Rick Sander has his eye on a specific goal: recurring revenue.
Rick Sander never thought he was interested in franchises. But in early 2020, the former CFO for companies in media and telecom had started looking for his next move, and his job search wasn’t going that well since it coincided with the onset of the pandemic. So when a broker that represents franchises happened to cold call him in August, he decided to be open-minded.
“Typically I would have said, “I’m not interested. Thank you, but it’s not for me,’” says Sander. “But I had the time that day and I decided to listen.”
After that initial conversation, the broker came back to him with potential franchising opportunities, and one stood out: Hammer & Nails. He set out to learn more about the men’s grooming shop founded in California, where clients can stretch out in oversized leather chairs, sip on a cocktail and enjoy a personal TV with noise-cancelling headphones while getting a shave, pedicure, manicure or haircut.
Sander enjoys getting a good haircut or pedicure himself, so he could relate to the brand. He liked what he saw enough to jump in, signing a 19-unit deal to be an area developer for Hammer & Nails on Florida’s Gulf Coast. One thing that helped convince him to get interested in this franchising opportunity? Hammer & Nails offers not only single appointments for clients but also a “Grooming Club” monthly membership option that offers discounts for regulars who become members. “That recurring revenue really enticed me,” he says.
Sander isn’t legally allowed to reveal the investment required for his 19-unit deal. In general, according to Hammer & Nails franchise information, a franchisee must have a net worth of $500,000; liquid capital of at least $100,000; and invest from $400,000 to $600,000 in the opportunity.
In addition to recurring revenue, Sander says he also came to realize franchising could be an easier path at this point in his career than starting a business himself or buying a depressed business for a steal but then having to do the hard work to turn it around. “The franchise model is more or less a business in a box,” he says. “They do all the branding for you, help with fixtures, help with marketing and train you and train your people. This is a better concept for me.”
Sander had been living in Maryland when he decided to make this career move, but he already had a second home in Naples. And that residence is now his full-time home as he pursues this venture. “Florida is a better market for this, because it’s flip-flop season all year,” he says.
Sander plans to open the first two Hammer & Nails shops in the Naples area himself. He’s currently looking for a location in north or central Naples for the first shop, which he hopes to open around the fourth quarter of 2021. That will help him capitalize on both the snowbirds that start returning to town at that time of year and the holiday season.
“A fair amount of revenue from this whole brand is gift cards,” he says. “And once that customer comes in with a gift card what we’ll try to do, besides giving them excellent white glove service, is try to convert them to a membership.”
After that location is settled, he plans to open his second location in downtown Naples. Though Sander hasn’t worked in the grooming and beauty space before, he will be able to draw on his financial expertise as he gets his new venture started. “As a CFO I’ve negotiated leases; I’m familiar with working with landlords,” he says. “I’m also familiar with building out office space. I’ve interviewed plenty of people over my career…and put together teams.”
Sander wants to eventually transition to being a semi-absentee owner of these locations, so he knows it will be important to hire experienced staff and create a strong company culture. “It has to be a place where people want to come to work,” he says. “It’s got to be fun, otherwise people are just going to leave.”
While Hammer & Nails didn’t have any locations in Florida, Sander “didn’t want to bite off more than I can chew,” so he didn’t ask for the whole state. When he sells the licenses for the 17 other Florida locations (for a profit), he’ll get a cut of their franchise fee as the area developer. “That recurring revenue is there again,” he says.
A broker is currently helping scope out leads for future Hammer & Nails Florida locations. And once the Naples locations are open, Sander expects interest to pick up when people can see and experience the shops for themselves.
“Once the brand becomes known, then the shops will sell by themselves,” says Sander. “Barber shops are not unique, but what makes this brand unique is the man-cave-nirvana atmosphere. I think something like this is very unique and fresh.”