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Responsible Growth: Case Study of a Mature Market
The Houston market is a prime example of the dedication Sport Clips has to growing the brand responsibly and by that, giving existing Team Leaders' expansion top priority.

Since he joined the brand in 1999, Joe Klimek has seen a tremendous amount of growth with Sport Clips Haircuts. At the time, the brand was little known, had only about 15 locations, and had yet to gain momentum outside of Texas. Despite the apparent risks, Klimek and his business partner, Bill Vandrick, took a chance and became the first franchisees to buy three store licenses at once.

“When we first became Team Leaders, we made every mistake in the book,” remembers Klimek. “We learned a lot as we began to turn it around. Most importantly, we learned to be successful you need to lean into the system. The system works! If you come into the system and try to change it all up, you will run into challenges, challenges that are entirely avoidable.”

Eighteen years later, Sport Clips is now a dominant haircare brand in the Houston market with 84 stores open and 20 more in development; a long way from its 1999 numbers.  Much of this growth can be attributed to Klimek and Vandrick who, for the last 13 years, have been helping other franchisees prosper in their role as Area Developers for the Houston market. In this role, they are helping the brand expand responsibly.

For a brand to see this kind of growth is one thing, but to see it be done in a sustainable and responsible way is quite rare. And Houston is a perfect example of this responsible growth strategy, having closed only a single store in the last 10 years. “We have done well in Houston because we treat the market with respect. We can never think we are too big for the market,” says Klimek.

While much of this success can be attributed to rigorous selection criteria for both Team Leaders (franchisees) and real estate, the company’s approach to market development is what allows them to be so selective. “When we determine how many licenses to award in any given market, we begin with a very conservative estimate,” explains Sport Clips Vice President of Franchising, Pete Lindsey. “Once we award that initial number of licenses, we close the market to new Team Leaders and allow the existing Team Leaders to fill in the gaps. Periodically, we review our market optimization criteria to determine if we should reopen the market or allow existing Team Leaders to continue the fill in strategy.”

This strategy has worked exceptionally well for Klimek and the Houston market. In the last five years, the market has grown from 64 stores to 84 and only added a single new Team Leader in that time. With 16 Team Leaders operating in the market and effectively filling in coverage gaps, the average Team Leader now owns 5.25 stores and has 12 years’ experience with the brand. This kind of existing franchisee expansion is the hallmark of a successful franchise system.  

Another factor in making growth sustainable is the support systems Sport Clips has in place. Klimek explains, “The support team never takes its eye off the ball. We always ask ourselves, 'how we can dominate the market and stay in front of the competition?'  We never want to allow ourselves to become stagnant. We are constantly looking for new tools to keep the brand fresh and relevant and to help Team Leaders grow.”

He goes on to say, “A big question for us is, ‘What else can we give them to help them succeed?’ Continuous improvement is the basis of what we do. We are always looking for ways to minimize constraints and remove obstacles for our Team Leaders to expand.”

Klimek’s approach to supporting his development area relies on some basic principles:

 

Be proactive: “Our real estate funnel gives a projection of what the future in their market looks like, so Team Leaders looking to expand can plan accordingly. The depth of information we provide is extensive. For example, we stay on top of Texas Department of Transportation’s development plans and stay informed with what is happening in the International Council of Shopping Centers. We have established relationships in order to keep top of mind awareness with real estate developers, so they let us know when a good site comes available. It is critical to stay engaged with the market. The retail space is highly competitive, so we want to be the first brand these developers think of.”

Stay transparent: “We share market information between everyone including operational and same store sales numbers. We also have a Real Estate Priority List, showing everyone where they stand so they can make their expansion plans accordingly.”

Communication: “From online signup sheets to weekly metric reports to Google calendars to industry news emails, to quick response times to emails and messages, we are constantly in touch with our network. Sharing information is important, as is celebrating victories. Clear lines of communication are a fundamental part of how we keep things moving forward.”

Be consistent: “We are consistent in everything we do. From updating metrics and sharing them between stores to being a resource the Team Leaders can rely on. It is about showing up and giving everyone our best. This is one of the core values at Sport Clips.”

 

The Houston market is a prime example of the dedication Sport Clips has to growing the brand responsibly and by that, giving existing Team Leaders' expansion top priority. This approach, along with the brand’s robust support systems and proven business model, have made it possible for the brand to sustain such tremendous growth, propelling it to become a dominant brand in the haircutting industry.

For more information on growing with Sport Clips, click here

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