Suite Deal! Creating a home for beauty professionals

Name: Ken McAllister

Title: President, CEO

Company: Suite Management Franchising

No. of units: 194 total (169 My Salon Suite, 35 Salon Plaza)

Years in franchising: 8

Years in current position: 10

Ken McAllister is president and CEO of Suite Management Franchising (SMF), where he oversees two franchise brands: My Salon Suite and Salon Plaza. Although the company operates within the health and beauty space, “We are not a standard salon, but a salon suite where beauty professionals operate in individual suites where they are empowered to be their own boss,” he says.

With almost 200 locations in the U.S. and Canada, our franchisees operate private suites that feature amenities and services ranging from nail technicians to massage therapists, spa professionals, eyelash professionals, and skin treatment experts, among other health and beauty specialties. Despite the pandemic, the brand opened 20 new stores in 2020, and McAllister says store performance increased by 10%. 

With two decades of executive-level leadership expertise, McAllister says his management style is open 24/7. “I work for my team because they are the people who make us great. I always make myself available to them.” 

He assembles that team by hiring the right people, trusting them to do the right thing, and empowering them to make important decisions. “It’s my job to help everyone succeed and guide them from my knowledge and experiences,” he says. “At the end of every conversation, I ask everyone the same question, “What else can I do to help you?” Successful management, he says, is a function of communication and collaboration.

In the next 5 years the company is looking to continue its expansion in the U.S. and Canada. “We have experienced massive growth over the past 3 years,” says McAllister. “We are approaching 200 locations and will hit that number in early 2021. Our projections show that we will have around 500 locations by 2025.”

LEADERSHIP

What is your role as CEO? I work for everybody. It’s my job to help everyone succeed by educating and assisting them on their specific task, guiding them from my knowledge and experiences. At the end of every conversation, I ask everyone the same question, “What else can I do to help you?”

How has Covid-19 affected the way you have led your brand? We have been fortunate to be a virtual company since 2013, so we were prepared for the pandemic. Our very first hire was our unbelievable COO Stacy Eley. She had two very young children and couldn’t make the move to our headquarters in New Orleans. At that point, we made the decision to go entirely virtual. At the beginning, I remember a number of other CEOs and executives asking, “How do you run the company with everyone being virtual?” It is simple, really: hire the right people, trust them to do their job, and empower them to make important decisions. Beyond that, have a plan, process, and an accountability structure in place so everyone is on the same page. We have biweekly staff calls to review the playbook, discuss metrics and goals, and to keep everyone on track and communicating. The key to effective virtual working is ensuring that no one is operating in a silo.

Covid, specifically, is a storm. Like everyone, we had no idea what was going to happen next, especially early, and we were committed to weathering the storm. We embraced a “bear down and grind” mentality that has made us stronger as a collective whole. We are extremely proud of the fact we didn’t furlough or fire anyone. In fact, our staff grew in 2020. We planned and executed a ton of calls and webinars to prepare owners to come out stronger on the back end of the government-mandated closings. Over a period of 5 months, more than 150 My Salon Suite locations were temporarily closed, and we helped each one reopen safely. While the Covid pandemic paused our growth for a couple of months, we were still able to achieve our goals and open 50 new stores in 2020.

Describe your leadership style. Leadership starts with surrounding yourself with talented individuals. Find the right people and put them in the right seats. We help everyone define a clear vision of their goals/objectives and then we let them perform their job. Everyone is completely aware of the company “scoreboard” and what they need to do to thrive at our company.

What is your biggest leadership challenge? There are two types of challenges: larger ones that affect the entire system, and smaller ones that affect specific situations, owners, or markets. Our stores did not qualify for PPP funds because our model has no employees and we are not on the SBA Registry. So we took a different direction, educating our franchisees and helping them take advantage of what was available, such as the EIDL program. It was an all-hands-on-deck effort to help franchisees access the money and resources they needed to weather the Covid storm and set themselves up for success on reopening. We also helped the nearly 1,000 members (professionals) in the SMF family by educating and training them on the EIDL program, which gave them access to the money and support they desperately needed. We were prepared for this situation because we took similar action in 2014 after the SBA pulled funding for salon suite businesses. When it comes to hyper-local challenges, we always try to tailor our approach to each individual and their situation. We crowdsource knowledge we’ve gained from other experiences that we use to help each franchisee figure out an effective path forward.

How do you transmit your culture from your office to front-line employees? It all comes back to what I shared earlier: hire the right people, trust them to do the right thing, and empower them to make important decisions.

How can a CEO help their CMO develop and grow? It’s my job as the CEO to ask our CMO (and everyone else in our franchise family), “What can we do to help you?” The right people will take full advantage of that and develop and grow exceptionally well regardless of their title or position.

Where is the best place to prepare for leadership: an MBA school or OTJ? Both are extremely valuable. It depends on the individual. Ongoing education is imperative regardless of where it’s accessed. One thing I will add, though, is that all leaders need to be available and present. Be in the room where it happens for as many conversations as possible.

Are tough decisions best taken by one person? How do you make tough decisions? Tough decisions are handled best when the right experts are involved. I’m thankful that I have such a strong team and franchise network who can help me handle any issue that may arise. If I have the right people present, I am confident we can identify any and all underlying currents and concerns and eliminate any “he said, she said” spin. If you can do that, you are typically able to manage any situation. Communicate and collaborate. So my advice would be put everyone in the same room (or on the same Google call) to get to the root of the problem quickly and develop an effective path forward.

Do you want to be liked or respected? As you mature in your life, I think everyone realizes they want to work with people they like, and I’m no different. As CEO, you must establish a good working environment and develop strong relationships with all staff members for your culture to work. When there is an issue or conflict, there must be a level of mutual respect and earned credibility to work toward an effective resolution. So I think you need to be liked to be respected. I also believe a sense of humor matters to build and maintain relationships. Love what you do.

Advice to CEO wannabes: I think this goes back to the same basic principle: put each person in a position to succeed. You can’t just put them in the right seat, you need to be available to help them all day, every day. Simple message: “It is not what you say, it is what you do every day.” When it comes to company values, practice what you preach.

PERSONAL 

What time do you like to be at your desk? I’m always available, a mentality that helps me have the right attitude each day. My team has access to my calendar and schedule and can use that to set up meetings. Most days I don’t know what’s coming until I open my calendar; about 80% to 90% of my day is allocated to speaking with staff, franchisees, and partners who book time. 

Do you socialize with your team after work/outside the office? Like many Baby Boomers, I tend to work too damn much! But I love getting out, traveling, and entertaining with the entire network. I’m a big sports fan and believe going to games and other events with personal and professional connections is a great way to build relationships. It also helps address any negative issues as they can be addressed in a much more positive and effective way.

Last two books read: Traction and Be Nice (Or Else!). Most publications and books I read provide insights on accountability, leadership, and people/personalities.

How do you relax/balance life and work? I remember my wife telling me about 15 years ago that I didn’t have enough friends and didn’t take enough time for myself. Now it’s the opposite! Joking aside, I really do enjoy getting out with my friends to play poker and go to big sporting events—and I can’t wait to get back to doing that more.

Favorite vacation destinations: My wife Alanna and our children love to travel and we make it a point to see our kids, Marissa and Christian, as much as we can. My kids have the travel bug, too, and I think that’s awesome. We typically do three types of trips as a family: cruises, beaches, and mountains. Life is about exposing yourself to new people and new experiences. Fantastic memories help you learn!

MANAGEMENT

Describe your management style: Open 24/7. I always make myself available to help my team. I work for them because they are the people who make us great. I’m not a micromanager. I work hard with our management team to hire people with the right skill sets who fit our culture. If you do that well, you don’t have to micromanage. 

How does your management team help you lead? Our management team is phenomenal. They have embraced our culture to hire the right people, trust them to do the right thing, and empower them to make important decisions. We also have weekly calls on Fridays with the entire franchise system, and biweekly calls with our staff/department to ensure we’re constantly communicating and collaborating. 

Favorite management gurus: Do you read management books? Let’s Get Real or Not Play, Traction, and Be Nice (Or Else!) are just a few of my favorite books. I’m a big Warren Buffett fan and love his stuff. As a franchisor, it’s imperative be actively involved with the IFA. It’s not enough just to be a member, you have to attend events and build real relationships throughout the franchising community. Books give you a foundation, but you have to surround yourself with the right individuals to learn from and improve your model and system. It’s really helpful to be around other people who have gone down the same path before.

What makes you say, “Yes, now that’s why I do what I do!”? Helping others succeed—every time I see anyone in our franchise family (staff member, franchisee, members, franchise partners, etc.) succeeding.

OPERATIONS

What trends are you seeing with consumer spending habits in your stores? We are in the health and beauty industry, but not a true or standard “salon.” Customers feel safer and more comfortable in a suite environment in a one-on-one situation. Many large salon brands took a major setback last year as the salon suite businesses became more and more appealing to stylists and consumers amid the pandemic.

What are you expecting from your market in the next 12 months? Online ordering has changed the marketplace as well. In 2020, My Salon Suite launched an online platform to provide products to members and customers through our website. We had created and embraced e-commerce well ahead of the pandemic and we’re excited about what’s to come on that front in 2021 and beyond.

Are your franchisees bullish or bearish about growth and adding units? Bullish, no question. We have experienced massive growth over the past 3 years. We are approaching 200 locations and will hit that number early this year. Our projections show that we will have around 500 locations by 2025. Our model has proven to be sustainable and pandemic-resistant as we were one of the brick-and-mortar brands to expand and grow in 2020. Our stores are doing great across the entire system, our reviews are unbelievable, and franchisee validation and franchise candidate interest are surging. 

There are three important variables that allow us to project unprecedented growth in 2021: 1) our real estate-focused beauty model is very desirable, especially with the number of recent retail closures occurring; 2) construction costs are down; and 3) our store performance is off the charts (up 10% in 2020). We were able to achieve these numbers even with 60- to 90-day government-mandated closures in Q2 and Q3.

With all of these factors in mind, investors believe My Salon Suite is a safe bet with high upside and sustainability because of what we’ve done in previous years, not just in 2020. We are very proud of the fact that we’ve had never had a store closure in the system over the past decade. Moreover, many owners are coming from referrals within the system, and many current owners are upgrading and opening new stores. Our new e-commerce website will elevate our entire system for years to come.

How are political/global issues affecting the market and your brand? While the definition of “essential” remains nebulous, our members absolutely provide essential services to their customers. People need access to haircuts and beauty products in a super-safe, super-clean environment. Beyond that, customers want to be able to order the supplies they need online, and we are making that available with e-commerce and online ordering options. Covid has forced everyone to innovate and evolve, and our franchise family remains ahead of the curve. We are ready to move quickly and adapt any time a political or global issue affects our franchisees, beauty professionals, or their customers.

BOTTOM LINE

What are your long-term goals for the company, and how has the economy changed them? Neither Covid nor the economy has changed our goals. Looking ahead, I think it’s all about thanks and appreciation. I encourage all leaders to show their people love and appreciation because they deserve it. When situations become hard, you really learn more about people and their character. When you surround yourself with the right people on all levels, it creates positive outcomes. I’m extremely proud of our success, and our commitment has been rewarded by what our franchise network says about our company. SMF received one of the highest “community” ratings by Franchise Business Review and our validation systemwide continues to be off the charts. It takes a village to “raise” new owners, to set them up for success, and I know we do that extremely well.

What can we expect from your company in the next 12 to 18 months? We will exceed 250 stores by the end of 2021 and plan to exceed 300 by 2023. By 2025, our goal is to exceed 500 locations and continue to be the nation’s leading salon suite franchise.

What has been your greatest success? After more than 25 years in upper and senior management, I’m proud of what I’ve achieved. Every step along the path is the foundation for the future. However, there are so many opportunities and so much left to do. I am still relativity new to the franchising world, but I do completely understand how to empower people and grow companies. My greatest successes are when others grow and thrive. I love that I’m able to help people change their lives on multiple fronts through franchising.

Any regrets? My only regret is not starting earlier in life. My advice to the next generation is “Don’t wait. Start now, think big, and go for it.” It’s not “I want to run a company,” it’s figuring out your passion and self-awareness and getting started as soon as you can. The first step is always the hardest!