How Much Money Can A Graet Clips Generate

Franchisees are increasingly hanging onto their solar day jobs even later they open up their businesses. (SHANNON STAPLETON/REUTERS)

Prasad Raju has a good task equally an IT architect, but he's lately been feeling like he could use a larger financial absorber. So he's opening a Great Clips for Hair salon within the adjacent few months.

But Raju doesn't plan to ditch his 9-to-v, nor does he plan to master the art of Zooey Deschanel bangs. Instead, he's going to hire a managing director to run the operation while he continues working.

In fact, he said he chose Great Clips in function considering "I was seeing other franchises that would make me quit my job, and that was a bit of a drawback."

Raju is ane of a relatively small per centum of franchise owners who manage their franchises remotely and keep unrelated, total-time jobs on the side. Franchise experts say in that location's been a recent uptick in interest in this type of organization among owners who promise to both generate a second income stream and to hedge their bets in instance of layoffs in their industry.

Heather Rosen, president of FranNet of Virginia, a franchise advisory firm, said about half the people she meets with want a franchise that can be run remotely. She said these individuals by and large autumn into i of three categories: Some are unable to discover jobs but want to go on their options open up in instance they do get an offer. Some are consulting, and want to supplement work that tin be less than steady. And others, similar Raju, are employed and want to make coin on the side.

Raju plans to open up his Great Clips in August and is still scouting for a location. He said the salon should generate an average of $40,000 to $50,000 net income later on it gets upwards and running, co-ordinate to the franchise disclosure documents.

"Franchising appealed to me because they have a proven model," he said. "If y'all can execute your model, you'll exist successful."

2 full-time jobs

Non all franchisors are willing to accommodate the set-it-and-forget-it approach. In its "Is Franchising for You?" online FAQ, the International Franchise Clan warns prospective franchisees that owning a franchise business is a "lx-70 60 minutes a calendar week chore" and that, "managing a franchise is a full time job. It requires great sacrifices of personal and family time."

Semi-absentee business models are too expensive, Rosen said, because the owner must not only rent the space but hire a competent managing director.

"When the credit markets tightened and the recession began, nigh people couldn't get the uppercase they needed to open up those types of businesses, and those who had the capital were agape of putting that much of their own money on the line," she added.

Because of that, the past few years have seen growth in lower-investment franchises that tin can exist operated out of a home office or executive suite.

But that may be irresolute now, as franchisers expect to abound but potential operators yet struggle to secure the necessary financing.

"While franchisors generally prefer to accept active concern owners, given the current credit environment, prospective investors who are well-capitalized because of second income streams may be more highly-seasoned candidates," said International Franchise Association CEO Steve Caldeira.

Slap-up Clips not only allows their owners to continue a full-time task, in some cases the company encourages it. Unlike in sales or nutrient preparation, a hair salon has picayune twenty-four hours-to-day use for someone who isn't a trained pilus stylist.

"At Corking Clips, in that location'southward not a whole lot a franchisee tin do in the salon," said Rob Goggins, Smashing Clips' senior vice president of Real Estate & Development. "Virtually anybody is cut pilus, so we encourage the franchisee to focus on staying on top of key metrics and looking for ways to expand."

And it'southward non like shooting fish in a barrel to become a Keen Clips franchisee. Goggins said that while someone doesn't need experience running a salon, they usually do demand a net worth of at least $300,000, and owners must oft open up ii to iii franchises before they can afford to quit their day jobs.

Managing from afar

Although the do may boost income, attempting to run a business and work a full-time job simultaneously gives rise to obvious challenges.

"Any modest business organization is a full-time job," said Warren Lee Lewis, chair of the franchise and licensing practise at Akerman Senterfitt. "To put that on top of a regular job, information technology'southward going to exist hard."

Ken Piering is a chiropractor who has his own practice and also owns an Elements Therapeutic Massage in Owings Mill, Md., and he said he'southward "pretty pleased" with his setup, in which a manager runs the day-to-day of the massage studio while he checks in periodically through an Internet-based system.

But the procedure hasn't been without its hiccups: The original director was not always able to exist in the shop and had to exist replaced, and Piering's married woman has had to come in occasionally when a front end-desk employee chosen in sick.

Lewis said remote, Cyberspace-based monitoring systems like the one Piering uses can help offsite owners watch sales throughout the day or fifty-fifty monitor the activity in the store through a video camera. Slap-up Clips, for instance, uses a proprietary software called Styleware that tin pull 140 different reports on business organisation metrics throughout the solar day.

"We also encourage our people to carefully screen employees before they rent them," Goggins said. "If in that location are issues, quickly move on to someone else."

Raju declined to proper name his employer just says his visitor knows he's planning to open a franchise. He thinks he'll exist able to handle the homo-resource aspect of his new venture by meeting with the staff regularly on evenings and weekends.

"It all starts with me—how I set my expectations and how I treat the manager," he said. "If y'all hold people answerable, set their expectations and accept care of their needs, I think it should work."

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Source: https://www.washingtonpost.com/business/on-small-business/business-ownership-on-the-side-franchisees-keeping-their-day-jobs/2012/06/27/gJQAiHuS7V_story.html#:~:text=And%20others%2C%20like%20Raju%2C%20are,to%20the%20franchise%20disclosure%20documents.

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