A Top Emerging Franchise, Hello Sugar, with Brigham Dallas

0:01Light that spark fire nation JLD here and welcome to entrepreneurs on fire brought to you by the HubSpot Podcast Network, the audio destination for business professionals. With great shows like Imperfect Action, today we'll be breaking down the top emerging franchise. To drop these value bombs, I am brought to Brigham Dallas into EO Fire Studios. Brigham is the founder of Hello Sugar, a Brazilian wax and sugar concept where he owns 14 locations in Phoenix and leads one of the fastest growing franchises in the business with 67 open units in just one and a half years. His leadership in the franchise industry is contrarian and unorthodox.

0:41Some say he's crazy. Others say he's a trailblazer. In this podcast, we will explore some of his most radical ideas and get to the bottom of it once and for all. And we'll talk, Fire Nation, about how he, Brigham, is growing just so fast. We'll talk about the contrarian beliefs he has, the hybrid model, and so much more. And a big thank you for sponsoring today's episode goes to Brigham and our sponsors. As business owners, it's part of our job to stay ahead of the curve. And with AI stealing the show these days, it's time to study up. But where do you even start? Start with HubSpot. HubSpot's AI power tools, including their content assistant and chat spot, are changing the way you create content and communicate and serve your customers.

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2:04NetSuite is the number one cloud financial system giving you visibility and control to make better decisions faster. Right now, you can defer payments of a full NetSuite implementation for six months. Take advantage of this unprecedented special financing offer at netsuite.com slash fire. Brigham, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. What's up, Fire Nation? Good to be here, John. Thanks for having me on the show. My name is Brigham. I'm the founder of Hello Sugar, a Brazilian wax and sugar salon. And one thing that I think that is contrarian to what most people believe is that I spend a significant portion of my energy removing myself from the business, not being part of it.

2:52So, you know, a business doing, let's say,$200 ,000 in revenue is twice as busy as a business doing$100 ,000 in revenue. and what's important is the business doesn't wait for you to get profitable to get up to speed it just grows right so if you're on a rocket ship it's just growing and entrepreneurs if you're like me it's like hey I just want to take on whatever I can I want to do the next task I just want to keep on growing and do it all until you come to this point where you're just you're just over water you know you're underwater you're overwhelmed you're just you're just suffocating right and so I learned early on in my career as as this business was really on a rocket ship I I learned that I have to remove myself from the system.

3:30So on a regular basis, I asked myself the question, how do I never do this task again? That's what I wanted to know. And I started building systems around that. So for example, in the beginning, it was just like, okay, take this person, move them off to this side. He's got that task. But now that we're a larger company, over 100 employees or so, we have a command center, our org chart. And I built this org chart. And then from the top on down, I have the mission statement. Our mission this year is build 100 units, 100 flagships, and tell our story to the world, which is what I'm doing here. And Fire Nation, we're going to keep telling stories as well.

4:05As you can tell, Brigham's bringing the energy. He's bringing the passion. He's bringing the value bombs. But I do want to start off by just getting a good idea on exactly what the heck is Hello Sugar, the Brazilian wax and sugar concept. What is this? Break it down for us. We are a waxing and sugaring center. So we do Brazilian waxing, which is waxing the bikini areas. We service men and women, but 90 % of our clients are women. And we do something called sugaring, which is an organic form of hair removal that hurts less as well as waxing. And what we found in this market is that people want both.

4:42One's not enough because some people's body's better made for sugaring and some people's body's better made for waxing. That's the concept in a nutshell. Really interesting. And it's actually a hybrid model, Fire Nation. We'll be talking more about that later, but something to think about. How can you implement things like this into your business to be serving the specific customer with their specific needs? So Entrepreneur Magazine did rank Hello Sugar as a top emerging franchise. You're growing so fast. We share some crazy numbers in the introduction. I just want to know how. When I started the business, I was about four years in.

5:18We were making about 6 % to 8 % profit. It was okay, but it wasn't great. And I looked at that and I was like, man, what do I do here? I was struggling, right? And I started thinking about it. I'm like, you know, if somebody comes in the door, they will have an amazing experience with us. They'll become a member. They'll love us. But how do I get more people in the door? And the thought came to me, lower the barrier to entry. What's the lowest we can go with the barrier to entry? Free. So we started offering free bikini waxes. We went out to fairs. We went out and handed cards out in the Starbucks parking lots.

5:46We went on social media and we just said, we're giving away free bikini waxes. and then what we did was we got them booked we created trust with them and then we upsell them to a brazilian wax which most people might not know but a bikini is like a less of an area than a brazilian we'll just we'll just keep that as the less graphic version uh and it works incredibly well like we had a 90 upsell rate so then i i started coming up with this concept it's called the freemium model you give something away for free or for a low value and then you upsell them And the process is something larger. So then I looked at franchising.

6:20Franchising in this world, like in our space, is a$400 ,000 box. It takes a year to build. You're putting it in a place that you don't know anything about. You're hiring a ton of people at once. That's a huge commitment, John. That's a huge commitment. So how do we lower the barrier to entry? We created a brand new model. Our model has two salons for$135 ,000 total. You can open in three months instead of a year. and within the first day that you open, your books are full. And the way that we do this is through a 10 by 10 box inside of a salon suite. So think of like a WeWork where you have like rentable office space.

6:58There's like salon boutiques that rent only to salons and we put our model inside of that. And that's how we get started. Then we incubate, we build it over time. And within six months to a year when we're well established, we're mature with the clients, with the staff, our franchisors are mature. then we look to move this into the flagship. And the scary factor of doing a$400 ,000 build out and having all of this under your belt is way less because you had this step model that allowed for, similar to a freemium, a low risk model that allowed for you to stomach or digest the bigger risk with more data behind it to choose from.

7:35And I want to talk about that financial risk aspect because I know a lot of my listeners, they do love the franchise model. I mean, it's this opportunity where it's a proven ground, you get support, you've got marketing, you've got guidance, you have something that just flat out works. But most franchises, even with all of that involved, have massive financial risks and you're able to avoid at least some of that. So tell us more. The step models work, right? With this, you break it down 135 ,000, you're looking at 65 ,000 ish per salon. That's something that people could do without even taking off a large loan.

8:14Right. And then, you know, with the build out, usually in a build out, when you're hiring for a flagship, like a flagship, be like a, like a European wax center, like a large box, you're getting 40 applicants and hiring 10 to 15 with us. We're getting 40 applicants and hiring just two. That's really digestible. That's like your best cream of the crop. Come to like them employees, right? And so it just makes it a lot easier to grow that model. Fire Nation, you only have so many swings of the bat when it comes to your hard-earned dollars and cents. So you want to be strategic. You want to take your time.

8:50But at the same time, there's reward that comes with risk. And risk is going to be engaged in every scenario you go into. But like Brigham's talking about, how do you minimize that risk? How do you lessen that risk? How do you make that financial investment have a much better opportunity of success? And we have a lot more to talk about around all these topics, some really cool contrarian beliefs that Brigham has, and much more. When we get back from thanking our sponsors, Success Story, hosted by Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

9:28Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business, startups, and entrepreneurship. One of Scott's recent episodes was with none other than Jack Canfield, where they discuss adapting to life's twists and turns. Listen to Success Story wherever you get your podcasts. Having visibility and control over your finances is a must. And if your business earns millions of revenue, then this is for you. NetSuite by Oracle has rolled out the best offer we've ever seen. NetSuite gives you the visibility and control you need to make better decisions faster.

10:01and for the first time in NetSuite's 25 years. As the number one cloud financial system, you can defer payments of a full NetSuite implementation for six months. That's no payment and no interest for six months. Take advantage of this special financing offer today. NetSuite is number one because they give you everything you need to reduce manual processes, boost efficiency, build forecasts, and increase productivity across every department. It's no wonder 33 ,000 companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, e-commerce, and more.

10:31If you've been sizing NetSuite up to make the switch, then you know this deal is unprecedented. No interest, no payments. Take advantage of this special financing offer at netsuite.com slash fire. That's netsuite.com slash fire. To get the visibility and control, you need to weather any storm. netsuite.com slash fire. So one thing, Brigham, I want to circle back to that I did talk about at the beginning and promised we would circle back to it. So I'm closing that loop, is the hybrid model. Because I really think it's important for our listeners who are already maybe running businesses of their own that don't have a hybrid model to learn from this.

11:07And again, it kind of differentiates what makes Hello Sugar even more special and unique in the marketplace. So that hybrid route where you combined both wax and sugar. So waxing and sugar was available. How did you do this effectively? And again, let's kind of reiterate and go deeper on why you went this route. I'd like to tell you, John, that I'm like really smart and thought this all the way through. And this was like a genius thing on mine. It wasn't, it was serendipitous. Like the name Hello Sugar was meant to be like, make you feel comfortable. Like, Hello Sugar, you know, that was the kind of play on the words.

11:45People started calling us and saying, do you guys do sugaring? Do you guys do sugaring? No, what's sugaring? We didn't even know. And so somehow like after getting tons and tons of these calls, it just kind of fell in our laps as a waxing salon that the hybrid was better. I look at that now, eight years ago, I would never have thought of this, but I look at this and I say, okay, if I'm in a market, how do I upsell? I mean, this is the real principle here. So I say, okay, we're in the hair removal market. What are the ways to remove hair? You have waxing, we have razors, we have sugaring, we have lasers, right?

12:16And so then what can we do in this? Well, we're not going to do lasers and we're not going to do the at-home care removal. These are the two that we can focus on. And it turns out that our model, our pitch is it hurts less here. And it hurts less because we find the right product for your skin. Sugaring is better for some people. Waxing is better for others. Why not do both and capitalize on the largest of markets? Fire Nation, I hope you're thinking as Brigham's talking about, what are some ways that I can do this in my business? I know that my customer has a need that I provide a solution to, but what about the customers that don't come in because I'm not offering solutions to their needs?

12:56But it's really close and it could be a very, I don't wanna say simple, but it could be a realistic add-on, a nice parallel offer of a service. And man, I mean, this could double, triple, sometimes even quadruple what you're doing because now people are talking about it and word of mouth happens and the trust grows and the more repeat customers. But I want to talk about contrarian beliefs because you have a couple, Brigham, and one of them's around receptionists. A lot of people are just thinking, oh my God, you need to have a beautiful receptionist when you walk in the door that jumps up, that walks over, that gives you a cup of tea with some hibiscus in there and is giving you a little ginger snap to kind of nibble on and is giving you a massage while you're in the waiting room.

13:43You believe you don't need them. Tell us more. Let's just go back a little bit. So we start off in these 10 by 10 suites, and then we upgrade to what's called a flagship. It's a four to six room box with a reception area up front and the rooms in the back. And we had a lot of problems with reception, especially during COVID. COVID was particularly difficult for most businesses. For us, it was a blessing in disguise. We could not keep staff for hiring workers that are paid close to minimum wage. And we had to keep a minimum wage or close to it to be able to do the profits that we're able to do.

14:14Last year, we had receptionists. But we started with a new tinkering model of just getting rid of them. I don't know about you, John, but when I walk into a waiting room, I'm on my phone. I don't like to talk to people. It feels awkward if I'm the only one in there and I'm just on TikTok and somebody else is – they want to start a small talk conversation. I just don't like it. I just don't. And so I started saying, okay, what are the roles of receptionists? Well, they answer the phone. They greet people at the door. They check people out. they help walk-ins book appointments, right? So we went down all this list and we said, okay, how do we do this without a person here?

14:45You know, I thought of like the Japanese sushi ramen places that like bring the robots bring the sushi to you. I was like, okay, like what, what if we did something like this? You know, like, okay, that's stupid. Like, no, that doesn't work. And so we started going down it and we re-engineered our salons to have a pathway to an iPad where people can check in. There's a QR code on the wall where people can scan and they can book an appointment if they're a walk-in. And then we had the estheticians check the clients out. And what happened when we did this, John, we tested this in one location. Not only were we able to get rid of a massive cost center for us, but at the same time with the esthetician checking the client out, this is super important, we sold more memberships.

15:23We actually made more money by not having the receptions at the front than we did with the receptions at the front because they had a connection with the esthetician in the back of the room that they were able to bring to the front of the room and check that person out. It's a lot harder to say no to somebody when you're the one waxing them, you're naked on a table than it is to a total stranger who's, you know, kind of their passion about the job, but probably not that passionate about the job. Oh, would you like to buy a membership? It's a totally different experience. And so by taking that person out, we sold more memberships.

15:54We had less problems with staffing. We had a whole arm of the business, literally almost half as many receptionists as estheticians are in the business. We took that whole arm out. And the biggest thing, John, is our profits went up 35 % when we were able to do this. Fire Nation, this is something that you need to say, hey, I know I have my processes and my systems with my business, but where's something that maybe is causing a block or is an unnecessary expense or just something that I can try that's different that might improve the customer experience? And by the way, it might not. And then you just replace it with what you had that was potentially working well enough at the beginning.

16:33So, I mean, I like this idea of just testing different phases of the process and figuring out what works best. I mean, who knows what it could be in your situation. I mean, I could be having another conversation with another franchise individual. It's like, hey, like we actually pay our receptionist, you know, minimum wage, but we are able to be just because of financial reasons, give them like a cut of every time somebody signs up, they get a commission aspect of that. So now that makes them not just like kind of this vanilla, do you want to sign up or do you want to upsell? But it turns them into like a salesperson where they're like, I only eat what I kill.

17:08And now they're like really this big revenue driver. And that might not work. I mean, it depends on so many different things in your business. What are the profit margins? What is, you know, the opportunities, you know, what's working, what's not working. And I love always testing these things. And I want to talk about contrarian belief number two that you have, Brigham, which is that franchisor marketing funds are wasteful and franchisees are poor at marketing. Now that's not the case for Hello Sugar. So tell us more. So like in a traditional franchise model, take almost any of our competitors and many franchises out there, they will do the marketing for the franchisees.

17:46Now I've been on the road for the past like four months doing franchise expos and talking to franchisees and potential franchisees. And what I get all the time is I suck at marketing. I don't know anything about it. And that's fair, right? Because to be good at marketing, you need two polar opposite skills. You need one, which is like, think of like the socialite personality, like the person that's just gregarious, loves parties, super creative, like fun, vibrant. And then you need that nerd in the back of the room that just can't look you in the eyes. You know, he like looks at your feet when he talks.

18:17He's just a data analyst, analytic animal, right? Like he's just really good at reading numbers and like, and you need both of those at once, right? And so finding that person is a unicorn, finding them while they're running another business is virtually impossible. So if a business needs marketing to succeed, which is 95 % of businesses, it's really hard to get it right if you're trusting the franchisees to do the marketing. On the other hand, having somebody at a national level, being able to do the scale that's necessary to help the franchisees, that's really hard too. So what most franchises do is they'll have a one to 2 % marketing fund on top of the royalties.

18:54Let's say royalties is an average of 6%, that's normal. So now they're charging 8%. So 2 % is there. And if you look at FDDs, they basically say, we can use this for whatever we want as long as it's a marketing. It's a general fund for advertising for the brand. And that could be them going to conferences to sell franchises, this could be large national TV commercials where you just really don't know where those dollars are going. And John, this is the principle that I have and this is what I stick to. Every dollar that is spent on marketing should be tied to a revenue creation within that company.

19:27You should be able to look at the leads coming in, what those leads actually purchased, and see if that marketing dollar was worth it. And if you can't, you've got to stop doing that marketing. So what we do at Hello Sugar is we do the marketing for the franchisees. We say, look, you don't have to do all this with us, but there's no better way. And we do social media advertising, so it'll be on TikTok, Facebook, Instagram. We do things on Tinder, on Grindr. I mean, you just name it. If you could find a social network, we're going to be on there. We blast out these ads for basically come in for a free bikini.

19:58And then we upsell them to a Brazilian. And we can track it from the lead that comes in all the way through to the actual dollar that was spent in the store with the lifetime value of the customer. Fire Nation, this is powerful stuff. And this is the world that we live in. These are tools that are available to you if you choose to wield them correctly. So, Brigham, we talked about two contrarian beliefs. You shared with us the hybrid model, which I think is a super cool thing for my listeners to think about. You talked about avoiding financial risk. We talked about some really cool things today.

20:31Let's take it home. What is the single thing that you want Fire Nation to walk away with from our entire conversation today? Building businesses is hard. It's a tough thing to do. So, picking the right strategic partner. If you're going to go down the franchising route, I would say 50 % is the business itself, 40 % is the team that you're going to be working with, and 10 % is market externalities. Really do your homework on the people that you're going to be working with within a business, whether it be franchising or strategic partners, because that's going to be one of the biggest driving factors of the business.

21:06Second thing is look for ways to mitigate risk. We do this by letting go of receptionists, so we have fewer variables in the salon, by running the marketing for the franchisees, but in a very cost-effective way, by having a hybrid model that reaches out to everyone, and just building systems that allow the franchisees to be working on the business and not entirely in the business. Those things eliminate variables and increase the chances of success. John, I want to leave that with you guys. We appreciate that. That's a great ending value bomb. If Fire Nation wants to connect with you individually, your company, what call to action do you have for our listeners today?

21:49Bring them at hellosugar.salon or check out our website hellosugar.salon to learn more. There's a franchising page in case they're interested. Fire Nation, you are the average of the five people you spend the most time with. You've been hanging out with BD and JLD today, so keep up that heat. For links to everything we talked about today, visit eofire.com. Type Brigham, B-R-I-G-H-A-M, in the search bar. The show notes page will pop right up. Brigham, thank you for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you and we'll catch you, brother, on the flip side.

22:25Pleasure to be on the show. Thanks a lot, Fire Nation. Hey, Fire Nation, a huge thank you to our sponsors and Brigham for sponsoring today's episode and Fire Nation. Over the last decade, I've interviewed more than 3 ,000 of the world's most successful entrepreneurs and I've created a revolutionary 17-step roadmap to your financial freedom and fulfillment. I put it all into my first traditionally published book, The Common Path to Uncommon Success, personally endorsed by Seth Godin and Gary Vaynerchuk. The Common Path to Uncommon Success is the step-by-step guidance that you need to achieve the lifestyle of your dreams.

23:02Visit UncommonSuccessBook.com to order your copy, and I'll catch you there or on the flip side. Success Story, hosted by Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business startups, and entrepreneurship. One of Scott's recent episodes was with none other than Jack Canfield, where they discuss adapting to life's twists and turns. Listen to Success Story wherever you get your podcasts. NetSuite is the number one cloud financial system giving you visibility and control to make better decisions faster.

23:41Right now, you can defer payments of a full NetSuite implementation for six months. Take advantage of this unprecedented special financing offer at netsuite.com slash fire.