asked me to speak he asked that i share some information about business strategy can you hear me i can talk louder i have three chon i can try and match it up a little bit can you hear me in the back ok ok i'm just act like one of my kids and i'll yell even louder if i if i have to if you misbehave i can not get up a little bit more about time mass that i share a little bit about the business a little bit about the business strateg that made us the most successful he also asked that i talk a little bit about how we manage franchisee relationships because the most business is you have pretty dynamic challenging relationships and he asked that i address that and also any marketing ideas or things that i believe contribute to our success that might be helpful to you so i am going to stick to those four broad areas and i have to carry my yellow pieces of paper with me although i might not hardly look at them it's like my security blanket so the first thing i'll share with you is just some broad information about great clips and you've already heard some things about great clips this is our thirtieth birthday i thirtieth anniversary is july twenty second this year we have over thirty one hundred salons we do almost nine hundred million in systemwide revenue so we will be the first billion dollar hair care brand we are the largest single hair care brand so there are other like regis has about twelve thousand salons but there are fifty five different brands so we're the single largest hair care brand we've had twenty eight quarters of same salon sales growth so we've done very nicely during the last several years but many businesses have struggled we feel blast and a lucky along with believe that some of our hard work and strategies have paid off as well and we have a thousand franchisees so when you think about managing people think about managing a thousand people much like you are franchisees are fairly experienced usually executive management level folks who decide that they want to have more control and responsibility over their lives so they want their own business most of our franchisees plan on having about three to ten salons the average right now is just over it we have a thousand franchisees those are all partnerships and those kinds of things our average franchisee probably has about three point eight salons and we have a very large stylist in this system and we're in the united states and canada so that's a little bit about great clips one of the things that i think about with business strategy that one of the key things i've learned is as we've gone on this growth is you know when when you first start and i was that great clips very early on before i started in eighty seven full time i worked as a consultant from eighty four to eighty seven you know when you first start you don't have enough resources to make anything complicated but the bigger you get the more resources you have in the more complicated you can make things and then you get bigger and you go ok wait a minute if we want to replicate this we have to keep it simple i mean one of the biggest things that we learned over the years is i can complicate things incredibly well i love data i'm more numbers oriented i have a human resources and training background  but i think that i was kind of forced into human resources and training because of the era that i was developing my career and direction i was a female at a time when women really went into teaching nurse seeing social work psychology so although my math aptitude was always incredibly high i always got shifted that direction so actually my bachelor's degree is in sociology and psychology and my master's degree is in training and education so that's where i came from but i have a really really strong i would say not accounting aptitude my accountant there is going she doesn't have any financial said she couldn't do or taxes it for the last thing in the world complicated things and now we've gone back to a simple so great clips is really built on a couple of documents that are this size and i'd be glad to pass this around but if you think about running on most a billion dollar business on two pieces of paper this size it doesn't really work yes it does because everyone in the organization uses the same language they use the same ways to describe the brand remeasuring the things that are most important to the brand so i'll pass sat around so one of the first lessons we learned is that you have to have very simple messages if you want to replicate them so we have a very clear vision arbitron is working together to build the most profitable salon's by delivering the most powerful  enduring by and that's a little bit longer than it was for why oh a little bit shorter than it was many years ago my favorite was providing the very best value and service of the hair care industry by providing support leadership and direction to franchisees so they could build successful businesses with happy satisfied employees i thought well now why can't anybody else remember that you know but we couldn't if you think about what you ask people to remember in your business you know you really have to say now can they really remember that i love the speaker who asks all the catholics to write down the ten commandments you know they can commandments have been  anywhere from thirty forty fifty years and my guess is if any of you are catholic if you want to sit down my guess is you'll come up with at the most seven and they'll drive you nuts so when you think about trying to get people to remember all this information even if you can they can't and if you want to replicate a brand and share of clear of values and a clear direction you have to keep it simple so we use three key words on the franchise side of the business on our franchisee relationship side and we use three key words on the customer side on the franchisees side our relationship or all of our focus with franchisees are three simple things inspiration community and legacy so when we're working with our franchisees we try to make sure that every interaction that we have inspired them to do a better job with their staff and if the salons and with the customers and inspires them to build a very strong business we also believe that community is incredibly important  our franchise community supports one another we aren't it's not like us against them it's not corporate the franchise or it's all of us together in a broad community and we really promote that support and caring for one another we believe that w everyone does in that community f x someone out and we clearly communicate their expectation is to support that community and it starts right from the very beginning and any market where the franchisees start working together we ask them to really support one another and sometimes people think that may take a long time some of our strongest sense of community maybe in some our oldest markets but we just open the boston market a few years ago and we only had like seven franchisees and ten salons and one of the franchisees opened their second slot on a saturday and their son was killed and killed in afghanistan on monday so you wonder what does a new co op do exactly what you would expect clipped those other franchisees rallied around those franchisees they took over their salons our field person jumped in with that that's a lot every day they put together a way to support those salons why those franchisees had to deal with an incredible and terrible loss so we really promote that notion of community we also promote legacy we're not a get rich quick franchise franchising has a lot of different reputation you know different belief systems out there if you want to make a lot of money fast great clubs is not where you want to be if you want to build a long term successful business where you can grow the business every year the ballad the business goes up you can pass it on to your family and you want to contribute to the community or have a different kind of legacy great clubs could be a very good business decision for you so legacy is something that we think is different in the way people view the business that they build on the customer side the three key words that we use our comfort freedom and connection comforts about the way we treat people we want them to feel comfortable in our salons we are no fool for we have told us a lot you know we aren't in there you know trying to you know make work i mean c'mon how long does it take to cut his hair for god sakes i mean you know i mean you can't i mean you know you want to be you want people to feel comfortable you don't want to many of the guys would say that they've gone into salons where they don't feel very comfortable and our largest percentage of customers is men and we want every man and every woman to feel comfortable in our salons and feel like they can come  slots any time they want freedom is more about the convenience it's about having locations everywhere about having a wait times about having great hours so customers can come in when they want to come in by the way does anybody have a smartphone here anybody have a smartphone greg clips has a new app and every time someone downloads that app we're making a donation to children's hospital that app is a great app because what it does if someone wants to load it and pass it around that would be great it's very easy to download but it would actually geo sabse where you are it would identify all the locations in the area it would give you information on exactly what the now someone will say well what about the people in the lobby were trying to get wait screens and all the salon so people people are used to that you know they see that there are order so that does take that risk out but think about never having to wait in a salon again you can wait at home you can stop at the grocery store on your way and if you can twenty minute wait you can do something else before you go to great clips instead of having to go into great clips put your name in and then leave as many customers have done so that on line check the app is that correct kind of drive towards that freedom component so customers don't have to wait and the last part of our brand for customers is connection and that's really we know that you want to connect with your styl st you can certainly request a stylist and great clips a lot about about eighty percent of our customers are comfortable with more than one stylist they're comfortable with a brand in the quality of the staff that we have sometimes people think in a great club salon we don't have very experienced  i'll tell you that the experience in our salons with boggle your mind if you haven't been i want to be one of our salons because we very likely have more experience stylists in any of the full service high end salons that you may have gone to stylist learn that they can be very productive in club salon they like the flexibility and predictability they like the fact that our salons are always busy they like the fact that we market for them but we also know that customers want to feel connection to those folks in the salon they want to feel comfortable with and they want to feel like they know them we have another technology i use i gasp where we actually keep notes in the computer about your haircut and pretty soon that will be global so that will be accessible from any salon that you may go to a great clip see if you're out of town or on the road or somewhere out so so one of the first lessons that i think about from a business strategy standpoint is to keep it simple for franchisees our employees to know that every time they interact with them they are to be they ought to be inspiring that's a big challenge think about that it's not just nice we want people to feel inspired to do something we want them to feel like they're part of a community and we want them to understand that we want them to build something meaningful for them  community and the customer side it's comfort freedom connection customers to feel like they're gas that they're comfortable that's not pretentious that there's freedom that you can come when you want that you don't have to wait that you don't have to pay a ton of money and then that connection with the stylist in that's a lie and a belief that you'll get a good quality haircut so that's how we've really simplified the business and i think that really is a good lesson that we've learned is to not compromise or not complicate  this system because we really do want it to be executed in every slot and we want every stylist to understand that as well and they've got to after load it isn't a quote it's really cool so a couple other business strategy thought well worth almost thirty years old we thought we were a customer focused how many of you think your customer focused i really really thought we were customer focused i really encourage you to go back and keep a list of the things that you're doing and ask truly how many of them really affect the service that's going to the customer we have franchisees and stylist and employees and you know workers comp and h r issues and legal i mean you'd really be surprised sometimes how even if you really believe that your customer focused you on and you need to really check yourself all the time and say where am i spending my time i spend a lot of time in salons people go what i probably me an five hundred salons or more a year i'm in the salon i can check people in i can sit in the back room a stylist i can ask them why they came to work for us i can ask the customer why they're coming to great clubs and feel very comfortable you know when you get more data it's also pretty easy to get removed from the customer's i sit in every customer focus group research that we do i review every customer research it we have i review our on line reputation management quarterly report and i know exactly what customers are saying about us it really is a it's a good technique we have a focused clear vision and you know one of the things that what i talk about that focus clear vision and i shared our vision of all of our employees franchisees they may not say it word for word it is a little bit long but they know we want to build profitable profitable salons and they want to have an enduring and powerful brand that's longer term than a lot of visions might be but everyone is using the same language when i talk about th the simple repetitive messages like i said i used to go when i would go into markets i would have to have piles and piles of reports and all kinds of stuff now i take that piece of paper it's laminated of heavy i have several of them i take that and one report and i can go into any market in our system and send a message that's pretty clear and consistent and will drive business success in that market hard work you know sometimes it amazes me that people really think that somehow businesses get successful without incredible hard work but there are people who wonder how do you really have to i mean you're almost nine hundred million in sales you know i mean like are you taking it easy now you know i mean we're working as hard now as we ever have you can't ever let up we use mcdonald's as one of our examples that we often compare ourselves to and i remember early on brand now we clearly say you know we would love to be like mcdonald's they have incredible relationships with their franchisees they treat their employees very well they have strong leadership great market performance they grow consistently their stock prices consistently gone up they pay attention about the customers what they deliver over and over and over again they stay true to that customer focus the other thing interesting about mcdonald's that you might not know is they did thirty billion dollars in sales in two thousand and ten i don't want their two thousand eleven number is the next closest competitor is subway at ten point seven billion dollars now think about that don't you think someone at mcdonald's might say hey let's just rest and take it we have a ten billion dollar you know gap can't we take it easy act no way mcdonald's has truly been focused on growth consistently and one of the things that happens to organizations is once you grow and grow and grow and grow you start taking it for granted and you aren't quite as growth driven we had some lawless in new salon openings we had to look at ourselves and go with him in it we've got to grow both same salon sales and you know grow our same salon sales have been strong and now we base it now we have our you know growth back up we opened almost two hundred new salons last year will probably open just over two hundred this year so that growth in poker stop being focused on growth is also really important to other things that i think  been really important for us is execution as a habit now that sounds pretty simple but everything we do if we can't execute all the way the slime level it's off the table it's just off the table i mean a lot of organizations come up with a great ideas that honestly can't be executed in three to thirty one hundred lines with thirty thousand employees so it's not a good idea then if you can't execute it and if execution isn't your primary focus i'm not sure who said that it's a lot better to have a mediocre plan and great execution than a great plan poorly executed and we really believe that there's nothing like that act you know we really struggled with is that going to affect the salons and we figured that it was a very easy thing to execute because it took a lot of the pressure off the stylist so one of the things that we believe is you have to look at how you execute all the way to the customer level on any idea that you have the other thing that we really embraces a motion and there are a lot of businesses we're small the brand is the most all those words all those words that i shared about our relationship with franchisees and customers are emotional we get emotional we don't mind being emotional and we love it when people get emotional at meetings i love it when employees stylist managers come up to me and sad love my franchisees how many business meetings do people talk about loving one another  we have a motion and we embrace emotion because we think the strongest thing that we can have our relationships and those are emotional and so we don't you know sometimes people get a little bit like oh you can't be all that emotional  all the time we're emotional in meetings we have great relationships with our franchisees we're getting to a kind of that unfortunate era as we're old you know where we're losing franchisees in the emotion around that is very visible we don't try and hide it we're very visible about the deep caring that we have for the people who helped us build this brand and the emotion around that the other thing that tom asked me about is how do you keep everything together with the thousand franchisees how do you collaborate with them how do you work with people and how do you make that work well we have both very clear structure to make that work but we have also some very informal guidelines to make that work first of all like i said we have a thousand franchisees we do have an elected group of franchisees that meet with us quarterly that's about twenty franchisees that have been elected to represent their different areas but they really what we want is their thinking and we want them more engaged in the decisions that we have to make that will affect the salons we also operate about one hundred sixty different markets about one hundred of those markets have co ops where there's a co op president that's a local group of franchisees and we get those people together as well to provide us put and collaborate and share information and i'm so we're and we try to get out to those markets also have co op meetings probably at least on a quarterly basis we also actually as many companies over the last few years scaled back meetings in tough times we ramped hours up we believe they're getting face to face with franchisees and getting in those markets was more important to have one annual meeting we went throughout the country and did four or five or six  annual meetings to try to make sure that we could connect with as many people as we could because even if our business has been doing wow our franchisees have a lot of other investments or other businesses or their family members were clearly affected by some of the to economic things that occurred and so we believe that if we could provide more support in the markets that that would be better and that we would stay more connected to them so we really do try and stay connected to them in a very formal structured way but the other thing that we do is we know that we have to collaborate we're one hundred percent franchise franchise locations we don't have any corporate units so all of our tasking all of our marketing test all of our data test anything we do has to go through the franchisees so we need to have incredibly strong relationships with them to make sure that they give us good feedback and that they really help us tast different things that we want to execute in the system we also listen there's a great new book out there called the third alternative it's a stephen covey book third alternative it's his latest book and the third alternative is really clear it says that a lot of times my way or your way is not the right way there's a third way that's often better and i think we've embraced that with our franchisees we don't require we have a very strong franchise agreement legally we can force our franchisees to pretty much do anything we want we never ever require anything until we have about eighty to ninety percent compliance that we require for the last ten to twenty percent why because if we can convince franchisees to voluntarily do something make an investment then we probably haven't done the work that we need to do on it we are not offended when they say you know we've made mistakes we aren't offended when they challenge us we try and get as much information as we can from them we listen really really closely you know i think listing is probably the most underrated executive skill if you were to think about leadership and you look at all the skills that they put out there on leadership and there's always this broad communication thing and listening is buried in there somewhere listening probably is the most powerful tool that you have as a leader if you can truly listen you can often get through any any hurdles any obstacles any challenges and come up with ways around those and when we make a mistake we have made it we really made a mistake a few years ago on salon design and decor and it was funny because we sat in a room that's what we came up with our bass line that we use all the time now instead of getting into a defensive battle about well the franchisees were involved and you agreed to there we just said hey you know what we aren't where we want to be we just aren't where we want to be we don't have enough support for this we've missteps along the way and we're going to back up and start over and you'd be surprised how easy it is to say you know we are where we want to be instead of you screwed up by screwed up  didn't do what you were supposed to do i do what i was supposed to say we know where we want to be we just where we want to be and so we're going to back up and start over and go back at this so we have met mistakes and i can tell you that being a franchise or we were talking about it as being a little bit like a goalie i'm a goalie's mom you're a goalie's mom and i love this line about what happens if you're a goalie if you're a goalie when you make a mistake the red light flashes in seventeen thousand people  when you make a mistake as a franchisee and you have a thousand very strong capable franchisees you're going to hear about it and you have to be willing to back up and say ok let's back up we'll go back at this something along the way and we try and do it in a very non defensive way personally for me you know and i'm going to make a sexist comment i'm sorry but this is actually you know criticism of women so much i mean we get defensive we take things personally it gets in our way you know once we can get over that and clearly say you know not get into our defensive mode guys i worked with thirty years i'm not being defensive and it's hard we take things personally you know we go back and try and well i did this and i did that and i said this and i did say that they misinterpreted this and i should've just saying geez we aren't where we want to be let's back let me listen again to what your concerns are and see if we can't come back at it because from a leader standpoint listening and not being defensive and not being reactionary is one of the biggest strengths that you have the other thing that we do with franchisees and as far as a collaboration is when we know we're going to say no we just say no you know how frustrated people get when they think that you're just kind of paying lip service and you listen and ok that sounds like a good idea and you know you aren't going to do it just say no we aren't going to do that and this is why but if you're listening to a lot of other import that's not going to be a problem it's going to be a strength because you don't want to waste energy or let people believe that you're really listening when it clearly doesn't fit into their brand you know right now someone says and i think no we are going to do actually how can we serve the customers better how can we do slate times how can we get better data we'll focus on that but you know we aren't going to do that so the other thing that i think we do that helps franchisee relationships is we also are pretty clear when we are going to do something that they ask us to do we also make sure that we choose the right franchisees as a franchise or i have our obligation is to find the people who share our values who will fare well in our meetings who will you know share that sense of community will support one another and we say no to a lot a lot a lot of franchisees we say no all the time we say no because of the way they treat our receptionist when they call we say no because of the way they treat one our business services actual us in the field if someone treats our staff poorly we know they are not going to treat the staff in the salon the right way to get the results that we want behind our brand so we say no we say no if someone wants to go into a market where we can support them you know we say no if we have too many franchisees in that market we want to make sure those franchisees have the opportunity for growth the last thing that i think from a business and maybe it's not a business strategy i don't know that really understanding that trust is the best thing that you can build in any business and trust is built on transparency we're very transparent guys we're left franchisees if they ask a question we give them whatever they want you know we don't have any secret we don't have like this quirk bread you know separate i mean we're very very transparent we're very open and honest and give our franchisees any information they want about our performance in other markets we share market data with them every quarter they know exactly how every market's doing they don't know how to be strong but they know how every market's going they know how we're performing they know all the key brand measures and every one of those markets so we're very transparent and we have a culture that says we're going to share data throughout the system when times are a little tougher first of all really is getting good customer information making sure we know who our customer is we track their business we know if they come back if they don't come back we provide them some incentive to come back and i don't stop going just because you want that finance but we do have a lot more focused on that customer data we also are doing things that we would call more loyalty kinds of programs we did just a we've done several years in the twin cities but we just did a nationwide program  ninety nine haircuts where you can load a card with as many ninety nine haircuts as you want and use that all year so you can get better value then you already get in our salons and that's to increase frequency and to reduce time between haircuts  we shifted a lot of our marketing attention to the technology social media arena it is pretty complex and can be overwhelming but there is great benefit in connecting with smaller groups of people that were used to these big t v you know those kinds of things but we do have a very extensive kind of social media focus we monitor all of the great clips mentioned we were talking about someone said something about super and i said we don't say super ad  fantastic and great clips you know you can hardly even mention sports anymore because the sport clips so you know we don't we don't use those words but we actually the one thing that i think is that is a good tip that really has helped us and i'm not sure if it would work in your business but we monitor all the competitive competitive remarks as well so if you if you are doing things social media wise and you have a competitor if you monitor dissatisfaction from customers like if someone says they got a bad haircut at supercuts we just kindly and gay jim and say well i understand you got a bad haircut at supercuts you know we have a location really close to you would you like to try us but it is is first of all it's a very valid reputation management tool and resource that a lot of companies do monitor one other sites we know people are probably picking up are dissatisfied customers so we do that and we also try and do a lot more targeted marketing like i said with more of the more customer data that we have one of the best investments that you can make is really good customer data even in a small business to really make sure that you know how many visits you're getting from a customer what that customer value is how they came to you we know exactly when a new customer comes in if they came in with an offer if they didn't come in with an offer and when they come back how often they come back whether they use an offer so the value of customer data i think has become even more and more important so those are generally my thoughts about kind of the key things that i think it helped us be successful the key things that i think it helped us stay customer focused the other thing that i would say is  my brother and i are in the business together and over the last several years as we've gotten older and we hate to say that our other huge focus has been on succession and i don't know where you are in your businesses but sometimes that kind of you lose track of that i became i had a pretty tough cancer battle several years ago and it was pretty scary to think about the fact that we had not done what we needed to do from a succession standpoint so we're very focused on leadership development and succession but the my favorite comment about leadership is one that i often use in context of my boys you know if you're a parent and you get frustrated because you know the kids don't listen to you all the time you do the same thing over and over and over and over again and you wonder why they keep doing the same thing over and over again think about this quote i share one example with you but this quote is a role of a leader is not to manage and change others it's to manage and change yourself so often we believe that our challenges a leader is to make someone else change but if we change what we do they have to change so think about that if you have a certain pattern with customers or employees for your kids if you change that up you can probably get different results and my favorite story of trying to change things with the boys is i i realized that they were maybe sneaking out maybe maybe  and the reason i thought that was because andy was fully dressed in the kitchen at three in the morning and i thought well i don't maybe they are maybe they are due to the sneak out ok anyway so i decided i was going to could do my normal thing i could go upstairs i could cry i could be upset i could frakt i could not sleep or i could crawl in there bad and get some sleep because i would know that when they got back i would there so i crawled in their bag and i slept pretty soundly because i knew that when they got back i would be able to challenge them so when they crawled back in the window you know we had that kind of split level house it and they were in the closet you think about that frustration you had with why other people don't change think about what you can do differently how can you change the dynamic or the communication or the environment or how do you change what you do y how do you change versus always expecting someone else to change so with that i thank you very much for allowing me to share my thoughts with you i hope it was helpful and i'll hang around a little bit if you have any questions or anything else that you might wan early two thousand when the full service high and the betas of those salons were going gangbusters and we we really believe that our customer is an everyday customer and that our model would be stronger long term than some of those other models so we we always look and say should we go more upscale should what al should we do with the business model but we stayed pretty focused on every day people and that's sometimes hard to improve i mean the other thing people often want to change and improving is harder i think it was poorest actually you said to change is easy to continue to improve what you're doing is harder and so we do listen to our customer and as long as we believe that there's a core opportunity to serve our customers better and even when we look at market share even in the twin cities where we have one hundred fifty salons our market shares only about thirteen percent  haircuts so we still believe there is you know the other reason you would change our model would be to get more share and we really believe that the model that we have is delivering pretty wild right now but you know you do have to we we do look at all the time and we look more revenue but it is you have to keep challenging your business model but sometimes you also need to make sure you keep improving what you have with the core customer that you're serving and the question we are running a really hysterical ad the you know in fact i hate that ad anybody seen it it's an i and it's the on line application ad and it's a guy working out why he's waiting to get a haircut and it's kind of goofy but everybody tells me the guys love it and it gets people's attention it's a it's more of a product launch than an image ad and so i don't particularly like it but it seems to be getting really good results is it good good good good good i appreciate that i appreciate that ok other questions were good are you doing yes we are all though when we look at our core customer it's a twenty to forty year old man may all those men because we're thirty years old the grown up with us you know so they're older now and we actually  do a lot with bo senior day senior discount senior communities we have very successful salons in phoenix for instance we have salons and first of all have a lot of sixty year old style if that's not that old  but no we really believe we were recently looking at a partnership with a r p we believe that there seniors are pretty value conscious and are fairly basic catches so they fit they fit our model they have a good frequency pattern and they have a daytime pattern which is also good for our business so we do think the seniors are a great target for us and thank you very much