Salon Suite Highest Occupancy Rate: Luis Moreno & Jim Murphy
November 30, 2017
Salons by JC held their inaugural owners conference October 22nd thru October 24th in San Antonio, Texas. The conference was attended by over 75 of the Salons by JC salon suite franchise owners and preferred vendors. Attendees learned about brand strategy and marketing for the upcoming 2018 year. During the conference, honors were given out for Franchisee of the Year, Concierge of the Year, and Highest Occupancy Rate for 2017.
Salonsby JC has 86 locations in 25 states and Canada. Jack Griffey and Cecil Miller founded Salons by JC in 1998 in Dallas, Texas creating a salon suite concept specifically for hair and beauty professionals who were ready to move away from the traditional salon model. The company has since moved its headquarters to San Antonio, Texas, where it continues to grow through franchising.
Luis Moreno and Jim Murphy tied for 2017 franchisee with the highest occupancy rate (98.8%) by using similar tactics. It all starts with location, location, location.
If there’s one thing Luis Moreno and Jim Murphy agree on, it’s that filling suites and keeping them full starts with the best location possible.
“Everything depends on how well you do in real-estate selection, which means a beautiful building with many windows and a great neighborhood with a strong retail presence and lots of local salons,” says Luis. “Also you should be good at negotiating rent in the area, so you can pass savings on to the tenants.”
Photo of Luis Moreno & Cecil Miller at the SBJC Owners Conference
Jim agrees, adding, “I try to think like tenants do. They want a building that’s in tip-top shape with clean common areas and restrooms for their clients. Ample parking is key. If you have 50 tenants who are all in-house and each one has a client, you need 100 parking spots.”
Smart Recruiting Tactics
Tenant recruitment should start four to six months before you open. For both his locations, (Carmel Park and South Park in Charlotte, NC) Luis used postcards and mailers (the State Cosmetology Board is a good place to get addresses, he says), Craigslist and Facebook postings and ads. “There is no one tactic that matters most; it’s doing them all consistently,” says Luis. “Also, I hired a concierge who was an industry veteran. She had been the general manager of the largest salon in Charlotte, which closed.”
Photo of Salons by JC Carmel Park location
Jim, who owns the Midtown Atlanta, GA, location, was once an IT recruiter. He says the processes are similar: Recruit to fit a certain criteria, pitch the applicant on what you offer, sign him or her up and manage the relationship. As for tactics, he says, the ones that yielded his best prospects included running a Google pay-per-click ad, which comes up in a search, and getting referrals from tenants.
Photo of Salons by JC Midtown Atlanta location
Adds Luis, “In my second location, I offered two weeks of free rent for every referral who signed a one-year lease. The tenants were happy to tell their friends.”
The Right Fit
Finding a great tenant pays off in several ways. If they are a good fit for your operation, they’ll stick around and you won’t have to continually recruit. (Jim hasn’t had an open suite since March, 2017.) They’ll know tons of other fantastic professionals, who they’ll refer. And of course, when they succeed, you succeed.
As for ferreting out the best prospects, depend on experience and gut instinct, and subtly use tours to gather competitive intel, so you can stress how your operation excels, advise the two. Questions to ask involve longevity in the business, the proximity of the prospect’s current salon to your suites, and why the person is looking for a change. That last question will tell you a lot about both the person and your competitors.
“Starting out, you might tend to lease quickly and have some misfires, but you’ll learn how to get a sense of a person’s professionalism and attitude,” says Jim. Luis, who recommends leasing just two or three suites to the “slightly risky” advises that if things don’t work out, give the person an exit plan and move on.
Upping Retention Rates
Getting tenants is one thing; keeping them is another. If you got the right tenants in the first place, retention is easier. Now, you just have to keep them happy. Luckily, say our winners, it isn’t rocket science.
“It was a real lesson to me that when prospects said they wanted to leave another situation, it was because small things always become big things,” says Luis. “Be present, know what is happening in your business, and acknowledge and address anything that needs fixing as soon as possible. Show you are responsive. Keep everything clean for your tenants and their clients, make it easy for them, recognize them in small ways and have fun.”
To make tenants feel part of a community, both of our winning franchisees hold fun events with food and beverages. Acknowledging birthdays with a gift card is also appreciated.
“When I have a good tenant, I offer him or her an incentive to re-sign the lease,” says Jim. “I may offer two or three weeks free rent for a one-year renewal, so the tenant can take a vacation.”
When you do have openings, using current tenants as recruiters and rewarding them is the simplest and most cost-effective way to keep suites full.
In photo: Luis Moreno and several of his Salon Suite Owners
Musts to Avoid
No discussion about suite occupancy would be complete without a look at what doesn’t work. Here’s where competitive intel comes into play.
“Lowering rent prices does not work,” notes Luis. “Tenants are looking for quality, and charging appropriate rents for your area underscores it.” (Too-low rents often signal desperation.)
Additionally, costly events and big parties with DJs are not a lure when recruiting, unless you want a bunch of party-crashers. Salon pros want a clean, orderly, attractive work environment above else.
Comments Jim, “Don’t be aggressive or pushy. Determine what a person is looking for and promote the advantages of Salons by JC in a subtle way. I don’t ‘sell’—I focus on being consultative to find a good match.”
With the right tenants and a great facility, you’re well on your way to achieving continually high occupancy rates—and your potential next step. Jim says he is now looking for a second location: He’s been searching for his ideal for over year now, which shows just how much location contributes to success.