Brothers' business booms amid a hairy economy
It's no surprise that brothers Tony and Joseph Lattouf look like they've just stepped out of a salon. With almost 150 franchises around Australia, the founders of Hairhouse Warehouse can barely visit a shopping centre these days without stumbling upon one of their own.
While the economy has become a hairy ride for many businesses, this franchise is booming, with plans to expand to 250 stores in Australia, plus up to 300 franchises in the UK and 1500 in the US.
So what's their secret?
Hairhouse Warehouse founders Joseph (left) and Tony Lattouf. Photo: Luis Enrique Ascui
The way the brothers tell it, it all began with a small grog shop in the Melbourne suburb of Lower Templestowe in 1987.
Seeing the potential entrepreneur in his eldest son Tony, then just 18, father Michael — a Lebanese businessman — gave him a liquor store to run.
"It was a run-down, ready-to-close business," says brother Joseph. "Tony always had the entrepreneur in him."
Tucked away in a residential street, things didn't start well.
"The first week it took $1000 and I got very depressed," says Tony. But using his entrepreneurial nous, Tony offered wine tastings, parking attendants and bargain basement prices. In two years, Joseph said the store was taking $30,000 a week.
That cash eventually helped fund the beginnings of the brothers' hairdressing empire, backed by their parents.
Joseph, a young hairdresser, had dreamt of owning his own salon, and persuaded his brother to take on the business side.
Their first salon, called Lattouf International, opened in Doncaster in 1987. Sadly, the recession and sky-high interest rates had also kicked in.
"We didn't have a day off for years," says Tony. "Seven days a week we were there from seven in the morning until seven at night; we didn't stop. I was the main stylist — Tony was the front person to bring the people in."
Tony would offer free washes and blow waves to get potential customers into the shop, and once in the chair, Joseph would convince them to buy hair products and book them for an appointment six weeks later.
"We really invented the re-booking system," says Joseph. "We would get them back at nine o'clock and offer them an incentive."
Lattouf International expanded to another three shopping centres, giving the brothers room to explore their own ambitions.
"We fought like cat and dog but the good thing about it was, we were only fighting to make the business better," says Joseph.
The owners noticed that their hairdressers didn't seem keen to sell hair products. "It did our head in," says Joseph. "We had that lady or guy for an hour or three hours."
The brothers sometimes followed their customers to see where they spent their money after the salon, and it was often on cheap hair products from the supermarket.
That's when the idea for the Hairhouse Warehouse began to form. The brothers felt there was a gap for a salon that also offered a wide range of hair styling products.
"We didn't have a name but we knew there was a market out there," says Joseph.
Not all the experts agreed. "We had a lot of people advise us, but it was all the wrong advice," says Joseph.
The Hairhouse Warehouse chain started with one salon/store at Knox Shopping Centre in 1992.
"He (Tony) stocked it so you couldn't move. It was ridiculous," laughs his brother.
"We used to treat Hairhouse Warehouse as a part-time business. It was a baby."
The brothers placed a small sign in the corner of their Knox store calling for potential franchisees, and their own staff starting buying them.
Tony says it took them three years to write up a franchising manual, which is now the bedrock of their business.
"Our business is run by the hour, from the time the door opens, to the time the door shuts," he says.
Franchisees sign seven-year agreements, with franchises costing around $350,000 to $400,000 each, including stock.
Turnover is now around $160 million a year.
Twenty years after they opened their first Hairhouse Warehouse salon, the brothers' eyes still light up when they talk about their business. Next step is further expansion; the brand has been trademarked in 28 countries.
Tony, who reads inspirational books for 10 minutes each day, says business is all about turning negative situations into positive ones.
"The challenging times in business are when you want something and they say no to you," he says. "From that no, your goal would be to get something better, if it takes one day, two days, three days or a year."
Entrepreneur tips from Tony Lattouf
1. Have a dream.
2. Write a plan – always have your notepad and pen.
3. Succession planning – do it early; groom the successor from day one.
4. People – share the vision, the passion and the objectives.
5. Hardwork, self belief, initiative, do your homework, critique and review, back your judgement.