Buying a franchise in the hair sector: what Hairhouse Warehouse is up to

Sarah Stowe

Hairhouse Warehouse has income streams from both services and productsHaircuts are considered an essential in our 21st century lives. And according to an IbisWorld report the franchised hair sector revenue for the current year is estimated at $343.2m. One of the main players in the marketplace is Hairhouse Warehouse.  

The brand’s franchise development manager, Peter Fiasco, explains how people are at the heart of this network.

“The most challenging part for a franchisee is finding and keeping the right people. Our business is primarily a people business. It’s all about the experience our customers have in our stores, and ensuring we keep finding those great people to serve our customer and create those experiences for them is the most challenging.

“We cannot say that we have a typical franchisee. Our franchisees come from various walks of life – people who have had no experience within the hair and beauty industry, to people who have grown up living and breathing Hairhouse Warehouse.

“We also have a lot of franchisees who are couples, and this can work somewhat well, where one person is the face of the store while the other focuses on back of house requirements. However, at Hairhouse Warehouse, we have developed a model over the years where it works just as well if they are a one person operator.”

The IbisWorld report highlights the need for franchised hairdressing chains to make their mark in a sector dominated by independents. There’s an imperative for brands to find their own niche and attract and retain customers.

Fiasco highlights what makes Hairhouse Warehouse different from competitors.

“Hairhouse is a true hybrid model. Our business has more than one income stream, both services and product. We aim to be the best we can be in both streams. We have the largest hair product range in the industry with the strongest margins, as well as exclusive ranges that customers cannot access anywhere else, including our competitors or online.”

Franchisees can add to the hair services and product line-up with beauty treatments, bringing in another opportunity for customer spend.

“The Hairhouse Warehouse relies on both our strong profile including our national and local marketing, but we just as importantly work hard to ensure we have the right locations that provide our franchisees with the maximum walk-by traffic to also convert to customers.”

For head office, the biggest challenge right now is finding franchisees in specific locations the business is targeting, particularly in regional areas.

“Interestingly enough, these regional areas also provide the best opportunities for prospective franchisees as they can own the hair and beauty market in that specific region,” Fiasco points out.

Expanding the network

Hairhouse Warehouse is going through its largest expansion ever, he says. It is already listed in the IbisWorld report as the second biggest franchised player in the Australian marketplace, just five percent less market share (22 percent) than fellow Aussie brand Just Cuts, which has 185 franchises across Australia and New Zealand. The Price Attack business has significantly lower market share at 14.4 percent; Toni & Guy, the business that started in London in the 1960s’ heyday of hairdressing and arrived in Australia in 1995, holds a six percent share.

The remaining 30 percent of the market is taken up by other brands.

So for Hairhouse Warehouse the goal for the next five years is to achieve 170 stores nationwide, and to have a footprint in at least two international markets.

At Hairhouse Warehouse it’s all in the name. It has been part of the Australian hair care scene since it was founded in 1992 by brothers Tony and Joseph Lattouf.

“Part of our strategy is to be a multi-brand business within the hair and beauty industry,” says Peter Fiasco. “We have further plans to expand this new brand, as well as acquiring further complementary businesses that fit into our portfolio.

“We are close to being able to announce the acquisition of another beauty brand,” he reveals.