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Brothers Bring Subscription Model to their Styling Salons

South Jersey brothers Fred and Steve Vicario are South Philly transplants, blessed with heads of wavy Italian hair, the kind that can look perfect with little effort. Their business model, however, counts on people who want far more pampering. And it employs a method that more businesses, from spas to job-search networks, have resorted to in recent years to ensure repeat customers: memberships. Such membership or subscription-based models are proliferating at a time when online coupon networks such as LivingSocial and Groupon have elevated deal-hunting over brand or business loyalty. "Our main focus is the memberships," said Steve Vicario, Cherry Blow Dry Bar's chief operating officer. "Generating that guaranteed revenue a month is what helps you to break even fast. You want to . . . get that break-even fast, and the rest is gravy." The Vicarios took over Cherry Blow Dry Bar, a franchise of just eight U.S. locations, in April, with a plan to grow to 200 salons in five years, about 25 in the Philadelphia/South Jersey region. That's right,  200  storefronts, each lined with swivel chairs and mirrors and offering limited hair-styling services (blow-drys and extensions) but not cuts and color. Average appointment: 40 minutes, starting as early as 7 a.m. "It's a hot concept. It's not a fad," said Steve Vicario, 42, saying that the Cherry Hill salon where we met for an interview was booked that particular Friday with 70 appointments. Despite Cherry Blow Dry's lackluster growth since 2013, when its Australian founders expanded their five-year-old company to the United States, the Vicarios say they are confident of their growth goal. Franchisees need about $250,000 for start-up costs, including working capital, equipment and build-out. Of the eight current locations - in California, Florida, New Jersey, Tennessee and Virginia - the Vicarios own just the Cherry Hill site, in the Ellisburg Shopping Center. It's also corporate headquarters. Another local Cherry Blow Dry is expected to open in February in Newtown Square. Three more are soon planned, for Miami and Virginia. "We know nothing about hair, but we saw a niche in the market," said Fred Vicario, 47, Cherry Blow Dry's president. He and his brother were convinced of the wisdom of this pursuit after visiting Drybar, considered the blow-dry industry leader. Headquartered in Irvine, Calif., Drybar opened its first shop in Brentwood in February 2010 and expects to have more than 50 U.S. locations by the end of 2015. "But we knew there were different things they weren't doing that we could bring into Cherry," said Steve Vicario. One was to push memberships, which he said Drybar offered but did not emphasize. Cherry Blow Dry offers two types: $59 a month gets customers two monthly blowouts; any additional blowouts each month are at the discounted price of $35 each (regular price is $45); $99 a month comes with unlimited blowouts. Makeup services also are offered. Though hair care might not have been the Vicarios' forte, franchising is. As regional directors for Hand & Stone Massage and Facial Spa, the brothers developed 25 sites and own two, in Marlton and Voorhees. Formerly an executive at Maaco (20 years), Fred Vicario helped grow the auto-painting and collision-repair shops franchise based in King of Prussia from 300 to 550 locations, and he has been a Goddard School franchisee for 15 years. Each has a niche, as does Cherry Blow Dry Bar, Fred Vicario said: "We're offering a luxury to the masses." Cathy Ettinger, 64, of Cherry Hill, is one of the 250 paid members at the salon the Vicarios own. She comes twice a week. "I treat myself," she said of her $99-a-month Cherry Blow Dry membership. "I do my own nails." For the Vicarios, she represents a remedy to what ails most small businesses, said Lane Fisher, a partner at Philadelphia law firm Fisher Zucker L.L.C., which specializes in franchises. "All businesses struggle with cash flow, so a recurring [membership payment] creates predictability," Fisher said. And that, in turn, provides the economic foundation for expansion. Fisher pointed to Massage Envy, the largest massage franchise, with more than 1,000 locations and 1.4 million members. "The speed at which their membership model could grow allowed [franchisees] to open more than one," Fisher said.

How a Long Wait in Line Made This Franchisee Understand Demand and Provide a Solution

Franchise Players is Entrepreneur's Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email [email protected] Entrepreneurship is all about identifying a problem and creating a solution. Hiedeh Honari realized an issue in San Francisco while waiting for her blowout: the city didn't have enough blow dry bars to meet the demand. So, she decided to take action, opening a Cherry Blow Dry Bar. Here's what she has learned. Name:  Hiedeh Honari Franchise owned:  Cherry Blow Dry Bar, in San Francisco How long have you owned a franchise?  Opened in August 2014. Why franchising?  I favored the idea of opening a business where I didn’t have to reinvent the wheel. There are many components that go into an operational business. With the backing of a franchise and a strong corporate team, I could hit the ground running. What were you doing before you became a franchise owner?  Full-time mom! I’ve also worked in interior design, and as an actress. Why did you choose this particular franchise?  I was waiting in line at a different blow dry bar and recognized the long lines and high demand. It was at that moment that I knew this was a booming industry and a business that had great potential. I chose Cherry Blow Dry Bar not only because I loved their concept and approach, but because I wanted to be the first franchisee in San Francisco and introduce the brand to a new city. Where did you get most of your advice/do most of your research?  My husband and our attorney. Of course, I also spoke with every friend, family member and professional acquaintance I could get to listen! I had enormous positive feedback, and also did a lot of research online. What were the most unexpected challenges of opening your franchise?  Opening was the easy part! Once you open and you find yourself handling both the business and customer ends is when the challenges kick in. What advice do you have for individuals who want to own their own franchise?  The business does not run itself, be prepared to do the gritty work and the handle the not-so-glamorous ends of the business. What’s next for you and your business?    I would like to expand. I’d love to have up to three salons, more employees, and be the go-to blow dry bar in San Francisco!