Investor Styles Own Great Clips Biz

MINNEAPOLIS (Friday, September 01, 2000) - For Jim Hemak, buying his first Great Clips salon was an investment, not a career move. A dozen years and 37 salons later, his investment has paid off into a big business.

In 1984, Hemak was living in Denver, working as vice president with Junior Achievement, Inc. and looking for the right investment opportunity. He liked the idea of owning his own business, but knew startup businesses traditionally have an abysmal success rate -- four out of five fail within the first five years. But franchising, that was something else again. Hemak's research told him that 90 percent of new franchises make it. With numbers like that, he decided that's where he'd like to invest.

"I looked at a host of companies," Hemak said. "And then I came upon a little ad in a trade journal. It said: 'Everyone in America needs it. No technological changes on the horizon. Minimal inventory. Semi-absentee ownership.' It sounded good, but it didn't give the name of the business.

Hemak investigated, and found the ad was for a hair salon chain. Though he had never considered a hair salon business, the ad got him thinking.

"I thought people who get into that sort of business do so because they're creative types," he said. "I thought wrong." A bit of investigation into the Great Clips business told him otherwise.

Minnesota home grown

"They're a great franchisor," he said, noting that the chain is based in Minneapolis, his hometown. "We share the same Minnesota values, and I liked that there was a great deal of integrity and character within the company. They're focused on franchisee profitability, and that was another plus."

All of those things, in addition to the right numbers, led Hemak to buy that first franchise. One year later, he bought two more.

"I was getting excited about the business, and my brother and buddy wanted in," he said. "So we invested together in two franchises. Then two became four."

About that time, Hemak, who was still working full time for Junior Achievement, was offered a promotion within the company, but the new job would have required him to relocate. "I decided then to leave JA and get into Great Clips full time," he said.

He has never looked back. Soon, four salons became six, and all of a sudden, Hemak said, he found himself running a big business.

"Before the six-salon mark, I was managing things myself," he said. "But once I reached that number, I knew I couldn't run everything, all of the day-to-day stuff, by myself anymore. So I hired my first general manager."

The biggest challenge, said Hemak, was making the transition from hands-on to hands-off.

"I had to make that transition mentally," he said. "I needed to realize that my general manager might not do everything just the way I would do it. I had to learn to judge her on her performance, not on whether or not I would do things the same way."

Perfecting the people side

These days, Hemak says it's tricky for him to balance the numbers side of the business with the people side.

"We're a service business," he said. "We don't have a product. The service is all we have. We don't have French fries, we have people. The challenge now is balancing the needs of our employees -- our only asset -- with the numbers. The human needs are essential. But on the other hand, you need to manage the numbers in order to have a business."

Hemak does that balancing act by making sure his 325 stylists know they're valued through rewards, recognition, and genuine concern for the goings-on in the stores. Some of his employee recognition programs include a Presidential Awards Dinner to honor the top 25 percent of his stylists, giving salons free lunches if they're up 10 percent for a week, and free dinners if they're up 10 percent for five weeks. He also instituted manager recognition programs.

"If I just came into those salons with a sharp pencil and started working the numbers, people wouldn't stay with me, particularly in this labor market," he said. "They can and do go elsewhere. Giving people a pat on the back when they've done a great job is vital."

Hemak's team of general managers also receive a big perk -- everyone, including Hemak, works at home. "They love it because they have children, and can have the flexibility to take care of them." he said. "And with traffic and commutes, you get hours of unproductive time in your day."

Henak said the key is focusing on results. "If the work gets done, that is the most important thing," he said. "And if life is pleasant and happier for my employees, they'll stay with me."

Great Clips CEO Ray Barton says he understands why Hemak has been so successful in the Great Clips system. "He's an excellent leader and a good team player," Barton said. "He's a disciplined operator who follows the system. Jim has been a great leader from the beginning."

Barton said common goals and a common vision contribute to the successful partnership between Hemak and Great Clips. "Way back when, we as a company had big dreams and strong goals," Barton explained. "Jim liked that about our company. We have common values and visions. We're lucky to have him with us."

What else about Hemak?

"The man has an ugly golf swing," Barton said with a laugh. "But he sinks those putts every time."

View all Great Clips Press Releases

This article has been read 713 times.

Printer Friendly