This article appears in the Nov/Jan 2020/21 digital edition of Inside Franchise Business, which you can download for free.
Just Cuts, renowned for its no-appointment hair salons, is celebrating 30 years in business in 2020.
JUST CUTS Founded 1980 Term: 5-7 years Capital investment: $170,000-$250,000
The brand, founded by hairdresser Denis McFadden who still leads the company, now stretches its reach beyond the 190 franchises in Australia with 34 overseas outlets.
IFB: WHAT HAVE BEEN THE BIGGEST CHALLENGES FOR THE BRAND, AND HOW WERE THEY OVERCOME? GM Amber Manning: Covid-19 presented a completely new challenge given the close contact involved in hairdressing. We had a huge decision to make as a business to close or not to close in April for the safety of our owners and stylists across the country. For the first time in 30 years we made the decision to close our salons for the safety of our teams. This was the hardest decision to make however the best for our business to ensure our stylists felt safe and supported in the workplace. The next challenge was re-opening with staggered approaches across Tasmania and Victoria with cases popping up.
IFB: WHAT SUPPORT WAS PUT IN PLACE FOR FRANCHISEES? AM: Our Covid protocols were implemented using our new Op Central online compliance platform. This was launched just before the pandemic hit and has been an amazing tool to integrate learning across our salons. We instantly went virtual, implementing monthly Zoom owners’ meetings, weekly Franchise Advisory Council meetings at the height of the pandemic to make key decisions for our network. Just Cuts launched an incentives platform for our franchisees so they received a commission for product sold online where they select their salon as a favourite salon. We launched online gift vouchers so they could be used at a later date. We enhanced our online app and kiosk check-in terminals for contactless payment. On Op Central, we can also send out audits and tasks that our franchisees or salon team leaders complete online, and they can upload responses and images we can review. The support team was able to get visual confirmation that our salons were correctly displaying our Covid-19 marketing material including social distancing floor decals, ‘do not sit here’ cards in our waiting areas and salon shop front TVs showing our health and safety videos. Our multi-salon franchisees were particularly enthusiastic with the enhanced salon visibility arising from the change as some can’t travel to visit their salons in person. Op Central also has a news section, so any important announcements are sent to all owners or team leaders instantly which they sign off on and share within their salon teams.
The true benefit from Op Central is having our franchisees, salon teams and clients all staying safe in every one of our salons during Covid-19. The Hivemind App indicates information such as wait times, stylist arrival times and break times which helps franchisees run their salons. We also have a salon busy period report which assists them with rostering. Franchisees can access an extensive amount of information across the network daily via our ‘Just Online’ point of sale (POS). The owners dashboard allows easy tracking of wait times across salons, timesheets for staff, daily sales, percentages and their highest performing stylists. This data can be benchmarked and tracked anytime based on our key KPIs: average spend, cut rate, and male / female clients. We report on this quarterly to owners. Head office conducts regular feedback surveys and uses a system called Text Magic for instant voting/feedback from franchisees. We rely on our Franchise Advisory Council members to help gauge the current levels of customer satisfaction and engagement for owners. Industry surveys are conducted regularly to see where the group sits overall in franchising and our franchisee satisfaction levels. To reward high performing salon team members we use ‘WOW pins’ which are given to stylists for every compliment they get, and a diamanté pin for every 10 compliments. We also include a signed letter from our CEO with the pins.
IFB: HOW IS THE BUSINESS FARING NOW? AM: Our network is currently sitting 20 to 30 per cent down depending on the area, for instance Victoria and Auckland closures. Luckily for us you cannot get your haircut online and we have contactless check-in, along with masks available for clients on request, which reassures potential clients.
IFB: WHAT KEY LESSONS HAVE BEEN LEARNED THAT WILL CHANGE FUTURE OPERATIONS? AM: We have a three-year strategic plan and an annual business plan which is developed by our Academy Team and CEO. We have learned that online training and induction are crucial; even when we go back to a normal world virtual will still play a key part in our business. Just Cuts has opened three salons during lockdown and been able to achieve this
In 2021 Australia will have 10 new salons, New Zealand another five, and a further 20 in our fast-growing UK market.
virtually through existing local franchisee and stylists’ support. Our operations model has changed to encourage greater engagement with our hairdressers. We are running trivia nights and ‘owner on the couch’ topic sessions have been increased from quarterly to monthly. I believe this will be something that will remain in the business. Our POS system collects data daily from every salon. We combine this information with Sprout Social reporting to review and update our content strategy by country, state and salon. This is then compared with data from our Review Trackers consumer sentiment monitoring to guide the development of our short and long term strategies. Research includes reviewing the most recent IBISworld retailing reports and hair and beauty industry reports to identify general trends, and grow our JUSTICE Professional product range. The annual plan includes a budget which is presented at the start of the new financial year. Every department comes together to review results from the previous year and share input on how the plan and budget will be achieved and the lessons learned. To monitor progress, we have weekly and monthly meetings to review salon performance, and we provide additional support to any struggling salons.
Franchisees are involved in setting and evaluating our business goals through formal quarterly and monthly meetings and informal face to face planning sessions. We also regularly conduct informal and formal surveys with both stylists and franchisees to gain insights into training, operational and marketing needs. Franchisees can explore the impact of business planning decisions on their businesses through our Discovery Days. We created an interactive Google Map with every shopping centre in Australia. All centres are categorised by size and location, and we can directly compare foot traffic estimates, floor plans and major anchor tenants. This bird’s eye view guarantees informed choices on new salon sites and the future direction of the business
IFB: LOOKING AHEAD, WHAT GROWTH DO YOU PREDICT AND WHAT WILL IT LOOK LIKE? AM: In 2021 Australia will have 10 new salons, New Zealand another five, and a further 20 in our fast-growing UK market. We are adapting to where people are spending their time, and that means CBD metro will not be as much of a focus now that people and workers are back in their local community. In saying that if social distancing remains we may need to look at larger salons so we can have more clients in a day.
We base new salon location feasibility around equations that consider salon square meterage, centre foot traffic and centre type. Franchisees will continue to be Mum and Dad investors and existing hairdressers turned salon owners. Given over half of our franchisees are multi-salon owners, we also let them know about new opportunities in case they may be interested in expanding their franchise portfolio. We also offer first right of refusal to salon owners closest to the new site based on set criteria.