The US hair salon market is estimated to

be around $50 billion a year. Meaning on

any given day, millions of people are

getting haircuts commonly at lowerpriced

franchise salons. You know these

nationwide chains where you can go and

get a basic haircut and if it isn't too

crowded that day, you can be in and out

of there within half an hour. It's

quick, convenient, inexpensive. Chances

are you are not going to get an

astonishing elaborate haircut. But as a

nearby everyday option for literally

millions of people across the country,

including myself, the concept has proven

to be amazingly effective. I realize

that on the surface, it all looks pretty

simple. But consider that this type of

salon did not even exist 50 years ago.

And over that time, there's been so much

happening, most of which tends to be

overlooked and hardly ever talked about,

which actually made it sort of difficult

to research this video. And look, I'll

admit I don't know much about fashion or

trends or hairstyles, but I think it is

so interesting looking at the unexpected

ways that this industry has formed and

evolved. And I think you are going to

agree with me. In my opinion, the two

chains that stand out as being most

significant here are Super Cuts, one

word, and Great Clips, two words. One of

them being the originator of the

concept, and the other has become the

biggest chain to utilize that concept.

See, before the 1970s, men and women

would almost always get their haircut at

different places. The men would go to

barber shops while the women would go to

beauty salons. On both ends, it would

typically be a very specialized,

time-consuming, and expensive process.

Well, Frank EMTT and Jeffrey Rapaort

were two hairdressers in the San

Francisco Bay area who felt that they

could standardize this process and by

doing so attract customers who simply

didn't want to invest that much time and

money into their hair. So in 1975, they

opened the first ever super cuts that in

many ways was challenging the standard

at the time. I would almost say it was

like a fast food version of a hair

salon, if that makes any sense. It was

low margin, high volume. They would

charge only $6 for a haircut, but they

had developed this technique that

allowed it to be done within 20 minutes,

giving them time to cut more people's

hair. I think it's funny that a

competing salon opened across the street

and put a sign in the window that said,

"We fix $6 haircuts." A clever way to

use that low price point against them

and to attack the quality, but again, it

is the fast food of haircuts. There was

a sacrifice in quality, of course, but

it was a sacrifice that a lot of people

were willing to make. The customers were

also attracted by the consistency of the

haircuts. It would come out the same

every time. the later hours. They were

open for much longer than the

traditional salons that would usually

close around 5 or 6 in the evening. The

high turnover meant that people could

just walk in without an appointment and

they could only be charged for the

services that they wanted. Kind of like

a modern-day Spirit airline approach

where it was a low base price and then

you would have to pay extra if you

wanted any of the extras like shampoo or

a specific style. Also, the stylists

were paid hourly rather than by

commission, which created an entirely

different dynamic. At the other salons,

they would have to build a list of

repeat customers, but as an employee of

Super Cuts, they would serve whoever

comes into the building. They were

attracting talent because they were kind

of like a safer option. Overall, not

necessarily better than the existing

model, but it was completely different

and there was obviously a large market

for it.

Not surprisingly, Super Cuts was a big

success, opening five more of them

before they started to franchise in

1978, which helped them open hundreds of

new locations throughout the 1980s.

Again, much like fast food, everything

is so standardized in these places, so

it makes them perfect for franchising.

That's where people open their own

salons under the Super Cuts name, but

pay the central company for the right to

do it. It is a comparatively inexpensive

and loweffort way to turn a small

company into a nationwide chain. Today,

pretty much all of the top discount

salons are heavily franchised and almost

certainly wouldn't be that big

otherwise. Sam Ross, for example, was

another pioneer of this concept when he

started Fantastic Sam's in the 1970s

that was also franchised across the

country throughout the 1980s before he

sold it in 1990. I mean, if this video

were to be made back then, it would be

called Super Cuts versus Fantastic Sams

because they were the two biggest that

were quickly taking over the country.

But in 1987, things started to go bad

for Super Cuts. In short, the company

didn't have the best relationships with

their franchises. They felt ignored in

making key decisions. They felt the

money wasn't being spent in the best

way. They even filed a lawsuit against

the company. All of that was likely at

least part of the reason Super Cuts was

sold to a group of venture capitalists

led by a man named David Lipson. And the

new owners did settle the lawsuits and

repair the relationships to an extent.

But in the 1990s, David Libson led the

company with an ill-advised risky

strategy. The company took control of

many of those franchise locations,

jumping from 45 to 500 of them within 2

years, quickly opened a ton of new ones

in competitive areas like New York, and

even had a public stock offering. By

1995, Super Cuts had grown to over $100

million in revenue, but had lost $7

million from it. Even on a personal

level, things were sketchy with David

Libson. He was running the

California-based company from Chicago to

save money on income taxes. He was oddly

being paid as an independent consultant

rather than an employee. Their CFO

testified that Lipson pressured him to

make some fraudulent accounting entries

and he was found guilty of insider

trading in a civil case. He was asked to

leave the company in 1996 and later in

the year Super Cuts was bought by Regis

Corporation for $150 million. At the

time of the sale, a lot of people were

saying that Regis overpaid. The LA Times

even identified them as the ailing super

cuts in their headline about the

acquisition. But Regis was already the

owner of almost 2,000 salons under

various names like a competing chain

called Master Cuts and were aggressively

trying to increase their market share.

They had already made 41 acquisitions in

the previous 30 months, but Super Cuts

with their over,00 locations was by far

the biggest. From there, Regis used

their resources to finally get Super

Cuts back on track, partially through

investments in advertising and partially

through scaling the chain even further.

Today, there are twice as many Super

Cuts compared to when they bought it.

So, mathematically, half of them have

been opened under their control. Now,

2200 locations is obviously quite a bit,

but by that measure, they're only half

as big as Great Clips. They claim to be

the world's largest hair salon brand

with 4,400 locations throughout the US

and Canada. I truly believe that without

Super Cuts, there would be no Great

Clips. I say that because as soon as

Super Cuts started to gain some traction

in the 1970s, they received a lot of

attention from hairdressers and

potential business owners who saw

potential in their revolutionary

concept. An example of this would be

James and Brian Tucker. This part gets a

little uncertain, but as I understand

it, they were brothers who approached

Super Cuts about opening their own

franchise in Canada. When they were

rejected, they went on to start their

own salon called Super Clips. Over the

next 3 years, they grew Super Clips into

a small chain in the Toronto area and

were seeking out franchises to expand

their chain down into the US. So, they

approached a higherend US chain called

The Barbers to see if they'd be

interested in opening a Super Clips

franchise. The Barbers then sent an

executive of theirs named Steve Lemon to

Canada, I guess, to investigate and then

come back and advise if he thought Super

Clips was a promising operation. Like I

said, everyone was buzzing about Super

Cut. So, when he realized that Super

Clips was heavily based on Super Cuts,

he very much liked the idea and advised

the Barbers to in fact open that

franchise. Now, stick with me here. I

guess the barbers weren't crazy about

the idea of opening a lower-end salon.

So, Steve Lemon quit the company and

teamed up with a stylist named David

Rubenzer to open their own Super Clips

franchise. That franchising deal somehow

ended up falling through. So, instead,

they opened their own salon called Great

Clips. The first one was near the

University of Minnesota in 1982, but the

following year they brought on a third

partner who had franchising experience

named Ray Barton, who pretty much took

over the company and used franchising to

help grow it into the market leader that

it is today. Kind of a confusing path,

right? But you can see how the creation

of Great Clips was indirectly linked to

Super Cuts. And there's even another

layer here. The barber, you know, the

company did end up opening a competing

lower-end salon of their own called Cost

Cutters, just a few miles away from the

original Great Clips right around the

same time. Cost Cutters then went on to

become yet another chain with hundreds

of locations, many of which were opened

inside of Walmart stores. In 1999, Regis

merged with the barbers, meaning Cost

cutters became part of the same company

who owns Super Cuts. There is a lot

going on here, right? All of these

unexpected twists and turns. One other

franchise I want to mention that I think

brings everything full circle in a way

would be Sport Clips. This one was

started by Gordon Logan, who had quite a

respectable career well before starting

the franchise. In the 1960s, he earned

an engineering degree from MIT before

volunteering for the US Air Force during

the Vietnam War. In the 1970s, he earned

an MBA from the Wharton School of

Business, worked for a public accounting

firm, and eventually became a franchisee

for a chain of hair salons in Texas

called Command Performance. By the

1990s, he felt that the industry was

underserving the male market. Remember,

before Super Cuts, men would go to

barbers traditionally, but over those 20

years, the super cuts concept had

essentially eliminated the barbers of

the country. The existing ones were

aging and going out of business. There

weren't many new ones in practice. So by

1993, there weren't many places that

were specifically designed for men to

get haircuts. So he created a sports

themed salon because that is a likely

theme to attract men. They almost go

overboard with it in my opinion anyway

with the wall of decorations and giant

televisions and the sign that says

showers for the shampoo area. I'm just

saying that there is no mistaking that

this is a place for men who like sports.

and he was right in predicting that

there would be a big market for that and

it really does help differentiate them

because let's face it at this point

there's not an incredible difference

between these franchises they're all

kind of based on each other with similar

concepts I mean I've been having trouble

even keeping the name straight this

entire time with all the clips and cuts

it's just so much to keep straight but

Sport Clips does have a way of standing

out from the others in the following

decades it also relied on franchising to

grow to 1,800 locations claiming to be

the only one that could be found in all

50 states. They have made promotional

deals with professional athletes along

with the NBA and NASCAR. In fact, all of

these companies have utilized NASCAR for

advertising because those stands are

filled with people that are likely to

get their haircut at one of these

places. Let me know in the comments what

do you think of all of these places to

get your haircut. Was I right in saying

that this is an interesting topic that

tends to get overlooked? all of these

unexpected twists and turns that have

helped shape the industry and the way

that many of us get our haircuts. I do

have to ask that out of all of these

competing franchises, which one do you

prefer the most? And what impacts your

decision? Is it the people working

there, the environment, the prices, the

proximity to your house? What makes you

choose one of them over the others? Or

do you prefer to go somewhere entirely

different? Or do you do it at home? And

any other thoughts you have about Super

Cuts, Great Clips, or any of the others,

leave them in the comments. I'd like to

hear what you have to say. Thank you for

watching.