Why is My Market Closed?

At times, there is no availability in the preferred market for some potential Sport Clips Haircuts franchise candidates. Careful thought and consideration go into determining when and where to grow the brand, along with a strategy focused on responsible and sustainable growth. Priority is given to existing team leader expansion to ensure the brand never out paces its support structure. Sport Clips’ high continuity rate and model scalability are hallmarks of a successful franchise system.

From the brand’s inception in 1993, growth has been slow and purposeful. At first expansion was confined to Houston, Dallas and Austin. The model was tested and finetuned, and then the brand expand to only a handful of markets. Those first markets were selected because they were in areas where Southwest Airlines flew, allowing the brand to keep travel expenses low and to focus resources on what mattered most: supporting team leaders. Today Sport Clips has a presence in all 50 states and in Canada, but with close to 1,800 stores they still approach growth in the same, responsible way.

So why does Sport Clips close a market? Careful market calculations go into this decision. First, a conservative estimate of how many licenses to award to a given market is determined based on an intensive market analysis. Once all those licenses are awarded, the market is then closed to new team leaders, allowing existing team leaders to fill in the gaps. Thus, a pulsing strategy is created: underselling a market, then closing it to let real estate catch up.

“Having a well-defined growth strategy allows Sport Clips to properly balance team leader demand and real estate opportunities,” explains Greg Smith, chief development officer for Sport Clips. “By leveraging communication between franchising, real estate and operations, we can quickly determine we if we have a comfortable equilibrium or if immediate action is required. Smart, strategic growth is our number one priority.”

Pulsing development gives priority to existing team leader expansion, without creating competition between team leaders. This scaling is why Sport Clips has such rigorous franchisee selection criteria. Team leader success is Sport Clips’ ultimate goal.

After a market has had time to fill in, Sport Clips will review market optimization criteria and determine whether the market should be reopened. Just because a market is closed today does not mean it won’t reopen in the future. Recently, the California, Colorado, Michigan, Minnesota, and Northeast markets have been reopened, presenting tremendous opportunities for expansion.

Sport Clips’ responsible approach to growth is the reason it has been able to create such solid systems and brand infrastructure. Sustainable growth is more important than rapid growth. Scalability and support for team leader success has been at the forefront of Sport Clips’ strategy from the beginning and will continue to be.

For more information on the Sport Clips offering, click here.

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