Francorp Client - Great Clips

Check out this article in Entrepreneur Magazine about Great Clips. RFG hired Francorp to identify if Great Clips was a good acquisition. After Francorp's analysis, RFG ended up acquiring the company. For more information on franchising go to www.francorp.com or for finding the right franchise consultants go to www.francorp.com.

How to Grow Without Growing Pains
Ray Barton transformed Great Clips from just four hair salons into nearly 3,000, and he did it by turning down franchises that didn’t fit into his expansion strategy.
http://www.entrepreneur.com/startingabusiness/successstories/article196924.html
By Geoff Williams September 10, 2008
www.Entrepreneur.com

You'd never know it, but during his childhood, Ray Barton could barely afford a haircut. Now, the 59-year-old Minneapolis, Minnesota, native is the CEO of the 2,700-salon franchise behemoth known as Great Clips.

Like Barton, Great Clips has its own humble-beginnings story. When Barton took over as CEO in 1983, the 1-year-old company had four locations. In 2007, his hair salon business had more than $650 million in sales, and he expects that number to top $1 billion by 2010, when the franchise will have 3,000 locations across North America.

Despite its success, Great Clips still manages to be rather invisible. It doesn't get the fawning press coverage, probably because it didn't reinvent an industry the way Fed-Ex, Amazon and Google have, and it stays under the radar in ways that Starbucks and Wal-Mart never could. In other words, Barton's company is the quiet success story that many entrepreneurs dream of achieving.

How He Did It
"There's nothing special about my background other than I worked hard, and I dreamt big," says Barton, adding that anyone could duplicate his formula to success: embrace teamwork, have a vision, surround yourself with great people and have a little bit of luck.

And maybe it helps to grow up poor. Barton's father was a construction worker who specialized in building grain elevators, traveling to where the jobs were with his wife and six children in tow. With money tight, Barton's mother was often starting her own businesses, from running a drive-in restaurant to opening her own cheese shop.

The children were encouraged to find odd jobs. Barton's first was organizing soda bottles at a drugstore. Later, like many children who grew up in 1950’s America, he made money mowing lawns, shoveling snow and delivering newspapers.

Poverty in his childhood served as an incubator for dreaming of a better life.

"I saw people living different lives," Barton says, "lives that I thought would be fun and more comfortable, and I was willing to work very, very hard to get to where I wanted to go."

Ultimately, that meant going to four different colleges and eventually getting his accounting degree. After graduating, Barton worked for a CPA firm, but it was developing and servicing franchises at a real estate agency where Barton began to see the power of franchising.

Barton, who by now was married and had started a family, realized that the hair care industry had numerous independent operations and plenty of potential for turning their capital and talent into a nationwide company. Though he admits he wasn't the first to see hair as a franchising model--Fantastic Sams and SuperCuts had beat him to that--he recognized that there was room in the industry for at least one more.

In 1981, Barton became the first investor-owner of a franchise called The Barbers. While the franchise endured for another decade, Barton left a year later, somewhat disheartened by his experience.

Two fellow Minnesotans Barton met during the course of his first year in hair care, Steve Lemmon and David Rubenzer, approached him about being a partner in their venture, a business called Great Clips. The men liked his background and business acumen. Barton politely declined.

A Strategy to Success
Five months later, badly needing something stable, he went back with a change of heart. But despite losing two jobs in a year, "I don't even remember being discouraged," Barton says. "I just thought, 'I'll go find something else.' I've always been willing to work very hard. I think that's an important part of it." Five years later, with 150 salons across the country, Barton presided over his first Great Clips franchisee meeting.

In addition to working hard, Barton recommends surrounding yourself with great people and remaining true to your business plan and long-term vision. From the beginning, Barton had a clear-cut strategy to grow the company by spreading out slowly, rather than wildly crisscrossing the country. When one Indiana entrepreneur offered $10,000 to open a Great Clips, Barton told the man they weren't ready to do business yet.

The Indiana entrepreneur--eitherfilled with chutzpah or trying to impress Barton--filled out the application anyway and sent a $10,000 check to get the franchise process started. Though that $10,000 would have been nice to have deposited in the bank, Barton sent the check back. He was positive that moving into a new state too soon would take his focus off the franchises he was nurturing.

"We grew slowly at first, and because our foundation was so solid, we were able to continue our growth," Barton says. "But we had to focus first on helping our franchisees be successful. They have to be successful and profitable if you want to build a successful company."