FRANCHISES

How I Turned a Mess Into a Moneymaker

European Wax Center's David Coba (with his siblings) turned a disastrous sideline of his father’s salon business into a national franchise.
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Though his franchising company now boasts 215 salons, David Coba entered the industry rather reluctantly. For decades, his father, Nelson, had owned and operated a hair salon in Aventura, Florida. But rather than working alongside his father, David had started his own business, building custom wood-carved wall units that commanded thousands of dollars each. Only at the urging of his father and his brother, Josh, did he finally join them full-time at the salon.

At the time, in 1995, Nelson Coba was knee-deep into a challenging expansion, and he realized he needed more hands on deck. On a trip to Argentina three years earlier, he had met a woman who owned 50 salons solely devoted to waxing. Inspired by her success, he began offering waxing at his own salon the next year. In order to accommodate the new service, Nelson relocated his business to a 3,000 square-foot facility, three times the space of his previous location. Between the expanded space and the new service, the business had become quite difficult to manage.

Indeed, David says, when he and Josh joined the business, the waxing was a disaster. First of all, the service was unprofitable. The salon's special, which included a full-leg, underarm, and bikini wax, was priced far too low, at $28. "I called it the Going Out of Business special," David says. Associates also often had trouble managing demand: guests would come in every 15 minutes for 45-minute services. And the wax itself proved to be, literally, a mess. By the end of the day, David says, the floor would be sticky with the residue. Initially, David tried to convince his father to discontinue the service, but Nelson remained adamant that it set his business apart from other salons. So it became David’s personal mission to, as he puts it, "fix the wax."

He introduced a membership program, in which frequent customers would pay a yearly fee to received unlimited waxing services, and wrote a script for associates to sell the new packages. He set up a new appointment system to reduce customers' wait times. He researched the optimal climate for working with wax and adjusted the salon's temperature accordingly. To preserve cleanliness, he also installed a cabinet system for associates to dispose of used wax. As a result, the waxing service was transformed from a money loser into the most profitable division of the salon. Nelson's gumption had been validated. "He had seen a vision that I hadn't yet seen," says David.

The turnaround eventually fueled David's ambitions to open additional salon locations. Initially, he and his brother sought to open full-service salons, but because waxing was so profitable, they quickly decided to focus exclusively on that service. David was attracted in particular to how easily the service could be replicated. "Someone can come in and say, 'I want highlights like Jennifer Aniston,' and then they see it and don't like it," he says. "Waxing's not subjective. Either the hair's all gone, or it's not." In January 2004, he and Josh opened the first European Wax Center salon in Fort Lauderdale, Florida. It turned a profit after only its first month of operation. Within three months, they opened another salon in Aventura.

From the beginning, David and Josh knew they eventually wanted to expand nationally, but they weren't sure of the best route to accomplish their goals. Their father suggested franchising. None of them, however, knew anything about the process. After months of research, the brothers decided the model would be a good a fit for the business: it had high profit margins, and they had already developed a series of repeatable systems that could easily be adopted by new associates. Early in 2006, they decided to register European Wax Center as a franchiser, and they brought on their sister, Jessica, to manage the franchise development process. At the end of that year, they completed the registration process. Three months later, in March 2007, they sold their first franchise, which opened in Kendall, Florida.

In their first couple of years of operation, the Cobas awarded only three to four franchises a year. But since then, the company has added franchises at a brisk pace. European Wax Center, unlike some franchisers, does not require its franchisees to open multiple locations, but most franchise owners have gone on to do so anyway, David says. In the next few months, the company plans to introduce a system to identify ideal franchisees based on the profiles of their most successful franchise owners.

David attributes much of the company's success to its approach to leadership development. Few members of European Wax Center's senior staff come from traditional corporate backgrounds. Most of them, in fact, began as guest services associates in the company's first salons. For instance, Christelle Christie, the company's head of guest services, first worked as a receptionist and later trained to become a wax specialist. David eventually tapped her for a position in the company's corporate office. The company's marketing production manager, Sofia Collado, also started out as a guest services associate. After moving to the corporate office, she expressed an interest in marketing. "Today, I watch these young individuals who have been here since they were 21, 22, 23," David says. "It's amazing how much they've grown."

Although his career made an unexpected turn 16 years ago, David is now exceptionally grateful to his father for urging him to change his path. "I loved building, but I wanted to use my head instead of my hands," he says. "He allowed us to dive in 100 percent."

IMAGE: Courtesy Company
Last updated: Oct 7, 2011




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