Ep 42: Salon Republic

Welcome back to Retail Intel with your host, Brian Sheehan! Salon Republic is completely transforming and elevating the studio scene for today’s beauty professionals!✨Founded by Eric Taylor, Salon Republic's community of like-minded independent beauty professionals share their unique talents, creating an environment full of inspiration!

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Brian Sheehan 0:00

Hey. Well, welcome to Retail Intel, the podcast where we dive deep into the dynamic world of commercial real estate. I'm your host, Brian Sheehan, and I'm thrilled to be your guide on this journey through the bustling streets of retail, the aisles of shopping centers, and the world of commercial property investment. With me today is Eric Taylor, founder and CEO of Salon Republic. Eric is also host of the Hair Game podcast and chair of the Professional Beauty Federation of California. If you're not familiar with Salon public is a complete rethinking of the ideal working environment for today's beauty professionals. Not just a salon, but a one-of-a-kind experience curated by each beauty pro. I'm excited to learn more. Eric, welcome.

Eric Taylor 0:49

Thank you. Thanks for having me.

Brian Sheehan 0:52

So how have you been? How's business?

Eric Taylor 0:54

Well, I've been great. I'm in California right now. We're having one of those quote unquote atmospheric rivers. So things are flooding and some people are enjoying it. Some people aren't. My office actually, since this is a real estate podcast, those listeners might enjoy or not enjoy hearing about the flooding of my office. So as we speak, my feet are on some wet carpet.

Brian Sheehan 1:21

Oh, wow. It looks sunny. But you're near a window, I think, and I wouldn't have guessed you're flooded out there.

Eric Taylor 1:29

Yeah, but that's okay. Life moves on.

Brian Sheehan 1:33

Well, I'd love to start with your background. So you founded Salon Republic close to, what, 25 years ago? Yeah, I started it. What were you doing prior to founding? Sure. So I

Eric Taylor 1:45

went to college. I went to Pepperdine. I studied finance in college. I went to Pepperdine to play baseball, and my baseball career got truncated by an injury. So then I had to get real about life, and I figured finance was a good thing to learn. And so that's what I did. And right before graduating, I was kind of struggling to think of a good way to spend my time after I graduated. This was in the late 90s. And for those listeners who are old enough, they remember that this was the dot-com craze. And so I had a lot of friends going into investment banking. I had a lot of friends who were doing the dot-com thing. Some guys were going into incubators, if the listeners remember those things, right? You hire a bunch of supposedly really smart people, you pay them a lot of money, you throw them in a really fancy office, and then they're just supposed to magically come up with some really good business ideas.

Brian Sheehan 2:44

Great business idea, yeah.

Eric Taylor 2:46

Right? And the global crossing, you know, those days. So a lot of my friends were doing that and I thought, boy, this is interesting, but I wanted to do something more entrepreneurial. My dad was in the real estate business. His dad was in the construction and real estate business in New York City. And I thought, okay, so I've learned quite a bit about that because his office was in our house as I was growing up. I kind of saw him renting out his industrial real estate mostly, his warehouse space. And growing up, my brother and I were sent around to the tenants during the holidays, and we would give away turkeys to the tenants. That's kind of old school. Landlords don't do that kind of stuff anymore. So I was raised in that kind of traditional real estate environment. And then on the other side of the coin was my mother, who was a professional oil painter. She had her studio in the house, and she was actually rather successful as an oil painter And what was interesting about growing up and watching her become a successful artist was she had to temper her creativity with the reality of having to sell something to somebody who was willing to pay for it. So she couldn't go off into these wild creative tangents. If she wanted to sell something, she needed to balance that creativity with what people actually wanted to buy. And so I watched her do this, and she ended up having quite a career and painted many famous people. She did portraiture as well as landscape art and sold art to very wealthy people and painted some famous athletes. Emmett Smith, she painted Jim Brown. She painted the Supreme Court Justice Warren Burger before he passed. She painted the King of Mongolia. So she had created this great career with where so few artists are able to do it. And so there are so many lessons in growing up in a household where you had these two influences. So I wanted to be an entrepreneur as well. And so as I was approaching graduation at school, I thought to myself, my time is never going to be less valuable than now. Whatever path I choose, I'm going to get experience and I'm going to all of a sudden start having expectations of what I should be getting paid And so now is the time, upon graduating from college, to try things. And so I was very interested in unconsolidated industries. I looked at car washes. I looked at dry cleaners. I looked at beauty services, hair salons, because these are industries that are everywhere, yet... very few companies actually had very much of the market. And to me, that meant opportunity for somebody who knew as little as I knew coming out of college. And I didn't have a lot of money. As much as I'm saying that my parents were successful, middle class. We were able to have a nice house. We belonged to a middle of the road country club. So not rich, but they did well enough to provide a comfortable life for my brother and I. Certainly not enough to really backstop a bunch of ideas that their kids might have. So long story short, I looked at these various industries and I was finding the salon industry to be one that combined the artistry of my mother with the kind of pragmatic, necessary sort of business of real estate. And, you know, people have to get their hair cut. Most people, Brian, I don't want to insult you, but I'm looking through

Brian Sheehan 6:35

the

Eric Taylor 6:36

computer screen and I don't see a lot to cut. But in the hair industry, we like to say it's what we leave on. It's not what we take off. So I thought, you know, everybody's got to get their hair cut. And, you know, women love to get their hair colored. And it just seems like such a resilient business. I I think I'm going to put some effort into this. So when I graduated from Pepperdine in Malibu, California, I moved back to Texas, which is, I'm from Dallas, and I had a girlfriend there. And her hairstylist moved to one of the first studio-based salons that had ever been created. Nowadays, some people call this the salon suites industry. I like to call them studio-based salons. What I eventually ended up doing, what Salon Republic now is quite a bit different than a lot of the franchises like Sola and Phoenix, and we'll get into that a little bit. But her hairstylist moved to one of the first studio-based salons, and she got home and called me on the landline, because she was living with her parents as well at the time, and she said, you've got to check this place out. And it was five minutes from my parents' house, and I jumped in the car, drove down the street, walked in, and it made immediate sense to me. That salon was 10,000 square feet. The salon is still there in fact and we're going back 26 years okay if anything there's going to be a recurring theme in this conversation that is the resilience of this business that salon is still there it's about 10,000 square feet it's got about 60 studios in it and I initially walked in all those years ago and it made immediate sense to me it was the perfect combination of the environment in which I was raised between my mom and my dad the founder of the concept his name was Keith He was there. in the salon that day. And he approached me and asked if I needed help. And I said initially, I'm looking to get a haircut. I lied to him. I said, I'm here to get a haircut. And that led to him walking me around the salon and kind of telling me about the salon. And as we were walking, I saw a bunch of happy beauty professionals that had their own spaces. They had their own studios and they're working happily with their clients. And I could see that some had their doors closed and had privacy and Some had their doors open and they could be kind of part of the greater thing of what was happening there in the salon. And people kind of had control over their environment. And so I said to Keith, I said, you know, to be honest with you, I did not come in here to get my haircut. I just graduated from college and my girlfriend's hairdresser works here and she told me about it and it sounded amazing. So I wanted to come see it for myself. And I think it's really spectacular what you're doing here. And would you mind if I kind of hang around? You don't have to pay me. I can... you know I'll Give me things to do. I'll take out the trash. I don't know much about things, but I'd like to learn. And so I worked for him for free for about a year. And he was my mentor. And I learned what beauty professionals, how they work. I learned what they like. I learned what they need to be successful. I learned that the clients love the privacy that they get with their beauty professional and the ups and downs of the business. And then after about a year, I dumped the girlfriend and I moved back out to California where there were no such salons. And in 2000, I opened the first Salon Republic, which was in Studio City, California.

Brian Sheehan 10:09

That's incredible. I'll be honest, the first time I walked into a studio-based salon, it was a little lost on me. I was confused. You know, I went with my mom. This was probably, like you said, 20, 25 years ago. And I didn't understand if it was all one business or different businesses. And so I guess for somebody that's unfamiliar with it, how do you explain a studio-based salon to someone?

Eric Taylor 10:35

Well, I essentially say that we take a large space between about 8,000 and 25,000 square feet. And well, frankly, it depends who I'm talking to. If I'm talking to a real estate guy, I would say I subdivide the space into individual studios that we then rent to independent beauty professionals. And then we maintain the facility, we layer in certain amenities, and that's the essence of that version of the description. If I'm talking to, let's say, one of my wife's girlfriends, I'm like, we have a salon where everybody has their own space, where everybody has their own studio, and they work independently in there. Typically, that's good enough to do the job, but I've found that after all these years, unless somebody actually walks in, they don't quite get it.

Brian Sheehan 11:28

Yeah, you really do have to go in to understand that And you explaining your background makes perfect sense then how you kind of got here, which is that combination of art and science and real estate. And so I get that a little bit. But what is it that kind of drives you in this industry, this business? You kind of have a passion and a talent for it. Got gray hair, you know. So, I mean, it kind of makes sense. But like, what do you love about studio based salons?

Eric Taylor 12:00

Yeah. So, you know, what's interesting about that question is I'm not sure that I had, I'm not sure I even recognized the answer until a number of years after I started the business. But the answer is just so obvious. And it really is the fact that I grew up in an entrepreneurial environment with each of my parents doing their own thing, eating what they kill, right? And that was a lot of my explanation of my mom's situation. You know, she needed to make money and she had to balance things out, the art and the pragmatism of making something commercially viable. And that to me, I just loved it. It seemed, frankly, starting a business, running a business, I mean, it is so much part of my DNA. I almost feel like every individual needs to do it. There's so much that can be learned from it. You know, human nature, you learn about yourself. It gives you a sense of ownership. It gives you a sense of accountability, responsibility, pushes you outside of your comfort zone. You know, you need to do things that you never thought you could do before. And so that That really is something that I just value so greatly. And so, like I mentioned, it was a number of years later that I realized that's one of the things I like about doing this so much is that I'm giving beauty professionals the opportunity to be entrepreneurs. They don't have to work in somebody else's world. What most traditional salons are, is somebody who started a salon and they put, let's say, 10 chairs in the salon and they paint the walls the color they want. They choose the furniture that they want. The owner puts the music on that they want and they have the temperature of the air that they like and they hire the person for the front and they create the culture and they decide the hours in which the people who work there should be able to work. They decide what products are going to be used in the salon. So most beauty professionals who work in a salon like that, which is the traditional type of salon, they're working in someone else's world. And these are creative people. And so I've always believed that creative people especially work best when they're able to decide how they work, when they work, what they wear to work, the type of clients that they want to interact with every day, the type of hairstyle, the type of hair services that they're doing. If they want to do super creative, quirky styles that are on the cutting edge of things and they want to be around those types of clients, then in our environment, they can do that. That's not the case when you're working in a traditional salon. So I felt like I was giving people the opportunity to do what I value so much, which is having kind of that entrepreneurial spirit.

Brian Sheehan 15:07

I guess that kind of leads me into my next question. I'm a real estate guy. I love real estate. I love doing deals. I love learning about concepts. We own and operate shopping centers. And the salon-based... studio-based salon business seems to do well in our environment. My sense is it's a pretty competitive space. There's other operators out there. You guys seem like best in class, really. But I guess I'm curious to hear you talk a little bit about the competition in the space, but more specifically around what makes Salon Republic unique. And really, what is it about your business and the model that makes it so resilient?

Eric Taylor 15:50

Sure. So as far as the differentiation and the type of studio salon that I've always believed in and that we've eventually been able to develop across the chain. First off, I believe in a company-owned chain. You know, the franchise model is one that allows people to expand really fast, but I've always believed that the quality of the salon is simply an aggregation of all of the people working in the salon. And it's hard to control the quality of the salon if you're going to focus on selling franchises to franchisees. A lot of the proposition that the franchises in this industry propose to franchisees is what they call a semi-absentee business model. They essentially say to, let's say, somebody who's saved $750,000 and they don't want to put it in the stock market, they say, okay, well, you can put up this location and you can clip coupons and you can spend the rest of the time on the golf course or you you know, fishing, and it's semi-absentee. You don't really have to put much effort into it. And certainly, in all the years that I've been doing this, I've seen a lot of the franchise units, a lot of the franchise salons out there, operate in just that way, where the owner isn't there very often. And if, let's say, a light bulb goes out in a hairstylist's studio on a Saturday, where she's going to make the majority of her income for the week, there's nobody there to change that light bulb. And it's important to have that kind of support to make that environment a really, really good one for the beauty professional. So I've always believed in having the control over the unit. So we are 100% corporate owned. Another thing that we do is we take a much larger footprint than our competitors do. They tend to average around 5,000 square feet, and then they build a box that has minimum hallway widths, and then they cram as many studios as possible into that footprint. We take, I would say average, our average square footage is about 16,000 square feet, and we have wider hallways than everybody else. We put a lot of nice furniture in the hallways. We put a tremendous amount of effort into interior design. The place needs to look like, I want it to look like the nicest salon that they've walked into. And one of the things that is so great about having that larger footprint is a host of things. Number one, we have a much larger presence on the street. Okay. It's a substantive looking facility from the street. Number two, it allows us to layer in amenities such as full-time managers. So we have full-time people in the front of the salon and very nice reception area, marble desk, you know, very nice. Everything looks as good as we can possibly make it. And there's a human when you walk in and the human greets you and helps the client find the beauty professional, helps the beauty professional with some issues that they're having you know this is a very human business and so to not have a human on site presents a lot of problems so we believe is very very important to have that support of the manager at the front it also allows us to have a beauty supply at the front of our location so we carry about 80 of the most popular products in the beauty industry and we have them available at wholesale pricing to our beauty professionals no one else does that and one of the reasons why nobody else does it is because nobody has 140 i mean we have our beverly hills location has about 200 beauty professionals in the facility so that is a critical mass of beauty pros who need to be supplied with professional product. And so we've developed the relationships with the brands and we're able to carry all those products. And so that's a tremendous convenience to a hairstylist to walk down the hall and to buy at the best prices, the color that they need for the last minute client that may have just booked and needs a Redken 6N to do that, let's say that color for our client coming in. So we've been doing that for probably seven or eight years. We're still very excited about that. And our beauty professionals love that kind of convenience. And then the last thing that we do that nobody else does is towel service. We offer free unlimited towels, complimentary unlimited towels to everybody there in the facility. And for the real estate people listening, that sounds like maybe not that big of a deal. But if you're a hairstylist and you've got seven clients on a particular day and you use, let's say, three towels per client, at the end of the day, the typical independent hairstylist needs to take that bag of towels and they need to wash them. And oftentimes they're washing them in the salon. So how long does a load of wash take? You know, it takes an hour, hour and 20 minutes. Who wants to hang around for an hour and 20 minutes at the end of their very busy day? You want to go home. So we provide towels for everyone. And it is a tremendous cost because... I like to say there's got to be a landfill somewhere with about a million of my black towels in it because these things just disappear. I don't know where they go. They just incinerate into the atmosphere somewhere. But we continue to buy towels, and we have them there on site for all of our beauty professionals to use, and nobody else does that. So we differentiate ourselves with those things, and we've been able to attract the most successful beauty professionals anywhere in all the markets that we operate in. One of the early beauty professionals that we got, his name is Guy Tan. and Guy Tain became the most high-profile hairstylist in the world through social media and his kind of entertaining antics on YouTube and Instagram. And so Guy was with us for many, many years before he developed his own brand, and now he's not behind the chair anymore. But we have a lot of very, very high-profile hairstylists. We have L'Oreal's number one educator worldwide, works in our location, and many, many other top-quality beauty professional. So we care a great deal about that.

Brian Sheehan 22:43

I kind of chuckled for a minute thinking about the three towels per day. I have a 13 year old daughter who, you know, seems to go through a lot of towels. So I guess I have some sense of what kind of impact that potentially has on a salon business. But I'm curious for those high profile professionals who've been with you in the past and the ones that are with you now, do you survey them? Have you found any It was really the towel service was kind of the big thing that really, you know, clinched the deal for them. There are other things about it that really speak to them.

Eric Taylor 23:20

Yeah, we do occasional surveys to test the pulse. But most of the information that we get is just in those one-on-one conversations since we have people on site and we get to know the people and we develop that community. We get to know the beauty pros who work in our salons. And frankly, it's very subjective. I mean, towel service is everybody pretty much who uses towels loves the towel service. But sometimes Some people might prioritize the fact that they can just walk down the hall and buy the professional products in the onesies, twosies quantities whenever they need it. Some people like that more. Some people like the fact that there's a large community of other beauty professionals who are working independently but yet provide a a community that most people like so it's it's very very subjective

Brian Sheehan 24:18

it sounds like this incredible ecosystem that happens within the walls of the space and i guess i wasn't aware of the beauty supply aspect to that and it makes me want to ask more about how that virtuous cycle impacts the other spaces, the entire center? You know, from a landlord's perspective, what is it about Salon Republic that makes this a really desirable use?

Eric Taylor 24:48

Sure. So I would say there's a few answers to that question. Number one, highly resilient tenant. So we have 25 salons right now. We'll have 31 by the middle of 2024. We've been doing this for almost 24 years, and we've only closed one salon. And the only reason we closed is because the landlord practically forced us out because they wanted to repurpose the building. So we've never closed a salon on our own because... the business struggle. That is just so rare in this industry. And that includes, of course, the Great Recession. We sailed through the Great Recession just fine. So extremely resilient business model. One of the other things that landlords love about us is the quality of person, the quality of demographic that we bring to a shopping center. You know, our goal when we open a salon is to attract the best beauty professionals in the market. You know, we're not cheap to work in. So the hairstylists who come to work at Salon Republic, they're successful hairstylists and they have well-heeled clients. You know, they have high-income demographic clients. And these are people who, you know, depending on the market, it's It's somewhere between, let's call it 60 and 80% female clients who come to the salon and they spend a while in the salon and they patronize the other tenants in the salon. They eat there. They're going to shop next door. And these are the exact type of people that 99% of landlords want to come to the center. And that customer is coming because they're hairstylist went there. Okay, so the landlord doesn't have to do anything to get this high income demographic to come to the shopping center except for put Salon Republic there because we are a destination for this type of demographic. So we have gone into more than one struggling shopping center and within a year, the shopping center has completely turned around. And by the way, because we're a destination, we can take the worst spaces in the shopping center. We can take the elbow of the shopping center. We can take the second floor that's been vacant for seven years. We love that because the hairstylist is going to go where the salon is and the client is going to go where the salon is. We do not need to be on that outlot out by the street on the hard corner. So that's That's the other thing. And then the third thing I would say that landlords love about us, and I never really thought about this until one of the landlords said it, maybe 10 years ago, they said, one of the things we love about you guys is that you aggregate personal care services under one tenant. So instead of having a nail salon and 900 square feet that's owned by a manicurist who's never opened a nail salon before, has never read a lease before, is relatively not creditworthy, relatively unsophisticated, and frankly, difficult to deal with. And then a little salon over there, and then a little waxing place over here, and then maybe there's seven little places and a shopping center, and the landlord has to deal with each of them. You know, they deal with us. And, you know, we've gotten to the point now where we're somewhat sophisticated. We have about 75 employees. We're creditworthy, the national creditworthy. We've got a facilities group. So when there's a leak in the facility, we We get in there and we fix it in a professional manner. When it comes to interacting with the landlord, we have a real estate group here in the office right behind me. And there are professionals at it. And they respond quickly and they take care of things and they understand the relationship between landlord and tenant. And so I thought that was kind of interesting when I first heard that.

Brian Sheehan 29:02

Oh, it's fascinating on so many levels. I don't often think about your business as you being a landlord per se, and the business of operating real estate is so far removed sometimes from the business of what goes on inside a retail or restaurant space. So you really have to have a passion for it. You have to have the team that's that can support it. It sounds like you do. How many locations did you say that you have open?

Eric Taylor 29:29

We have 25 open and we're opening six in the next five months, if I'm doing the math right, I think. So it'd be 30, 32. Yeah, I think we'll be at 31 by the middle of 2024.

Brian Sheehan 29:45

And then how about for next year? How many do you think you'll open in 2025?

Eric Taylor 29:50

So next year, our goal is for 10 locations. And we're looking at acquiring some other salons around, typically some people who've gotten into the business and they don't like it very much, or they're not doing a very good job taking care of the hairstylists. And so we're looking at acquiring them as well. So that's the goal.

Brian Sheehan 30:12

smaller footprint salons? You're looking at those 5,000, 6,000 square foot operators and want to grow those?

Eric Taylor 30:19

Nope. Typically it's larger or if it's a smaller one with an opportunity to expand it, we really like the larger footprints. I think we're right at the moment, we're looking at 8,000 up into the mid 20,000 neighborhood. Our largest location is about 26,000 square feet.

Brian Sheehan 30:40

I never think about yours being kind of a one-stop shop in the wellness, health, beauty space and how that dynamic kind of plays out in the center. Who do you like to be around then when you're looking at potential future opportunity sites?

Eric Taylor 31:00

You know, frankly, we don't really care that much as long as... I know landlords don't hear that very often, but... We don't really. We don't really care that much unless the center has kind of positioned itself in a very kind of discount outlet type of situation. Because we attract the high quality beauty professionals who want to be able to charge... on the upper end of the market for beauty professionals. To be next to a 99-cent store is not the best for us. But otherwise, we don't really care.

Brian Sheehan 31:41

Where do you want Salon Republic to be in five years? If I interview you again in that time frame, how many will you have open? What's changed, if anything? I

Eric Taylor 31:53

hope that we have continued to refine the type of salon that we build. I hope that we've continued to maintain the sense of community within each location and across locations. On that note, we throw a holiday party annually that's become quite a thing. This last holiday party we had a month and a half ago and at the end in December of 2023, we had about 2,000 people and a large kind of nightclub facility in Hollywood and with pumping music and a lot of the beauty brands show up and people like to have fun with each other and meet new people and we love that community. So hopefully we continue to maintain that sense of being a part of something and in terms of our footprint You know, hopefully we continue to grow at a 10 plus pace per year. Um, if we can grow it more than that while maintaining the quality and the community, then, then that, that would be a welcome surprise.

Brian Sheehan 32:57

That's awesome. I mean, these are not small projects, so if you can take on that kind of pipeline, I mean, that's just really incredible.

Eric Taylor 33:04

Yeah. I mean, we have an in-house construction group that works under our, our real estate team and, um, These guys have worked at very large publicly traded companies, rolled out dozens of units per year. They've already done this before. And so I've tried to build a team with a tremendous amount of experience so we don't trip ourselves up.

Brian Sheehan 33:30

How often are you looking at centers that you want to acquire and turn around?

Eric Taylor 33:35

Oh, well, I mean, in the 24 years I've found... many, many pieces of real estate that I would love to acquire and buy. Typically, historically, it hasn't made a lot of sense. I did buy one, which was a freestanding unit, 12,000 square feet in Colorado. I bought that location. This was right after the subprime washout, 2010, and I bought it directly from the bank who had repossessed the building. We still have that salon. It's owned real estate but in most of the most of the environments in which we operate you know Southern California Texas Washington State Colorado it doesn't make a lot of sense for us to buy the real estate

Brian Sheehan 34:26

I can believe that you know this has been really awesome I had just a couple other questions here one Specific to the business, you had mentioned, we talked before about the run rate. And what is that? Why is it important to your business?

Eric Taylor 34:43

So run rate in terms of us finding beauty professionals for it? Yeah, I think

Brian Sheehan 34:49

it was about the turnover that happens in the industry sort of generally. And your business is buffered from that because you experience a much lower rate of turnover. turnover, I guess.

Eric Taylor 35:03

Right. So the way that we look at this, if you look across the economy at employees in general, workers in general, typical turnover of an employee is about a third Which makes sense. You look around your office and life expectancy is about three years or so. And so that's kind of industry-wide. And then you look at my industry in particular and I think the the number which by the way is nobody has a good number on this because my industry is so highly fragmented and there's there's no data compilation company whose will ever be able to to get this kind of accurate data but most people figure it's about the same so a salon will turn over about a third of its people every year. The turnover within Salon Republic is in the teens. So we're about half of what the average turnover is. And I think that's just a result of the fact that the beauty professionals are able to build the type of work environment that they want. If they want to make a change in their environment, they Let's say they're tired of a certain kind of furniture that they have in there or they're tired of that really loud paint color on the walls because maybe their life has changed a little bit. They can change it. They don't have to find another salon to work in. So the flexibility and the freedom and that independence allows them just a lot of opportunities.

Brian Sheehan 36:44

I mean, it's a real testament to the success. Maybe it's a driver of the success in your business, but I just found that to be incredible. There's that kind of delta between sort of what the industry experiences and what Salon Republic experiences. My last question for you, as a landlord, what do you like, what do you need from your landlord partners for Salon Republic to be successful? Who are some of your best landlords? Maybe not by name, but what are they doing to help you win?

Eric Taylor 37:17

Well, we have a lot of different landlords, a lot of the biggest ones that everybody knows. You know, Westfield is a landlord in multiple locations. I don't mind naming them, no reason why I can't. Westfield, we're in a number of their locations. Douglas Emmett, which is primarily an office landlord, we're in a number of their buildings as well. Great relationships with all of our landlords. There's a few that aren't popping into my head at the moment, but we like to develop relationships with landlords and continued to be sent opportunities from other properties in their portfolio. And we like to have a template lease with a particular landlord who might prioritize some things and not other things. And so it just kind of expedites the process. We like long-term leases, 10 years plus, because we go in there with a lot of our own money. And so just like a landlord is developing a property, there's a big capital expense component and that needs to be justified over time with cash flow. So we come in with a lot of our money and then otherwise we look for some economic participation in some regard. We're rather flexible in that regard. And sometimes the economic participation that we request from the landlord could be in the form of free rent. Sometimes it's in the form of TI. Every landlord is different. Some of our landlords would rather give us TI money and have us start paying a full rent right away. And as long as the economics work for us, that's fine with us. And so we've done it that way. We've come to the table with more cash and then lower rent. In the beginning, we have a pretty sophisticated modeling that we do financially and our balance sheet allows us to be pretty flexible.

Brian Sheehan 39:14

Well, Eric, it was great speaking with you today. Thank you for joining me on Retail Intel. I love learning about Salon Republic. It's just an incredible business that you've built. Be on the lookout for new Salon Republic locations opening near you and be sure to check them out on Instagram at loveerictaylor and at salonrepublic. And check out Eric's podcast, The Hair Game, wherever you find your podcasts. Whether you're an aspiring real estate mogul, a seasoned pro or simply curious about the places where we shop dine play and work this podcast is your all access pass to the world of commercial real estate connect with me on LinkedIn and if you're interested in being a part of the Retail Intel podcast send a message to nationalaccounts at phillipsedison.com if you want to hear more about new and expanding brands keep tuning in to Retail Intel and please subscribe follow like and repost Talk to you next time.