The Ins and Outs of Franchising with Sport Clips' Pete Lindsey

Sport Clips* Vice President of Franchising Pete Lindsey knows both sides of the franchise world as a franchisee and a franchisor representative.

Lindsey, a former franchisee of Mail Boxes Etc., joined the operations department of the company in 1991 before contributing to one of the largest franchise brand changes in history when UPS bought Mail Boxes Etc. and rebranded to The UPS Store. For close to 20 years, Lindsey’s career in franchise development prospered and led him to the title of National Development Manager. In 2011, Lindsey made the decision to join the Sport Clips family and oversee the franchising division of the brand as vice president of franchising.

“I saw the direction Sport Clips was heading and wanted to be a part of it,” said Lindsey. “I respect what Gordon Logan is doing with the brand and am ecstatic to be a part of a family run organization.”

With his extensive knowledge as a franchisee and vice president, what would he look for if he decided to become a franchisee again?

“I would be sure to assess the quality of life with any brand,” said Lindsey. “As a potential business owner I would want to ensure the brand’s goals matched up with my personal goals and I was able to achieve my and my family’s objectives.”

Look into how many existing franchisees are buying licenses
“Potential franchisees should always see if there is a hunger for the existing franchisees to expand,” explained Lindsey.

Review Item 20
“The entire FDD is significant but in hindsight if I were becoming a franchisee again I would not ignore Item 20,” said Lindsey.

‘Item 20 in the Franchise Discloser Document includes five tables that provide the number of franchises which are opened, transferred, renewed and terminated over the last three years and allows you to see if the system is growing or decreasing. It also shows how aggressive the franchisor is about non-renewals and terminations. If this is a high number, you need to know how they approach non-renewals and terminations very specifically.”

The Transfer Rate
“If a brand has an 8-10 percent transfer rate, it could be a concern. Again, try to identify if existing owners are purchasing these transfers or if outside parties are buying them. If this is a high number, find out why franchisees are leaving the system.”

Company Store Operations
“Company Stores can be a great source of financial information. It should help you with your understanding of the item 19 as more information can be shared regarding return on investment. It can also help get a good idea of franchisee financial performance. Further, with Company Stores, the franchisor should have a much better idea of the franchisee experience. This also enables the franchisor to test ideas, products and services in a controlled environment prior to rolling them out to the system. This can be a very big benefit.