Great Clips

A Franchising Journey
by Annie Locke

Dave Hands shares his journey to financial security by choosing the path of franchising.

Having spent 18 years in corporate America, Dave Hands fell victim to what he calls “Sunday-night stress”—going to bed with clenched fists on Sunday nights for fear of being laid off Monday morning. In 2005, while working as managing partner of a pharmaceutical staffing company in Chicago, his fears came true.

After overseeing a formidable sales increase—from $2.7 million to $45 million in just seven years—Hands’ company was sold, and he found himself without a job. “I realized… it doesn’t matter how much ‘Sunday night stress’ I have or how well I performed,” he recalls. “As part of that machine, I was always open to that lack of security.”

The cure for Hands’ stress? Entrepreneurship, and specifically, franchising. The very day he lost his pharmaceutical job, he and his wife, Tanja, grabbed a bottle of red wine and thumbed through Entrepreneur magazine’s Franchise 500 list, scanning it for opportunities. Eventually, they found what they were looking for. Returning to the city of his wife’s alma mater, Bradley University, the couple opened a Great Clips hair salon on Rockwood Drive in Peoria in 2006. Today, they own 10 locations in central Illinois, with plans to add four more over the next two years.

Why Franchise?
Eight out of 10 new businesses fail within the first 18 months, according to Forbes magazine. Starting any new business comes with risk—but that risk can be reduced by licensing a franchise rather than starting a business from scratch. “Ultimately, if you don’t have the perfect idea that you can patent, license and start a business with, there is nothing wrong with taking somebody else’s idea and making it even better,” Hands declares.

With the franchising option, one can utilize a proven business model—probably its greatest advantage. When Hands selected Great Clips, he chose a franchise with three decades of industry experience, stepping into an already-perfected business plan. “I spent 18 years in corporate America, always trying to think of that entrepreneurial idea, but never did,” says Hands. “That’s why I turned to franchising… It’s like a race to the finish line, and some people do not have the money or the time to build the course. You sort of… jump in the race at the three-quarter mark.”

In addition to its proven business model, franchises offer a number of other significant advantages, such as brand recognition. Not only do they often possess a built-in base of customers already familiar with the chain, the franchise owner typically receives support from the corporation, both at launch and in everyday operations.

The Perfect Recipe
When Dave and Tanja Hands studied the Franchise 500 list, they were looking for four primary characteristics:

  • It must be Internet- and fad-resistant—a business that would stand the test of time and not be subject to erratic trends.
  • It must be a business he could work on, but not in. Hands wanted a business in which he could apply his strengths in marketing and sales. Though he did not have much experience in cosmetology, the model allows him to develop stylists into store managers while he oversees high-level operations across all locations.
  • The business must have multi-unit potential, offering the possibility of additional locations in the future.
  • Finally, it must have the capacity to employ a large workforce. Including the four locations Hands plans to open over the next 48 months, his Great Clips franchises will have added 120 jobs to the local economy.

Though Hands created this list of criteria based on his own specific goals at the time, he believes many aspiring franchisees can adopt the same recipe—getting started by simply perusing the Franchise 500 list, available at entrepreneur.com/franchise500. “It sounds a little bit basic,” says Hands, “but taking the Franchise 500 list and inserting yourself in each of those businesses as you read through them is the first place to start.”

With a Little Help…
While Hands had 18 years of business experience, he didn’t launch the franchise without assistance. After deciding on Great Clips, Hands turned to the Turner Center for Entrepreneurship at Bradley University for guidance on starting a business. With Illinois Small Business Development Center Director Ross Miller leading the way, Turner Center staff helped Hands identify the competition, develop a business plan and navigate the state’s business climate, which can prove challenging for new business owners, he adds.

Hands also credits the support and encouragement of his wife for their success. “She was there when I came home in 2005 and told her I just lost probably the best job I ever had,” he explains. “She just looked at me and exuded confidence that this was no big deal… Her support has been amazing.” Having helped get the business off the ground, Tanja Hands runs the back office and human resources, supporting her husband both professionally and emotionally.

Even as Tanja and Dave Hands’ management skills have grown over time, they recognize leadership development as a critical factor in their success. Not one of the managers at the Hands’ 10 salons had previous management experience before being transformed from stylists into managers. “We take people who typically had high-school educations, put them in $350,000 operations, and they succeed,” says Hands. “A year [later]… we all look at what they accomplished, and they say, ‘I didn’t know I had that in me.’”

Sky’s the Limit…
Hands has experienced great success with Great Clips, maintaining an 84-percent retention rate among its customers, who return for the salon’s reliability, consistency and shorter wait times, he explains. While he has plans for immediate growth in the next two years, he would ultimately like to open 25 Great Clips salons throughout the Peoria, Bloomington-Normal and Decatur areas.

While he has been remarkably successful in his new career path, Hands admits that opening any new business is no easy task. “The jump from corporate America to franchising was not without pain,” says Hands. “It was tough getting it off the ground, but because we were with a strong franchise, we were able to get to financial stability quickly.” iBi

 

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