Joseph Lattouf traded his school books for scissors at the age of 15 and became a hairdresser. At 38, he is looking towards listing on the Australian Stock Exchange his rapidly expanding Melbourne hairdressing and retail, franchise. Hairhouse Warehouse , which has increased revenue from $15 million to almost $40 million in three years. Lattouf owns two stores and there are 50 franchises. He and his brother Anthony, 45, plan to open another 35 outlets around Australia in 2006.
A lack of business knowledge and experience almost brought the business to the brink of collapse in the early days. Joseph opened his first hairdressing salon in 1987 after finishing his apprenticeship. He soon opened two more, using his two brothers as managers. They noticed women who, after leaving a salon, walked over to a Priceline to buy hair-care products. Joseph says: “I thought retail was the missing link and decided to open a large store. I wanted a destination where customers could have their hair cut, body tanning, waxing, a nail bar and buy hair products, from $2 to $300.”
In 1992, he spent $11,000 on a fitout and opened the first Hairhouse Warehouse in Knox, in Melbourne’s south-east, with a partner. “It was not working. In the end, I said [to the partner], ‘You take it or we’ll take it’. The partner walked away and Anthony went in and turned it from owing $80,000 debt into a profit centre by aggressive marketing, getting the biggest range of products, providing outstanding service and best prices.”
In 1993, Joseph put up a sign in the store welcoming franchise inquiries. He says: “We sold them to whoever wanted them —family and staff. We thought we could help anyone change into successful franchisees.” Some people faked interest and copied the concept.
The Lattouf’s struggled along until they met Rod Young, managing director of DC Strategy , a franchise consultant, in 2000. Joseph says: “We had 12 stores by then and we knew how to get people in the door but not how to protect our intellectual property. He pointed out that we could not undo what we had done but said he would provide us with a business plan, processes and infrastructure to go to 60 stores. The first move was to open a special company trademark everything and put it in the company.
Two groups have since copied the concept but the intellectual property protection held. “it [iP protection] cost us so much money — every bill was for $10,000, $6000 or $20,000 — but we wish we had done it earlier because we are protected.”
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