Building from the Bottom Up

Staffing accounts for well over 50 percent of a franchise company's expenses, says Charlie Simpson, executive vice president and chief operations officer at Great Clips. And at Great Clips, he says, that figure is probably over 60 percent. Lowering that number can help a company compete--on price, in the short term. But when hiring for success, there are more important considerations than money.

"You can't pay less and expect to win," says Simpson. "The franchisor can't just view it on the cost side. Long-term, down the road, the company with the best employees is going to win." And he's willing to spend what it takes to find and retain them.

Great Clips, which turns 25 in 2007, has 1,000 franchisees and 2,500 salons in the U.S. and Canada, and plans to open about 200 new salons every year. So what types of people is Simpson looking to hire? Primarily those at what he calls "the point of impact between franchisor and franchisee."

"If you have the philosophy of getting the best franchisees, the person who interfaces with them has to be of sufficient quality to do business with them," he says. "They are the company to the franchisee."

Generally known as field consultant or field support staff, people in these positions are "the tip of the sword in interactions with franchisees," he says. (At Great Clips, they're called business services specialists or managers.) "We're always looking for the entry-level interface with the franchisee. If you add 200 units, you need X number of additional support people," he says.

One key attribute he looks for is a person's ability to build relationships. "We don't look at their business skills first; we expect that," he says. "In addition to that, how are their relationship-building skills? Can they develop a relationship at a high level with a franchisee? Can they build trust? Communicate?"

This ability to build and maintain relationships is essential, says Simpson: "They must be able to influence franchisees, since franchisees don't work for us."

The second component of the ideal hire, more important today than five years ago, is the ability to strike "a subtle balance between creativity and the ability to work within a system," he says.

"The way you move forward in today's franchise environment is not the old shoot-from-the-hip approach we took many years ago. Most of the low-hanging fruit is gone in most industries. We need to have precise systems, and a precise approach," he says. "You need a well-defined process and system, and then hire people who are good fits for the system. If not, it's very disruptive to a franchise business."

Yet within that system, he says, there must be room for innovation and creativity. "I think franchise companies are understanding the need to be more systematic, as well as to think outside the box."

Hiring future leaders

Finding and retaining employees