Start With A Win - CEO of Sport Clips Edward Logan shares business advice

Episode Date: July 19, 2023

What are the secrets to growing a business to over 1,000 locations and into an empire?  CEO of Sport Clips Haircuts Edward Logan shares his perspective and advice on this episode of Start With a Win podcast.  Edward Logan grew up in hair salons, so he knows a thing or two about the business. His mom is a licensed cosmetologist, and he now runs the business his dad founded in 1993 as CEO & President of Sport Clips Haircuts franchise. He grew up in Georgetown, Texas, where Sport Clips is headquartered, graduated from Southern Methodist University in Dallas and then spent time as a business consultant with Deloitte Consulting before officially joining the family business as a single-store operator. He worked his way through several segments of the business, beginning with company-owned store operations and then stepping into franchise operations, first as VP of Operations and then COO.  After leading day-to-day operations across the entire franchise system, he was named President and COO. In 2020, he was named CEO and President, and was instrumental in leading Sport Clips through the Covid-19 crisis. Edward is passionate about quantifiable results but is most proud of continuing Sport Clips’ legacy of being a culture-driven and values-oriented family business, helping franchisees build income and wealth for their families, while continuing the brand’s philanthropic focus on veterans and children. And speaking of children, he and his wife Christy, are the proud parents of daughters Mackenzie and Cayman, and are thrilled to have another little girl on the way. Please welcome CEO & President of Sport Clips Haircuts and proud girl dad, Edward Logan.Main Topics01:58 In my blood, seeing the magic of franchising. 03:51 How they separated their brand and made it unique!06:19 Core values as the foundation.07:42 What is your daily focus, biggest challenges?12:14 Does your company have a 5-point play?15:02 Subscribe to your Principles.18:57 Franchise wisdom!23:43 Find your lead domino.Connect with Adam:http://www.startwithawin.comhttps://www.facebook.com/AdamContosCEO https://www.linkedin.com/in/adamcontos/ https://www.instagram.com/adamcontosceo/ https://www.youtube.com/@LeadershipFactoryhttp://twitter.com/AdamContosCEO Listen, rate, and subscribe!Apple PodcastsSpotifyGoogle Podcasts

What are the secrets to building a great franchise company? Today, we talk to the CEO and president of Sport Clips. Welcome to Start With A Win, where we talk franchising, leadership, and business growth. Let's go. And coming to you from Start With A Win headquarters and Area 15 Ventures, where we go grow franchise brands. It's Adam Kantos here with Start With A Win. Today we have Edward Logan, a seasoned businessman and passionate family man. He's the current CEO and president of Sport Clips

Haircuts Franchise, a great company. He was raised in Georgetown, Texas, where Sport Clips is headquartered, and he hails from a lineage of hair salon professionals and eventually took the reins of his father's business. With his experience as a business consultant at Deloitte and a progression through various operational roles within the franchise, he's guided Sport Clips with strong values-oriented approaches, leading the brand successfully through the COVID-19 crisis, which I can tell you was not easy. Edward balances his professional commitments as a doting father. He's got young girls. He's got another one on the way. Congratulations,

Edward. And he eagerly anticipates the arrival of the baby. Edward, welcome to Start With a Win. Adam, glad to be here. Thanks for having me. Looking forward to it. Awesome. So let's get right into your history in business. So, you know, how did you, you know, obviously your dad started Sport Clips, but not everybody follows in their parents' footsteps. What made you want to get into the business and why did you pick franchising as your career after going to Deloitte? I grew up in hair and franchising as a young kid, even before Sport Clips existed. Another brand called Command Performance at the time was the primary brand. My mom's a hairstylist. We weren't overly well off at the time, so I didn't really have a nanny or anything. I grew up literally in

hair salons, going on store visits with Betty and Gordon, my parents. And so something about the hair business was in my blood early and just always really loved it. I feel at home in a salon or a barbershop. And then same with franchising. That was a franchise business. There were some businesses in between that weren't. And then, of course, Sport Clips started. And so I grew up at a later age in high school and even college,

a little work in summers, things like that, inising and just see the magic of that concept, right? Where it's really especially done right. You know, there are some exceptions, but especially done right. It's such a win-win scenario where people can chase the American dream and build something for themselves and their family. And I just see this huge chain of win-win scenarios. And it's just really fun to be aligned and to be able to build something big, but it's based on small business where people fulfill their dreams. So always loved hair, always loved franchising, grew up in it, was always passionate about sport clips. I wasn't the perfect angel in high school. I skipped class like everybody else, but I skipped class to go to the office and make

some money and work for sport clips. So there you go. Something about it. And then I did, uh, uh, go with the white consulting right out of school, really good foundation to a career, worked with some great people, did some really interesting projects, um, and learned a lot, learned a ton. Um, but hair and franchising was still in my blood, and Gordon invited me back about 13 years ago, where I basically started at the bottom and

worked my way up one little bit at a time over the years. I love it. I love it. So how long has Sport Clips been around? The first Sport Clips store opened in June of 1993. So we actually just hit our 30th anniversary 16 days ago. Congratulations on that. That's a huge milestone in franchising. And how many units does SportClips have? Almost 1,900 right now. That's great. And it's interesting because when you break down the business model and the franchising space, and we talk a lot about franchising on start with a win uh ultimately you know the majority of franchise companies don't make it above 100 units so getting to 1900 units in 30 years is a huge accomplishment for anybody especially in a space you know predominantly men's haircuts which is a commoditized space in a lot of instances so how did you separate and how did

your father separate the brand from everybody else doing this and make it unique and fun? Well, 100 is kind of a magic number. The first 100 were a grind, and that's probably putting it mildly. Sold one franchisee with your multi-unit model, but one franchisee pretty early and then none for a while took a little over 10 years to get to that first hundred. And it was pretty lean in those days. And only then did it really start to get momentum. So you're right about that hundred mark. Some of the things that played to our favor and that we played on in order to build the brand, nobody else was focusing on men at the time. Even before I was more directly involved with the business and just kind of growing up around it, people thought we were crazy for leaving out half the market and the half of the market

that spends more in this space. So it was pretty open. Sports was a great fit to attract that male market and just be a comfortable space for guys. But really, I think the essence that we can talk, you know, the more specific parts of strategy and all the business plan side of it. But I think really what it amounts to in franchising is trust and relationships. Those first hundred stores, as an example, for the foundation, Gordon was at every single one. Right. And made sure we were picking locations and franchisees. first hundred stores as an example for the foundation, Gordon was at every single one, right? And made sure we were picking locations and franchisees,

we call them team leaders, who are going to be successful and always focused on the success of that individual or that store and kind of operated under the assumption that if we focus on stores being successful, everything else will work out and don't try to take shortcuts, right? Everybody wants to do it so fast, right? We sold, you know, whatever, a thousand units this year. And then they start opening and it doesn't go so well. We opened a few before we got traction and accelerated, made sure the model was good. And the other thing I would say is key is the real foundation of the business is the heart of a champion core values.

You called out the play like champion today sign, which I love too. The little scribbles on there are Coach Lou Holtz. The heart of a champion core values are based off Coach Holtz. Gordon wrote him in 94 before we started franchising and asked his permission to use his core values that he had been writing about as the foundation for this little business he was starting. And we still have that letter. Coach Fultz gave us the perpetual permission to use those core values to improve people's lives. And if it happens to be a business, then great. And so I think those values have always really been the foundation of relationships and relationships

and trust is the key to franchising. Awesome. Well, I guess one of the most difficult parts of building a network with consistency is what you're talking about. And that is being able to deliver that culture consistently across the brand, because that's what people know the brand as, is the culture that comes from it. So when we look at that and the people involved, you know, 1,900 different franchises, granted some are multi-unit franchises owned by the same person, you know, 1900 different franchises, granted, some are multi-unit franchises owned by the same person, you know, where for the listeners, a multi-unit owner owns, you know, multiple franchise locations. And sometimes they also own multiple brands,

typically not in a competing space. But, you know, it's hard to keep your culture consistent. Has that been one of your biggest challenges? Or, I mean, what would you say is your focus on a daily basis that you look at and, you know, you worry about regularly? Is it culture or is it something else? Absolutely. I think one of the things, I wouldn't say it's always been a challenge. I think it is a challenge. I would say it's always been one of our focuses, right?

It takes energy and intention and it's hard to measure. So, you know, your average PE group might not see the day-to-day value in it, right? And if you're managing from a spreadsheet, you would probably argue that there's not an ROI on it. And we're big on numbers. We're big on metrics. You know, we like success too. But, you know, we really do see the ROI in it. And we really truly believe that there is

an ROI to doing business the right way and treating people right. And, you know, I can't tell you the number on that. I can't tell you the return on cash in three years, but it's what we believe in. And so we've always just invested in it and we'll continue to. The bigger you get, the harder it is. But I think we have always been more successful than average on scaling culture down to the four walls, which is where your clients and your stylists, your most important people actually either do or don't experience it when they walk through the door. Totally. And with respect to that, how does that play into your other business challenges? Is it helped or hindered with those challenges? And what other challenges are you seeing in running a business of this magnitude? And it's interesting because when you run a business of this magnitude, you're also running

the local store essentially because you're running the headquarters company, but we don't have control over the local store because it's a franchise. They control this, but it's in your heart. I know there's a sport clips not far from from me, I've been there many times and you look at it and you go, okay, Edward has an impact on this store, but Edward's not in this store. You know, what, what are your challenges in franchising and your network wide and how do you overcome those? Is it your people? Is it your processes systems? What? Everything's people. I mean, our business is people squared, right? And so, you know, there's an aspect to it where we're not really going to train culture to an extent. There's a lot of selection to it. So when you're bringing on

franchisees, making sure that there's alignment, cultural alignment, values alignment up front, and that's going to scale for their entire time with the organization. I don't have to train them if that's even possible on believing in the same set of core values or way of doing business as us. We tend to attract people and bring on people who believe the same things we do. And so a lot of that is that alignment upfront. I don't know if you're misaligned from the beginning, pretty hard to, I think, change that. And so we're very fortunate to have been blessed with a lot of franchisees who believe the same things we do. And our environment down to the store level is, like I said, people square, right? Our inventory is people, our lifeblood is people, the experience, you know, the client experiences when they walk through that door is the stylist behind that chair that day.

No matter what, you know, logo is over the door, that stylist makes their day or doesn't make their day. So it's people squared. And so in our model in particular, even more than your average franchise, true in every franchise. But for us, that local franchisee that has the same core values we do and is there interacting with those managers and stylists every day, that's where the culture scales. It's really not through us. We were on a national webinar I was presenting earlier today. And of course, we talk about it every single presentation. Every chance we get, we're having that conversation. We're making sure we bring the business point back to the values and the experience,

both for stylists and clients. But if that franchisee didn't believe it in the first place, I'm just talking on a, on a webinar, right? So being aligned up front and that franchisee being local and being able to really invest in that team and be the owner who's right there versus, hey, corporate, you know, five states away, said X, Y, and Z makes all the difference. So it really shows off the beauty of the franchise model. So are your stylists, are they independent contractors or are they employees?

They are employees of that franchisee. Okay, cool. So it's interesting when you look at the different layers of franchising, you've got B to B to C and it's kind of, you know, it's B to B to E to C because you've got that employee developing and delivering that relationship with the customer. How do you ensure that that customer is walking out of there happy and any remediation or reward that goes into that process is followed through with to either encourage or, you know, I guess, rehabilitate the customer experience if it was difficult. How do you keep track of that customer experience on such a magnitude? It absolutely still goes back to people. If your stylists believe in that, if they're bought into culture and the values and great client experience, most of the time they'll figure out how to do that right, even if they didn't have guidance, right? People are smart and people who believe in that are going to figure it out. So it

definitely goes back to culture. But we also have really clear and simple processes. So we're good at scaling culture, but we're also good at scaling processes operationally. We have something in the stores called the five-point play. It's literally five steps to every single client when you walk through the door. And if you see it behind the scenes, you can actually see the process to it. But if you're a client walking through the door, you just feel like you're getting a great consistent experience and something more than just a haircut. All that's planned. It's all part of our five-point play. And that gives enough differentiation. It makes walking through our front door experiential and much more enjoyable and much more experiential than just getting a haircut somewhere else where these things don't exist or aren't part of their processes. But it's

also simple enough where we can train thousands of stylists around the country to do these things pretty easily without taking them out of the store too much. It's simple enough to scale, but it's thorough enough to really up the experience. Everybody's listening. This is gold. Does your business have a five-point play? And this is fascinating. And I'll take this over to one of our other brands that we own, PortaSubs. There's six steps to positively outrageous service. In the PortaSubs, you have your five-point play. I mean, it is literally people from the moment you touch that front door to the moment you get back in your car after leaving the store. it's very calculated how these businesses operate. And I didn't know about Edwards' five-point play until he just talked about it, but it

totally makes sense because that's what a franchise system is. It's a set of plays that are run regularly. The difference is the store owner, the franchisee, really is the tip of the spear when it comes to that culture that Edward's talking about there. And, you know, if they walk in with a smile on their face, their employees are going to have a smile on their face. If they walk in and they're kicking rocks and they're upset, guess what the employees are going to do with the customers? It translates. And therefore we build a framework around it with that five-point play. Leadership principles. Edward, share with us some of the principles that you live by on a regular basis when you're

leading yourself personally as well as your business. Because business is just part of our life and it's a translation of our personal life into our professional life. So what principles do you subscribe to that keep you happy, healthy, productive, and great with, you know, interpersonal communication, things like that. I'm a big believer and lots of principles feed into this. I love to read, I love to listen to podcasts. I think there are very few business concepts that are truly completely new. We can learn a lot from others and a lot of it's very fundamental, a lot of it's execution.

So I don't know that I believe in anything particularly novel, to be completely honest with you. Sometimes I feel like I learned the most reading something that was written in the 50s or 60s or 70s, old management by objective stuff or something. It's the same stuff with different cover a lot of times. And a lot of it's about how you interpret, how you absorb, how you execute. But I would say fundamentally, I believe in organizations that are run high culture or high values and high performance. I think there are a lot of organizations out there that are high performance and maybe 10 or 20% of organizations are truly high performance, right? But oftentimes they're choosing either or. And same thing with culture and values. There are

plenty of organizations out there that operate with a good set of values and are great people and treat people well, especially in small business and family business. It's highly common to hear people, whether it's franchisees or just any small business owner or family owned business, even large ones, talk about how they truly care about their people and the businesses, their family, right? So there are lots of high culture, high values organizations out there, I believe, maybe 10 or 20%, right? You would say are high culture, high values, but the intersection of those two things, I think is pretty rare, being both high performance and high values. And that's the way we try to operate. We push hard. We have aggressive goals. We want to really impact in industry and really impact lives, not just make a little bit of money and not really worry about excellence. We really love excellence. We also know that that whole foundation is people. And

so we actually care about people and feel like everybody within Sport Clips is kind of our family and the business itself, Sport Clips itself, the brand itself is more than just a spreadsheet's family. And so living by those core values, taking care of people while pushing really hard, which sometimes that's a delicate balance, right? It's a fine line. And sometimes maybe you go a little too far one way or the other, certainly not perfect, myself included, maybe myself especially. But that balance, that intersection of those two things, I think is pretty unique out there. And maybe only your top 1% of businesses can do both. And so that's really always what we strive for. That's awesome to hear. What I'm hearing from you is you talk about

those family values and that team accountability. A lot of times people try to pick one or the other and they pick family values, but there's no accountability or they pick nothing but accountability, but their values are really weak. So I like how you've balanced both of those things in order to get things done, but enjoy the heck out of doing them. So it's a good time. It's a fine line. It is a fine line. It is a fine line. One of our core values do your best and quite correlated question is, are you committed to excellence? So you've got to have to look at it as a whole and make sure you're not picking and choosing how you apply those. It can be challenging sometimes.

Totally. That's a great point. Franchising wisdom. So, Edward, you run an amazing franchise company. You know, you're in one of those top tier organizations, almost 2,000 units. And I'll tell you what, the air is pretty thin in that space. Let's say there's somebody who's either got a brand new franchise company or they want to get into franchising. Any bits of advice, a couple bits of advice you might share with them so that they don't

continue to stumble regularly? I mean, everybody's going to make mistakes. But the reality is, what does the guy who's done it have to say? Yeah, I think there, it's really, I think it really goes back to fundamental execution and good common sense decisions. And I think a lot of people get either get a lot of bad advice or try to take shortcuts. So franchising is really tough. The business model looks very attractive from the outside, which is why you have a lot of PE in it. You have a lot of competitors in it. And I think it's really tempting to sell a lot of franchises very early or sell them all over the country right

away. And certainly year one, you're going to have much better financials, but it's really hard to create a solid foundation and scale it that way. It's really hard to execute that way. It's really hard to support that many different things at the same time. So my advice is probably contrary to some, and this is based a lot on what I've seen with Sport Clips and successes and failures I've seen with others or challenges might be a better word. We made sure we moved kind of slow at the beginning. We had one location that we owned and operated that exclusively for two years before we felt like we had the model ironed out, one location, company owned, before we even offered a franchise. And those first 100 stores especially, and still today, we intentionally do not set unit count store opening goals past the current year's plan any further out than that,

because it creates so many unintended consequences, right? If you feel like you have to open X number of stores, you might be a little looser on accepting franchisees who may or may not be a fit or accepting real estate that might not suit your brand or lead to a successful store or opening more stores than you can operationally support and train for in a given year. fairly slow and made sure, and again, still today, that we only open as many units as we can open successfully, which has led over the years to one of the lowest closure rates in all of franchising, which we're particularly proud of that above a lot of other stats you can read off. The other thing is to think about it like a supply chain. We started in Texas, didn't leave Texas for eight years, right? And then it was Oklahoma, Arkansas. Right. And if you think about it like an actual physical supply line, I think that sets you set you up for success. But I think the foundation of all that is, you know, level economics. Right. If you have an outstanding concept that grew a little slower than a competitor, but the, you know, level economics are great. Your support, the foundation is good. There's trust in the relationships.

Then you can always sell more franchises and grow faster later. But the reverse is good, there's trust in the relationships, then you can always sell more franchises and grow faster later. But the reverse is not true. If you sell a lot of franchises, but get off to a shaky start and don't support, you know, you can't execute on the operations and the training. And you know, some of that trust starts to erode. And maybe you made some compromise on location and real estate selections to move faster. That's really takes a really long time to fix or get out of or never. Or maybe you felt like you needed that check and did not filter for core values or core beliefs

in franchisees that you brought on board. Those things take a long time to sort out. So if you make some of those compromises early, sometimes it can really inhibit you long-term. Whereas if you have a fundamentally sound operation and good unit level economics, you can get on the gas later. I love that. Some gold in there for anybody who's really building a business or trying to scale a business. You know, what Edward's talking about here is very not just experiential, but, you know, Edward is, you know, remember he was at Deloitte. He's

an analyst of kind of business across the board and the impacts that, you know, process flow has in business holistically and applies, which this is rare to see somebody who's been on the analyst side, as well as somebody who's been in the operational side, truly running a business this way. So some great advice there. Edward Logan, you've given us some incredible gold on franchising and business building here, but let's take this final question about you. And every great leader has systems and processes themselves that help set them up for success.

The question I ask all of our amazing guests on this show is, how do you start your day with a win? Absolutely. I wake up every single morning and do some sort of physical activity. Maybe it's just to walk around the neighborhood if I'm not up for something more intense or whatever. So it's not always a workout that I'm hyper proud about, but it's always something. And I'm a big believer in the one thing is a great example. It's one of the philosophies that I'm hyper proud about, but it's always something. And I'm a big believer in the one thing is a great example. It's one of the, one of the philosophies that, uh, that I like.

Um, and it's all about finding that lead domino, um, three for that term, uh, and doing the little things that, um, that can change habits or, or help you make big decisions. Habits are super powerful. And so literally the absolute first thing I do when I wake up in the morning is hop out of bed and put on athletic clothes. And that's just one, it gets my, it tells my brain, Hey, you're going to do something physical, right? Before you do anything else. Um, and it's one fewer things I have to talk myself into in the morning. I don't, you know, put on my jammies and go sit on the couch and then have to talk myself into it. I just put on workout clothes, go make a cup of coffee, drink a vitamin mix.

And, you know, it almost moves you towards it, right? So I do something physical and I do something mental at the same time, listening to a podcast almost every single morning. So six or seven out of seven mornings in a week, I'm doing something physical. I'm listening to a podcast. I'm getting that mental exercise. It's usually about something I'm really interested in. Sometimes it's practical.

Sometimes it's not. It's just fun or interesting. but then your body's awake, your mind's awake. And, and similarly, when I take that morning shower afterwards, end it with, you know, 30 seconds of freezing cold, which is not my favorite, but, you know, you're awake, you're awake, your body, your blood's pumping, your mind's awake, and you're definitely awake after the cold shower. But, uh, but for me also, as you mentioned at the beginning, I've got two young girls. So especially during school, that routine works out great where I can do all that. Then make sure I'm personally, you know, get them, get them put up in the car and sent off. Well, and then I can, you know, I've done all those things. Families, family's good, you know, body's good. Mine's good. Family's good. Um, and that really clears the runway, I think, pretty early in the morning to be able to focus, go execute, go conquer something, go win something. Awesome. You're winning a lot before you get to the office, it sounds like. So good for you, my friend.

Edward Logan, CEO and president of Sport Clips Haircuts, a great dad, a family man, somebody who wins every single day. I love this interview. Thank you for being on Start With A Win, and thanks for all that you do. Thank you, Adam. It's been a pleasure. Thanks for joining us on Start With A Win. Be sure to like and subscribe to this episode and share it with your friends. Also, be sure to check out Adam on YouTube at Adam Canto CEO, as well as on all the social

media platforms. And don't forget, start with a win.