Hair Salons: They're Not Just for Women Anymore

The hair care industry is a $50 billion annual business in the U.S. Seems as though there's a hair cutting niche for every type of American. There are salons for guys, gals, kids, even pets. It's a highly fragmented industry composed of mom-and-pop shops as well as franchise operations. And in 2006, it continues to be a strong area for franchising.

The list of franchise possibilities is long, and includes Great Clips, Pro-Cuts, and Sport Clips, to name just a few. The biggest player, with nearly 11,000 salons in North America, is Regis Corp., with its Regis Salons, MasterCuts, Trade Secret, Supercuts, Cost Cutters, and SmartStyle brands in the U.S., and First Choice Haircutters and Magicuts in Canada. So what do they offer, and what makes them unique?

Consider Doug Barnes. He operates 15 Cost Cutters stores located inside Wal-Mart Supercenters throughout Nebraska and Iowa. His thinking is that the next time Dad goes out to buy a new deck chair, some light bulbs, a shower curtain, or trash bags, he may be inclined to slip in a quick haircut.

"The Wal-Mart locations offer us built-in traffic and are a perfect match for our clientele, the cost- and value-sensitive buyer," says Barnes. He says most of Cost Cutters' customers are walk-ins, which works very well inside a crowded, frequently visited Wal-Mart. His other stores, including three Supercuts, are primarily located in strip shopping centers. In fact, one of his near-term goals is the expansion of his Supercuts stores into more shopping centers. "Our shopping center locations have done well when there are strong anchors such as grocery stores, Target, and even Wal-Mart." He says when the business is primarily walk-in, it's essential to have a busy retail environment to draw in business. And location is important. He says his stores compete with numerous mom-and-pop salons as well as other franchises like Great Clips.

And Great Clips is indeed a hot competitor in the industry. The Minneapolis-based franchise was ranked the 20th fastest-growing franchise by Entrepreneur magazine in 2006. The company, which began franchising in 1983, has more than 2,500 Great Clips salons operating in 120 markets across the U.S. and Canada (about 2,000 are in the U.S.). In 2005 alone, Great Clips opened 214 new salons, and 85 franchisees joined the company. If there were any question as to what market Great Clips targets, consider that the company sponsors a vehicle in the NASCAR Busch Series.

Tapping into that male market has also helped Supercuts add market share. The franchise strives to offer a contemporary, comfortable atmosphere that appeals to men (about 70 percent of its business) in search of hairstyles at affordable prices. Its strategic locations are selected based on location and convenience that will build repeat business.

Sport Clips is one of the latest contenders in the male market segment. Targeting men and boys, Sport Clips provides quality haircuts in a fun sports-themed environment, complete with TVs tuned to sports at every stylist's station. The company says every Sport Clips has "guy smart" stylists who focus on providing the highest level of service to every client. The Georgetown, Tex.-based enterprise has more than 300 stores in 28 states.

As they say in the sports world, are you ready to take it to the next level?

Published: March 14th, 2006

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