Scott Griffiths is out to sell you an experience.
Sure his 18ǀ8 Fine Men’s Salons have scissors and stylists, but the business concept is not just about the haircuts. He’s offering men a sanctuary, free from ladies in curlers, women’s magazines and judging looks.
“Men, if they’re going to have a manicure or a facial or a scalp treatment, the moment they close their eyes, they want to be in semiprivacy. They are vulnerable,” said Griffiths. “The design of the salon environment matters—the masculine touches, the use of the materials, slate, crown molding—our expertise, products. How many places can men go where they feel ‘this is for me?’ ”
It appears he’s on the right track.
The chain grew from six salons in July 2013 to about 370 operating or under development.
“Our pace is about six new stores per month,” Griffiths said. “By the end of this year, we’ll be close to 400 and next year at 500.”
He said the company “invented the category, and we have no direct competition.
“With business opportunities, you really have to look at where the void is.”
The chain charges a $120,000 territory development fee that enables new a franchisee to open three locations. The size of the territory depends on demographics.
The new operator also pays about $100,000 to $200,000 per location for construction-related costs. The franchise royalty fee is about 7% and marketing expenses can be up to 2%.
Systemwide revenue is about $25 million this year, Griffiths said, adding that the company is “still investing heavily in growth.”
“We are cash-flow positive and profitable,” he said. “Once built out at 1,600 locations, the systemwide revenue should be in the $2 billion range. That’s the size of the prize.”
Start
Griffiths started the venture in 2002 with business partner Ron Love, a hairstylist by trade who “built Carlton Hair International.” They opened their first salon in Pasadena with $200,000 of their own money.
Griffiths wasn’t running 18ǀ8 at the time—he was chief executive of design firm Go Brand Engineering and product design firm Boombang Ventures, the latter of which had Disney and hair care products line Paul Mitchell as clients.
“I created the ‘Mitch for Men’ men’s line for Paul Mitchell,” Griffiths said.
The partners anticipated 18ǀ8 would grow organically, but after the recession, Griffiths stepped in as chief executive and raised $1 million from friends, family and an outside investor.
They had always discussed franchising and went ahead with the strategy in 2012. The company ended the year with $2.2 million in sales.
It now has three corporate locations, all in Orange County.
The chain targets “the affluent male, somebody who does not want to go to Supercuts, but he does not want to go to a woman’s salon, either.”
They named the chain after the formula for stainless steel, which contains 18% chromium and 8% nickel.
“Our cutting tools are stainless steel, but it’s also a metaphor—men get rusty, and we get the rust out,” Griffiths said. “It’s all about improvement, looking better, feeling better and performing better.”
Some of the chain’s customers are trying to look as young as they can in a competitive job market. Others, who find themselves back on the dating scene in their middle age, try to look their best for another chance at love.
The chain, aside from adding locations, is looking for financing and is diversifying its services in order to increase revenue streams. It plans to kick off a partnership with hair restoration medical center Bosley in Beverly Hills in the next three months.
Men are sensitive about thinning hair, Griffiths said.
“We will be the first to offer a spectrum of true solutions. We’ll guarantee that you will keep your hair longer, and you can get it back. And it’s going to be a game changer.”
The chain also offers an array of other hair products, including its own premium line, “Ron Scott.”
Griffiths said the “ideal” revenue breakdown for each salon should be products at 15% to 20%, grooming at 15% to 20%, and haircuts at 60%.
“If it’s not, then the staff isn’t doing their job.”
