Not ALL the recent comments about the Sport Clips franchise have been negative.
One commenter, who claims to be an experienced franchise owner with three decades of experience, claims that Sport Clips is a great business model and that every one of the franchisee’s stores has been profitable.
According to the Worksforus, “operated PROPERLY, this concept is an easy winner.” He/She states “Most people that fail need to look in the mirror and stop blaming others for their lack of business success.”
We are happy with our Sport Clips stores and wish we had gotten into the business sooner. We don’t agree with everything that happens at Corporate but it’s unrealistic to expect otherwise. No one gets along or agrees 100% of the time.
We’ve been involved with different franchises for nearly 30 years and find Sport Clips to be a great business model. We have yet to have a store not make money. Nothing is fool proof but operated PROPERLY, this concept is an easy winner.
Most people that fail need to look in the mirror and stop blaming others for their lack of business success. The tone of some of these commentors gives great insight into why they may have failed.
Of course, the lone positive comment of the month prompted a quick rebuttal. Sat 11/14/2009 10:23 AM Doesn’t Work for LOTS of people wrote:
You write: “We have yet to have a store not make money.”
What state are you in?
Have you talked to franchisees in Calif or any of the states in the south, whether it be Louisiana, Georgia, Florida? The store average for the 140+ states in the southeast is barely $4,000 a week, for both service and retail. These people are not making money.
You write: “Nothing is fool proof but operated PROPERLY, this concept is an easy winner.”
Are you aware of the corporate store in Jacksonville, Fla? I have informatrion from a franchisee down there that this store has been opertaing as a corporate store for two years. Surely SC is operating their own store properly? After two years that store is averaging $3,300 and 230 customers? Do you consider that a winner?
You write: “The tone of some of these commentors gives great insight into why they may have failed.”
I followed the advice of some of these commentors and called lots and lots of former owners. What I heard makes me think that you have it backwards. The tone reflects not why they failed, but the fact that they were bullied by the franchisor, that they lost their life savings, and that the system fails many times in spite of how hard they worked.
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View Comments
I didn't realize that the ostrich was a native animal in the Land of Lincoln.
You have more than one store at $4,000 a week and you think you're making money?
Based on the information in the latest UFOC, for company stores at the low end (and none that they disclose are at 4K a week; they are higher), here are the expected expenses:
Payroll at 50% is $2,000
Rent at 21% is $840 (and rent and CAM is probably higher than that in IL) Advertising Fund is $300 (this is 7.5%. yikes!!) Royalty at 6% is 240 Training is $60.
That's total expenses of $3,440. Add in 10% expense for utilities, insurance, supplies, setting money aside for the annual convention, and you end up with a weekly operating profit of $160.
Factor in that it costs you $200,000 to get the salon open and this is a financial disaster. Then factor in what you can sell this salon for when you get ready to exit. If revenues are $4,000 you will be very lucky to get $20,000 when you sell. That's before you shell out for retrofit at transfer and the transfer fee of $5,000 in the UFOC.
In short, operating stores at weekly sales of $4,000 and feeling good about it is burtying your head in the sand. "Very successful" at $4,000 a week? ROFLMAO.
Regarding the Jacksonville store, the company knew the location and the history before they took it over. My source says it had higher weekly sales with the original owner, than after two years of corporate ownership. Maybe your area developer can shed some light on the situation?
I called and listened to lots of former and current owners. It was an even split between those still in the system, and those who left. It is hard to speak with current owners though, since the UFOC gives out store numbers for them.
People who ignore econmic reality and wear rose-colored glasses are destined to fail. Eespecially when they have their head buried in the sand.
You write: "The system works if you work the system. The team leaders didn’t excute the system."
As detailed in my previous posts, please explain why the store that Sports Clips has owned in Jacksonville, Fla for two years is only averaging $3,300 a week and 220 customers? Surely the corporation is working the system? Why would they not execute the system in a store they have owned for two years?
There are 140+ stores in the southeast averaging barely $4,000 in sales a week. Are all of these owners not working the system?
You write that you have pru\\urchased underperfroming stores and turned them around. Congratulations.
You have a huge opportunity to purchase many stores in the southeast and California. I bet if you told your Area Developer to put the word out that you are in the market to buy stores for $20,000, take over the debt, and take over the lease, that you would be able to quickly acquire at least 50 more salons.
You are seriously not worth my efforts. Think what you will, say what you will, attack who you will. We are happy and successful and you are a miserable person with a horrible attitude. People like you fail throughout life and blame others. Good luck! I mean that because you NEED it!
Sport Clips "works for us" and not for you. Fine, go away. Don't attack me for being a success. Go and try to succeed somewhere else. Please.
So you invest 200K into a salon. You gross 4K a week. If you're lucky you net 200 a week. After 5 years you have to spend 20K to retrofit the salon. After 10 years you can sell it for 20K: if you are lucky.
Nobody in his right mind would invest in a CD with that return. At least with a CD you'd get your money back at the end.
You may be happy.
But you are not even remotely successful.
Keep that head buried in the sand. From everything I have learned, being an ostrich with poor financial skills is what Sport Clips is looking for in their franchisees.
Is Sport Clips a Great Franchise? In my opinion, Yes!
Sport Clips is no guarantee, but there are many successes to point to. As a multi-unit Team Leader I am happy to share the fact that my experience over the past 7 years with Sport Clips has been a blessing. After years of working for corporate America and never feeling like I was getting ahead, my wife and I were able to grow our Sport Clips business to a size that allowed me to leave that world. Together, we now oversee 10+ locations and employ over 100 team members across two states, all while raising 3 young boys.
Easy? No. Rewarding- Absolutely!
Is it always a bed of roses? Absolutely not. We have had dark days when payroll was tough to make, and the agony of losing what we considered to be key employees. There have even been days when I questioned whether we were making the right decision to even try and be in business for ourselves, versus the security of my “day job” as we referred to it.
After seven years of working in,on, and at this thing called Sport Clips, I believe there are a few tangible characteristics, and equally a few “in-tangibles” required to give you a chance at success. Location, Manager, and Team are the key drivers to your success or demise in this business. I believe the biggest “in-tangible” is the culture that you ultimately create with your team based on trust and commitment to one another. And let us not forget the element of luck, albeit good or bad, which I believe exists in all we do.
If you’re unfortunate and you end up with a bad location, often times a great manager and team can fix this, but again no guarantee. Equally if you have a great location, but a bad manager who can’t attract, train, and retain talented team members, then a struggle may be in your future. On top of all of this, if you as the Team Leader get into this business and think that all you have to do is open the store, then you are more than likely destined to fail.
While I genuinely sympathize with those who have not found success as Sport Clips franchisees, I find it equally absurd that anyone would attempt to lay this at the feet of Gordon, Clete, or anyone else who works for the franchisor. The last time I checked, we as “franchisee’s” came looking for the business opportunity, did our due diligence, and ultimately decided whether we felt this was the right opportunity for us or not. At that point, Sport Clips then decided whether they felt we were equally a good fit for them as well. While I may not always agree with the decisions that are made by the Franchisor, I do respect the fact that they make those decisions with a goal towards making and retaining our brand as the best in the industry. Are they perfect? No, nor are we. Just men and women like you and I.
A final thought to all that would consider Sport Clips as a business venture: When you’re evaluating various business models and industries to get into, the first thing you have to know going in, is that your odds of success are statistically stacked against you. Not my theory, the facts. With that notion in mind, many will turn towards “franchised” business models because the thinking here is that the Franchisor has already figured out all the difficult tasks and decisions that need to be made. In the Hair Care industry, what has impressed me the most is the level of detail that Sport Clips has gone to, to try and provide me as the franchisee with the blueprint for success. Is it fool proof? No. Can it fail? Yes. However, here are some cold hard facts that even the most disrespectful critics on this post cant challenge- On a report this past week, only 26% of the total stores opened for more than 1 full year were operating below $4500.00 in weekly sales. The other
74% are not only operating at levels that meet or exceed break even, but in 2009 are averaging 7% year over year growth. I know, its only one week in the middle of November, however can that be said of anyone else in this industry or any other similar industry in these times? Additionally;
- the avg. weekly sales for all stores opened 1 year or more is $5487 per week.
- The avg. weekly sales of all stores opened more than 2 years is $5743 per week, and this number gets better with every year of operation
- Over 150 individual franchisee’s own and operate 2+ Sport Clips locations. Fool me once…
Bottom Line:
This business is not rocket-science. Men and boys are getting their haircut on average about every 3-5 weeks, somewhere. The Sport Clips model is built around providing an environment that clients will enjoy, and a service that makes them want to come back. We personally have the great blessing and fortune of serving over 4,000 of them weekly.
Is it a guarantee? Absolutely not. But give me an opportunity where almost 75% of the time I can be successful, and as my history has shown, I’ll do this time and time again. Thank you for the opportunity Sport Clips!
for any prospective owners out there. do not do this. you will loose everything. it is a scam and you will loose everything you put in / your sanity / and probably your marriage or relationship. you will be nothing but a patsy helping these scums build a brand and make royalties while you continue to borrow money to hold on. out of 650 stores i would wager that only 10% of them actually turn a profit and could prove it. this is wrong ...these people need to be stopped. I am in my 3rd year of ownership and have lost everything.
Isn't it a shame that franchisors are NOT MANDATED by government to disclose the success/profitability of the franchise before they sell it to the public -- in terms of unit performance of the system-- that would then disclose the odds of profitability or lack of profitability to the prospective buyer of a franchise.
Why should new buyers have to do their due diligence with other buyers, past and present, of the franchise system? Why is franchising treated uniquely under the law and the SELLER, the FRANCHISOR, who profits, is not required to disclose this material information, i.e. profitability and failure of founding franchisees to the prospective BUYER?
Read about this flaw in government regulation that sets up marks for the franchisors in the Article "Franchise Regulation Realities -- Deception or Patriotism" and look at http://thegreatfranchisingrobbery.blogspot.com.
Here's the real shame: People who want to go into business for themselves but won't accept responsibility for their own decisions. Nobody put a gun to your head and made you go looking for a business. Nobody forced you to buy a franchise. I bet none of the whiners here even READ the agreements they were signing.
Why are you whiners here instead of in court winning a big judgement? Because you signed franchise agreements you probably didn't read, hoped for the best and now don't want to abide by them.
I bet if you were successful you'd be taking all the credit but since you failed and bought a loser franchise it's all someone else's fault. Maybe the government regulation should be not letting people start a business unless the agree not to whine when they go broke.
Guest is partly right, but misses the point that it is impossible to perform adequate and effective due diligence on what is mandated to be disclosed under the FTC Rule and the State FDD's. The disclosure document together with the "boilerplate" signed franchise contract does generally protect the franchisor from charges of fraudulent inducement/omission in the sale of the franchise.
Robert Purvin indicated to the FTC in public comments ten years ago that the purpose of the regulation of franchising by the FTC was to protect the franchisors from fraud. (Available on this site under L&W franchise comments)
Obviously, as Robert Purvin of the AAFD and Susan Kezios, and many other franchisee advocates have indicated to the FTC and to the Congress, the failure of the FTC to require that the franchisor, himself, disclose ANY unit historical financial performance statistics to new buyers is misleading by omission and constitutes a flaw in government regulation that hurts prospective franchisee who haven't been provided material information on which to assess the risk of the investment.
What, then, is the purpose of regulation? Apparently, the purpose of regulation is to protect franchisors and their franchisees who do thrive, like "guest," from those who don't thrive and believe that they were fraudulently induced to contract because the "material" risk in terms of unit historical performance of the system was not disclosed to them by the franchisor, who always profits, before they purchased the franchise.
Perspective is everything! huh! http://thegreatfranchisingrobbery.blogspot.com
For a very few, this franchise works. For the majority of astute business leaders that look at it as an investment and a way out of the Corporate rat race, it is waste of money. Why? Because once your sucked in, your prior skills in marketing and operations will be thrown away by Gordo and his rules and idiot staff of minions.
As someone who suffered in this system for years, lost $500K and is now back to running a Fortune 500 company, this is the worst investment in the history of franchises. The business model is adequate, the problem is the owner, the trained monkey staff and there is NO SUPPORT. Oh, and the pool of hairstylists that will work in these sweatshops. Talented stylists who are succesful would be absolutely dumber than dirt to work in a Sport Clips. Leave these places to the dope heads, crack whores and morons who will settle for $10 an hour.