More to the point they very much have an interest in siphoning off your profits into their coffers and leaving you as close to break-even as they can, as that is the pinnacle of their profit maximization.  Read that last part several times, till it sinks in.  The zor has a vested interest in seeing you remain at break even because then they maximize their profits.  

Once again, do not fall for the pitch that franchising is for those who do not have business knowledge, franchising is generally for those who can effectively leverage  a system to reap its benefits, that is a very different proposition.  

And of course you can find the odd franchisee with no business experience who has been successful in the terms as they define success.  The law of large numbers predicts such events.  In addition franchising is also suitable for those with knowledge in an industry but lack the business acumen (in other words the already know the operations side from experience - think the auto mechanic who decides to increase his earning potential by opening up his own shop).

But I would strongly caution anyone into going into business without business experience.  

Kindest regards...

[michael webster]

Please listen to Fuwa - if you have no prior business experience, then get some by working in one of these franchise systems.