Franchise QB

Episode 88: Stephanie Knepp- CEO, Sit Still Kids Salons

• Mike Halpern • Season 1 • Episode 88

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In this episode of the Franchise QB Podcast, host Mike Halpern interviews Stephanie Knepp, CEO of Sit Still Kids Salon. They discuss Stephanie's journey into franchising, the unique business model of Sit Still, and the importance of community and customer experience in the children's hair care industry. 

Stephanie shares insights on the growth of Sit Still, the leadership structure, and the ideal profile for franchisees. The conversation highlights the significant market potential for children's haircuts and the support provided to franchise owners.

Takeaways

-Sit Still Kids Salon focuses on creating a positive experience for families.
-The children's hair care market has significant growth potential.
-Franchisees do not need to be hairstylists to succeed.
-Community engagement is crucial for franchise success.
-Sit Still offers a unique lifestyle-focused business model.
-The brand has a strong leadership team with diverse backgrounds.
-Core values center around community, quality, and joy.
-Investment costs for Sit Still range from $150,000 to $500,000.
-Ongoing support for franchisees is essential for long-term success.

Chapters

00:00 Introduction
00:50 Stephanie Knepp's Journey in Franchising
07:40 Overview of Sit Still Kids Salon
09:55 History and Growth of Sit Still Kids Salon
12:41 Leadership and Ownership Structure
14:04 Core Values and Customer Experience
16:10 Market Potential and Demand for Children's Haircuts
18:00 Ideal Franchisee Profile
19:18 Ownership Models and Support
23:49 Investment Costs and Financial Performance
26:08 Conclusion

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Contact me and my team with any questions along the way. www.calendly.com/franchiseguy
Mike Halpern, CAFC
mike@franchiseqb.com

This is the Franchise QB Podcast, where we empower entrepreneurs to win big in franchising. We huddle up weekly to educate our audience about the most successful small business model ever created, franchising. Welcome to the Franchise QB podcast. I'm your host, Mike Halpern, a 20 year industry veteran and entrepreneur. My mission is for listeners to achieve their American dreams of creating wealth and independence through franchise ownership. Every week we speak with franchisees, franchisors or vendors that support the industry. Thank you for joining us and let's get started. Joining us in the huddle today is Stephanie Knepp, CEO of Sit Still Kids Salon. Welcome to the show, Stephanie. Thank you, thanks for having me. It is great to have you. So you've been in the franchise space for almost a decade with portfolio franchisor, WellBiz brands, and a dog training franchise called Zoom Room. I'm familiar with both of those franchise concepts. Tell us a little bit about your background. How did you get started in the lifestyle and the franchising industry? Yeah, it is definitely a little bit of a story, so I'll try to keep it super short here. But lifestyle industry, I've been in for, gosh, 20, 25 years. So right out of college, I actually moved to Manhattan and I was in the luxury residential uh high-rise amenity management space. So let me break that down what that is. So in New York, when you have the luxury high-rise buildings, they normally come with a pool, a fitness center, and back then, they were usually in a dark, dingy basement. And when I had gotten out of college, went to New York and actually worked in boutique fitness, New York was pulling the amenities out from the basements and putting them on third floors, fifth floors, rooftops, whatever it is. And then adding to the pool and fitness center, they were adding demonstration kitchens, golf simulators. They're basically creating lifestyles for the residents within. the high-rise buildings. So it wasn't just aimed at fitness anymore, it was actually aimed more at a complete lifestyle where, you know, we were talking about emotional wellness and we were talking about um financial wellness, intellectual wellness, and we would actually program the building with, you know, these lifestyle concepts, programs, you know, bringing the community within each building together. And I was really just at the right place at the right time, again, starting off in boutique fitness. the company that I worked for was running all of the fitness centers. And when the building started to add in all of these lifestyle elements, you know, the CEO was like, well, we either need to figure out how to run all of this stuff or we're out of business. And so it was just, raised my hand and I was like, let's figure it out. Like, let's start, you know, developing this, you know, different operational skillset within our team. create this new brand and create this new business. And so that's how I got into the lifestyle industry, having a relationship with residents every single day, having a journey with them. So to summarize New York, basically the company that I worked for, we went from zero to 60 units with this new lifestyle component. And we actually called it Your Wellbeing. And we marketed and promoted that to all of the property management companies in New York, developers in New York, and built that up from zero to 60. uh And so that's what I did in New York, did it in LA as well. Translate that now to franchising. The reason that I kind of fit and slid into franchising is because that model in New York was very similar to franchising where I worked for a third party vendor, where it was one core concept that we were doing, your wellbeing. And then we offered it to different property management companies, developers, uh commercial buildings, residential buildings, that sort of thing. So franchising is very similar where you have this one core concept, right? And then you market it in different regions with different, you know, entrepreneurial coming in as franchisees, different budgets, different styles, that sort of thing. So it actually translated really well what I was doing in New York to franchising. But what was the key point was when I came into franchising was that I stayed within the lifestyle industry. So working with brands where you have the relationship feature still, where you're seeing them on a regular cadence, where you're developing a uh journey for them to take with you again not a once-and-done transaction but how do we go through life with them? How do we make their life better? How do we develop a relationship where we know what's going on in their lives, we know what's going on in our lives and we personalize that package up to essentially have recurring revenue. At the end of the day when you get down to the business of it, lifestyle industry is recurring revenue. That's the business model that everybody wants to go and strive for because When you do do it, you do it right. It's the easiest one. so that's super interesting to me how you were able to take, I mean, because buildings in Manhattan, New York City, it's super competitive. You have to differentiate. You have to be better and different. And especially the evolution of those amenities, as you described, and then to take that into franchising. always wonder how people get into franchising. You don't wake up and say, Hey, I want to be in the franchising industry. So you don't really natural progression from doing it. in independent businesses, scaling it up to 60 units and then taking that lifestyle work and putting it into the franchise space. Stephanie, what kind of surprised you the most about being the CEO of a franchise brand now that you're in this space? Yeah, the CEO role is definitely, the surprise here was coming from a very operations driven brain that I had for myself um in building, in New York I had some. build out that systems and program and all of that sort of thing. And then even when I first initially got into franchising, I was on the operations side of life. My role here at Sit Still is my first as the CEO and it's really taking a step back and me not being in the operations, but me now being the leader, allowing everybody else to thrive with their expertise in operations. But my role really is bringing everybody together, not just the internal team here at Sit Still Kids Support Center, but also the franchise network. and really storytelling and aligning on not just the passion, but also the business so that we can keep the passion in business and getting everybody to rally around one common goal so that we can kind of take the brand to the next level. And that's what we're doing. Awesome. So what motivates you personally in your work? What kind of gets you up and gets you excited to be the CEO of the company? Yeah, that falls back to lifestyle as well too. So I'm coming from lifestyle businesses, but what really hits my heart with franchising again is somebody gets into franchising because they want to make their life better, right? And so, you know, I kind of have it twofold here at Sit Still because at Sit Still, the Sit Still brand itself takes care of our clients and we make our clients lives better. But then tackle on and on top of that, you have franchising in general where I'm supporting people that want to be entrepreneurs. but they just need a little bit of support or they want a road map or they don't want to have to figure out everything for themselves. I can help them with their small business so that they can have the life that they want to live so that they can put their kids through college so that they can have a nice work life balance. They can dictate their schedule and just, you know, how they run their lives so that it's happy and the best that it can be. And so I get it on both sides. It's pretty cool. Yeah, that is pretty cool. So let's focus on the brand that you're the CEO of, Sit Still Kids Salon. Tell us a little bit. For those that are listening that are unfamiliar with the brand, what is Sit Still Kids and what kind of sets it apart in this space? Yeah, so Sit Still Kids Salon, as the name kind of suggests here, it's a kids salon for children. So our core service is that we provide our haircuts. And what we have to remember, again, talking about the lifestyle industry is that this is part of children's lives. children are part of a family. And so it's actually a part of the family and parents' lives as well, too. And if you do have children, you do know that haircuts can actually be a very stressful thing for a child. And so the term Sit Still, because I get asked a lot, Sit Still. It actually kind of has a negative connotation to it. Talk to me about that. And to me, Sit Still is not necessarily for the child. It's for the parent when they walk in. They get a chance to breathe. They get a chance to de-stress. We take care of everything with the child's haircut. So it's like, you know, we get them situated. We get them actually through the service. We get them checked out. You know, mom or dad has the ability to have a beverage. We offer beverages during our experiences there. We do have a retail boutique offering that they can do some shopping or mom or dad can open up the laptop and get some work done. We do have a seating area in the salons. So it's just it's a really um You know, great experience for families to come in and get a haircut that is actually part of a lifestyle. We're making children confident. We are giving them an outlet to express themselves. All of this goes into, again, this having the best life and living the best life. And we are doing that for so many communities across the country right now. Yeah, very cool. Well, I have two boys. They're now 17 and 18. So I have one about to go to college and one about to be a senior in high school. And I remember those days well. But even now, my 17 year old came up to my wife and I yesterday debating if he should get rid of his goatee or not. He's like asking us advice. So it's still a big decision. You got to get it right. It's a family thing. When school is looming. So what's it still the first location open about 20 years ago. So it's got a long track record of operational history. Give us a little bit of history about the brand and then when did it convert into a franchise. Yeah, so our founder knew she started Sit Still in the Portland area back in 2007. And she was a mom herself and she had twin little girls and she was trying to figure out what to do to get their hair cut because there was no great option for her. especially with twins, mean, she had double the kind of situation that a single parent does with one child. And so she was doing a basically a problem solve for herself and for all of the moms in her community when she opened up the first Sit Still location and Haircuts are a necessity. And so I mean it took off. It's one of those things where even right now uh In children's hair care, there's only one children's hair salon for every 92,000 children So not only from a passion play. Is this a really cool brand and really cool? uh business model but The need is there that we can actually be, like, Sit Still can be in every community across every state, across the country. um This thing, it can work anywhere and everywhere and it's recession proof because again, everybody needs a haircut. is a necessity business as part of a lifestyle. It's not an add-on or a wish or a want or anything like that. And so she harnessed that and that's why she became so successful with one unit. And then in 2018, she was introduced to who is the other side of the ownership team. We actually have a leadership group of four owners. And so they all got together in 2018. And again, just seeing the great success that this is great for the passion play, it's great for the business model. We need to get this everywhere. Let's franchise this baby. And so that launched in 2018 with the four owners. and bring us to today because then of course we had to get through COVID and all of that kind of good stuff. But hey, we survived through COVID again because we were a necessity brand. And so we made it through COVID, started revitalizing the business in 2022. We have over 70 licenses sold, hence why I got brought in now because we need to get all of these locations open to the next level, get to 100 locations, 200 locations. And so that kind of gets us where we are today. But yeah, it started with one salon in the Portland market back in 2007. Wow, that's awesome. So you mentioned there's four owners. Can you touch a little bit more on either the ownership or the leadership team when a new franchisee joins to kind of get a feel for who's behind the system? Yeah. So like I mentioned, Nhu Vo is our founder and she is still heavily involved in the brand and in the passion play of it. The other owners, one of them actually is an existing franchisee with us as well too. So again, passion for the brand and then just wanted to go all in on the brand itself, not just a single salon. So she's the uh franchisee for us in Austin, Texas at our Lakeland location. And then our two other owners, Amy and Caroline, they came in, their background actually was in Barre3. So a really, uh another well-known franchise concept. And so they had built out the Barre3 concept And when they had met Nhu and saw the Sit Still, they were like, oh my gosh, we have to do the exact same thing for Sit Still. So we have some franchisee experience on the leadership team. We have the founder with her initial passion all the way back in 2007. And then just the loyalty and the want to actually be a part of the brand in a bigger way coming from one franchisee that bought into the brand as a franchisee, but then wanted to actually be an even bigger part of the whole thing. Yeah, and it sounds like a really well-rounded team. So thanks for giving us some context. So, I mean, you're dealing with kids, you're dealing with families, people's haircuts are really important to them. Tell us about how that leads into the core values that you have at Sit Still Kids. Yeah, so, you know, we have several core values. The main ones, you know, all focus on community, quality, and joy. um And so, you know, I don't know, you know... uh about how your thoughts and feelings on this, but like it's really hard right now to find a really great experience at some businesses and that sort of thing. And a lot of businesses right now are understaffed, maybe don't have a budget to run the things that the way that they do. And so just experience in general, people are looking for that great experience. And so first and foremost, here at Sit Still, we do everything according to our core values. That is the heart of what we do. And it goes into the training of our team members as well. So, you know, making sure that, you know, they're coming in, yes, to get a paycheck, but making sure that they want to be a part of the lifestyle industry, actually knowing what it means to be a part of Sit Still, where we make everybody's lives. better. Like, you know, you're waking up not to work for your paycheck today. You're waking up because you know that you're going to be seeing some people from the community that their lives are going to be changed by coming into Sit Still today. Their lives are going to be made for the better. And so everything that we do here, I am really proud to say does, you know, focus and center on our core values. And it trickles down all the way down to the stylist level. Before this call, you know, with hopping on the podcast here, I was on with our Mason, Ohio team that just opened a couple of weeks ago and the stylists were so engaged, so all in talking to them about how they're not just a hairstylist, they are a lifestyle expert. So it's like really taking that to the next level. I'm seeing that at the salon level and as we all know with my passion for lifestyle, that just makes my heart so happy. So that's what we're doing here. That's awesome. We appreciate that. So let's talk about if someone's looking at this space, like how big is the industry? Everyone gets their hair cut, so it's gotta be a massive industry. And then your subsegment focusing on children's haircuts, what does that look like? Definitely the hair care industry in its entirety is like a 50 plus billion dollar market, right? So it's like it's huge and children is just a sliver of that. But just looking at children. There is only one hair salon for every 92,000 children right now. And so that's why the opportunity to get in with Sit Still right now is so great because we have a lot of white space on the market, but not for long. And so it's like, we can definitely launch and ramp these businesses very quickly because the need is there. A really cool quick story I'll tell about, you know, why I signed up for Sit Still. um you know as kind of you know I wanted to latch on to this thing is because Sit Still last year was already successful and you know the need for a Sit Still we could you know tell because the majority of our salons last year were actually not doing any marketing they had no leadership in the salon to actually drive performance and drive visits and a lot of our salons only had two to three stylists working in them but yet we were still successful as a brand. were still growing as a brand, attracting additional franchisees because the need is so great. So it's like we actually didn't have to do any marketing to get us where we are today because people found us because they needed us. this year, um starting in January, we did kind of change the mindset of our franchise network where it's like we're not just operating these salons now. Now we want to drive them. Now we want to proactively alert the communities that were here. And in doing so now our business has skyrocketed because you marketing for ourselves, having leadership in the salons every day to drive performance and then hiring more stylists because we have more people coming in the door. You know, now this is definitely being seen more as a business venture, not necessarily just the passion play anymore. And so, you know, that's the success for Sit Still is all up into the right after this point here. Yeah. So, I mean, you it's a needs based service. There's a ton of demand for a lot of white space for your franchise offering. Cause we're at. 60 licenses. who are you looking for? Like what kind of person makes a great Sit Still franchise owner? The best franchisees, know, that really do make a difference in their communities, you know, they don't need to, especially for Sit Still, they don't have to be the hairstylist themselves. We actually do have a couple of franchisees in our system that are stylists and that's awesome and that's great, but it's not a necessity. The necessity comes in just being, you know, business, having a business mindset, you know, being super focused on wanting to drive the business, which in that term, you know, means basically community engagement. So being out in your community, generating brand awareness, and then inside your salon, just making sure as a leader that you just have a really great positive culture so that your team members, so that your stylists um ultimately... you know, get in there, love what they're doing. They give a great experience to clients and then they refer out for other stylists to come join in because you're going to be growing as a business. And so you're going to need more stylists. And so as you, as long as you keep that going, um, you know, you are a successful franchisee with us. Yeah. So good community connector. Um, someone that can really build a great culture and be a leader in their unit seems to make a really good owner for you. So let's talk about ownership style. Do you allow. both the owner operator that's in the shop as well as a part-time kind of manager operated model? We do. We can definitely run these things as I call them owner operator kind of led. And then those that are more passive that don't want to actually be in the day to day, they hire managers. So a dedicated manager to actually run the salon for them. And the profitability out of Sit Still is very vast because we had touched upon it a little bit earlier. our footprint is very small. you know, our salons are, you know, about a thousand to 1200 square feet. We actually even have some salons coming in at 800 square feet. And so, you know, obviously with a small footprint like that, rent is on the lower side of life. Our payroll, we have six service stations in each of the salons. So, you know, at any one time we have six stylists running, but we're seeing three appointments per hour per stylist in that way. So when you add it all up, I mean, these things, you know, definitely can be money makers. So how are you supporting franchise owners? That's a big question that they all have. They sign up, they go through training. What are you doing to ensure their success? So we are actually, again, talking about taking the Sit Still brand to the next level. So with my background in franchising and building out systems and processes and that sort of thing, the ownership group, the four ladies that I talked about before, they were running the show. And I mean, they got 25 locations open with the four of them. And that's just absolutely fantastic. So now what we need to do, because we're going to be definitely growing at a faster rate here, opening up more locations with the same franchisees that we already have, since we have multi-unit packs sold, as well as new franchisees coming in, we just have to make everything scalable. And so we have to put in new systems and processes. And so We are right now building out learning paths. So online training modules for the four different paths that we offer within a salon. So a franchisee learning path, a manager learning path, a front desk learning path, and a stylist learning path so we can onboard employees uh as quickly and efficiently as possible. We are also building out the departments within our support center. So again, coming from the four ownership ladies running the day-to-day operations, now we have an operations department. We have a learning and development department. We just hired an amazing chief marketing officer to build our marketing department here. And so as we're growing both in the full network, ah we are also growing internally as well to developing all of these systems and processes. And it is pretty much flying an airplane as we're building it. So it's definitely fun along the way. ah But the goal is to be able to, you know, very efficiently and effectively onboard a franchisee, get them everything that they need to do to open up their salon in a 33-week timeline process and, you know, hire, recruit their team so that they can, you know, go through training and have their grand opening of their salon within a two-week period, and then actually have ongoing coaching once they open. I really think that that is a differentiator in different franchise organizations that I've been a part of. as to kind of like, okay, you know, get all this support and then you open up your salon and you still get support, but you know, is it the support that's gonna drive your business, not operate your business? And so we here at Sit Still just, know, what I'm wanting to do with what I've seen with the successful brands that I've worked for in the past is making sure that the support doesn't stop when their doors open. So giving them business coaching on capacity marketing and sales. how to drive new client visits, how to increase client retention, how do we increase client retention? Well, that's through stylist retention. Things that you don't know as a small business owner, especially you get into franchising because you want this support, and a lot of times they'll support you on how to run the business, but not how to grow the business. And so, you know, that's definitely going to be developed, you know, even more here at Sit Still as we go through the next, you know, one year, two year, three year program and process. Yeah, sounds like a lot of support that the owners get. So let's talk about item seven. How much does it cost to open a Sit Still kids? I know there's going to be a range based, you mentioned different footprints, as small as 800 feet, as big as 2000 feet. And then I'm sure you have a pretty standard equipment package. What's that range look like to get into a single salon? Yeah, so our range is on the lower end, $150,000, all the way up to almost $500,000. And the reason actually for the wide range, you can think about the regionality and just all of that. But we also offer in some of our salons an event party space. And so, you know, when you're on the higher end of life, getting closer to that $500,000 mark, those are our salons that have a separate party room because we are also very popular with birthday parties and being an event space, you know, for families to do birthday parties, celebrations, that sort of thing. And so, you you do have the ability to kind of, you know, go between that $150,000,$500,000, you know, not just with what region you pick, but then also kind of what scale or what additional services you offer, whether or not you have that extra party room or not. Okay. And do you guys offer any Item 19 guidance in the FDD or do candidates have to speak with owners to kind of have a flavor for how their financial performance will look? Yeah, so our Item 19, we pretty much break it down because our business model goes off of visits, right? And so it's like the more visits that you have, the more revenue that you have coming in. It's pretty simple. So we talk about that in our Item 19 and we showcase that by looking at hours of operation that our salons are open, because that is different for some of our salons. Some of our salons are only open five days a week. Some are open seven days a week. And so really showing the story there of capacity, right? So from a business standpoint of, know, the more capacity that you have available for clients to come in, the more money you will make. At the same time, the less capacity you have, the less clients that you have. But you're still profitable with both models and that you can definitely discuss franchisee to franchisee. But from a driving revenue perspective, it's all about visits, all about capacity. So we actually break our item 19 up in a capacity format. Awesome. And then geographically, are you guys, I know Portland is the origination, is this mostly West Coast development? Do you have locations spread throughout the country? What's kind of the current footprint in that regard in terms of Yeah, we're actually a little bit all over the place. definitely, you a larger footprint in the Portland market. That's our biggest market. It's our OG market. But I mean, are, you we, have, I'm based here in Phoenix, Arizona. I've got three locations here. We have sold a 15 pack with one location open in the Midwest, Madison, Wisconsin. We have a multi-unit franchisee in Florida. We just opened up in Georgia. We've got a cluster in Ohio. I mean, we really are all over the place. Texas. ah So it's one of these models where it doesn't matter where it goes. mean, you know, relative to the country because everyone needs the service. This has been great. Stephanie, anything else you want to add to the mix before we wrap up today? Yeah, I mean, I'll just do my little plug here if that's OK, just to see if we have anybody interested in learning more about Sit Still franchising. You know, like we talked about. We are an emerging brand. are getting into all the nooks and crannies of the country, but there are still a lot of white space. ah And so now is the time that if you do want to own your own market, you do want to get in while we are still an emerging brand. ah Now's the time. So definitely reach out, visit our website, sitstilkids.com. You'll get connected with myself and we'll talk all things uh hair care for children. Awesome. So if anyone listening. We'd like to connect with Stephanie and her team to learn more about becoming an owner with Sit Still Kids Salon. Contact me at franchiseqb.com or on X @QBFranchiseQB and I'll get you connected. Thank you, Stephanie, so much for getting in the huddle with us today. Awesome. Thank you so much. You got it. Thank you for listening to the Franchise QB podcast where you're at the helm of your future as a franchise owner. If you enjoyed the content, please rate the show and recommend it to anyone that might be interested in franchising. Make sure to visit franchiseQB.com to subscribe to my newsletter and for an actionable playbook to go from walk-on to legend in your new business. Follow us on Twitter @QBFranchiseQB and join us every week for a new episode. See you next time. Thank you for listening.