Tony Zoobi

Tony Zoobi could well be the prototype for Australia’s future franchisee. As franchisors struggle to recruit franchisees, they are increasingly looking to existing holders to take on more stores. Zoobi is exactly the type of person franchisors want – he’s young, a convert from the professional world and he owns six Hairhouse Warehouse stores turning over $5.5 million.Today Zoobi, who was recently named Australia’s top multi-unit franchisee in the Franchise Council awards, talks about building an empire within an empire, why franchisors need to change their recruitment push and why he could one day take over the Hairhouse Warehouse chain. 

Multi-unit franchisees are a big talking point in the franchising sector at the moment, with a lot of franchisors looking to drive growth through multi-units. Did you always want to be a multi-unit franchisee?

Before getting to Hairhouse I always saw myself as a multi-unit franchisee. I wanted to create a little bit of my own empire within the business. So from the first unit to the second, it took me about eight months and what I needed to do from the first to the second was get all my systems in place and understand the model. Once I was comfortable with that, I was ready to expand.

What was your background before getting into franchising?

Before franchising, I worked in corporate. I worked at General Motors Corporation in Dubai for about seven years.

You were working in the corporate world as a salaryman. When did you decide you wanted to go into your own business?

Back then I had an ambition to be this corporate high-flyer and thought I just wanted to be in corporate and utilise all my studies. And then after a few years in Dubai I realised I wanted to do something to incorporate my family. I’ve got two brothers here in Australia, so I wanted to come back and do something that involved them. 

Was franchising the first choice? You had the idea of building a little empire but I guess there’s two ways you could do that. You could strike out on your own or take the franchise option.

I thought about creating my own brand, but I had met Tony and Joseph, the owners of Hairhouse Warehouse, and I realised that there was this massive opportunity, and thought, why try to start all over again when there’s this great model I could hit the ground running with.

So I decided to grab this brand and to open the first store in Brisbane. I ended up moving to Brisbane and launching Hairhouse Warehouse in Brisbane and then I moved to Sydney. So within 18 months I had moved from Melbourne to Brisbane to Sydney.

Given that you approached this with the idea of building a business, what role did you take at the start? Were you working in the shop or were you almost straight away trying to put the processes in place that would allow you to go to a multi-unit model?

Initially I wanted to understand the model really, really well before I became very strategic. I worked on the shop floor, stocking shelves, cleaning, managing rosters, managing people, learning about the products and about the services that we have to offer. I became really, really ingrained into the business and I became part of the business. I was trying to live the brand a little bit. Coming from a marketing background I wanted to really understand what it was all about.

And I would say within three months I began to become a little bit more strategic and started to work on the business and looked at expanding and working on the systems as well. Hairhouse already have systems in place, they have operational structures, but then I started to add my little touch to it, things that would work for me.

Was it difficult to get that balance right? I guess you have to be prepared to give up control of the every day, every minute running of the store to focus on those systems.

It was hard to go from corporate to being on the shop floor because that was a huge, huge culture change. And then it was a huge shock to be involved day-to-day and minute-to-minute and then actually step away and try to become more strategic.

The second store you opened was in Sydney. Why?

The directors wanted me to look at opportunities in Sydney because I’d done so well in Brisbane; we had no brand awareness in Brisbane when I first opened. They wanted me to try and translate that to Sydney. I moved to Sydney and I found lots of success in my second store there.

That’s a big call, though. When we see franchisees go from one store to a second store, the stores are often within a couple of kilometres of each other so they can keep their eye on what’s happening across the two units. How did you manage that?

Being able to work on the business really helps with that. So having a structure and system in place really helps me monitor my stores. With the laptop, I can monitor the point-of-sale and I’m able to access information about the performance of the store and break down the performance of individual staff members. And you can call that person and coach them on the phone. You can live in one city but operate a business nationally or globally through technology.

But how do you spread your time across the different stores?

There are two things. I set up a structure where I have store managers in each store who run the business like it’s their own. These are business managers who are trained to help them understand how to run the business. And then I have an area manager. All the store managers report to the area manager, who also reports to me. Her role is basically to go from store to store and to be a second me, because obviously I can’t do everything all the time.

I drop into my stores unannounced weekly. But I can only do so much on site; sometimes being away is more effective for me because you don’t get caught up in all the micro things. You want to look at the business overall and you want to work on major local area marketing campaigns and community marketing campaigns. I am also trying to go to training programs so I can learn new skills.

You’ve obviously got a set of systems across your little empire. How does that fit into the Hairhouse Warehouse systems? And have the Hairhouse Warehouse guys given you the autonomy and flexibility to develop your own systems?

Absolutely. The good thing about Hairhouse Warehouse is that they have really great systems in place and a lot of those systems have evolved through ideas from franchisees such as me. In addition to what the franchisor does, they really encourage that entrepreneurial spirit and that’s why I like being in Hairhouse Warehouse – they like the fact that there are multi-siters who are doing some great things and they are really, really supportive. My brothers and I have eight stores between us and they’re happy for us to have 20 stores, as long as we’re successful and do the right thing.

It sounds like you’ve also done a lot of your own marketing to complement the brand’s marketing.

I think the growth in franchising is going to come from multi-siters. A lot of research backs this and a lot of franchisors in this country are now hopping on board and recognising that the only way they are going to grow is having more mutli-siters expanding their business. You can have 130 franchisees with 130 stores or you can have 50 franchisees with 300 stores, because multi-siters are very entrepreneurial.

Multi-siters need less operational support, but what we need is more marketing. So for us to grow, we focus on marketing. I’ve created very strong local area marketing calendars for all of my stores to complement national marketing campaigns coming out of our head office. I plan a calendar 12 months ahead and then we break it up three months at a time. And we create campaigns to suit the local store. Every store has different customers, different ethnic groups, in a different demographic, so we tailor our marketing to the local community and the centre we’re in.

Do you get the feeling that sometimes franchisors cater to the buy-a-job, mum-and-dad franchisees and not to someone like yourself, a professional manager, a professional franchisee?

Before Hairhouse Warehouse I looked at other franchise models. Most franchises out there do cater to your mums and dads who want to buy a Monday-to-Friday or Monday-to-Sunday job. But most of them don’t tap into the people who are very entrepreneurial, who want to invest and want to create an empire within an empire. I think that’s where the opportunity is in the franchising industry in Australia, to appeal to people who are more entrepreneurial and want more than that income from that 9-to-5 job.

A lot of the franchise groups don’t have structures to cater to multi-siters, they’re mostly catering to individual operators. One good thing about Hairhouse is we’ve just implemented a new club called Jet Club, which is a committee of multi-site franchisees; we get together in different cities and we exchange ideas and we visit stores and we look at best-practice examples. 

If there’s a franchisee out there reading this who wants to become a multi-siter, can you tell them about something that you got wrong or found really hard?

I think the most important thing is to understand how to read financials really, really well. I think the most important thing is don’t look at your sales, look at profitability. I think a lot of franchise operators say, “I just made X amount of dollars,” but they don’t understand their profitability. So I think it’s very, very important to sit some sort of program where you can learn how to understand financials, because to be a multi-siter, you really need to track them month by month with an accountant or someone similar who’s working with you.

And I think marketing is super-critical. Any person wanting to be a multi-siter has to understand the importance of local area marketing to grow their business.

Another big thing is ensuring you’ve got very strong systems in place; I’ve got 60 employees and if I didn’t have strong systems in place, I’d have complete chaos in all my stores.

I was talking to someone the other day about very successful multi-siters who end up buying out the entire franchise system, such as Don Meij at Domino’s. Could that be you?

I can definitely see myself doing something bigger. I think this has been a very good education for me and I would love to buy out Hairhouse Warehouse one day. I’ve certainly spoken to the directors about it; we work very closely together and we have a very, very good partnership. This is why I’ve stayed so long at Hairhouse Warehouse, because they’ve been extremely loyal to me. It was a bit of risk, taking on one of their stores and opening it in a fresh market, and in return they’ve been very generous to me. But the answer is yes, the sky’s the limit.