Just Cuts franchise adopts new marketing approach
Traditionally, Just Cuts has marketed a no-frills hair cut at a reasonable price –a platform which now results in 60,000 Australasians sitting down in front of a Just Cuts mirror every day. You do not get your hair washed and blow dried unless you want that and are prepared to pay more; you can't have a colour or a perm and there are no appointments. But what you do get is exceptionally well priced.
In short, the formula devised by founder Denis McFadden in the 1980s has worked. By 1990 his style cuts were $7.00 when the going rate was $15.00 and today he continues to operate a high volume low margin, unisex business turning over $68.6 million from more than 151 franchised outlets in Australia and New Zealand.
His formula is relatively simple. Franchisees pay $130,000 to $190,000 to get started (including franchise fee and set-up costs) and then a flat royalty equivalent to the price of 11 haircuts a week. They're not typically trained hairdressers themselves so the market for new franchisees is broad. They're actively encouraged to take on new territories and in 2005, 13 new salons were opened.
So what's wrong with all that?
The potential for copycats.
Most competitors are small independents. Some other, similar chains have started, which McFadden says have only moderate growth potential at best. But he also believes that at some point, a serious challenge will emerge. The result is that the model is moving away from competing solely on price.
Price is still a big part of the equation, but the marketing emphasis will be on quality and service. And in the hairdressing business, those things are every bit as tangible as price. Just Cuts claims a 2.5% share of the hairdressing market, and McFadden wants 5% with 200 salons. McFadden says 200 salons is feasible and that Just Cuts has identified 410 shopping centres with a Woolworths, Coles, Lenard's and Bakers Delight that would suit.
See the buying a franchise page for additional information. 23.07.2007
FCA Member
Contact Just Cuts Franchising
1st Flr
4-6 Kingsway
Cronulla
NSW 2230
Tel: 02 9527 5444
Fax: 02 9527 5144
