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Sola CEO Manages Fear With a Focus on Reopening


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As Christina Russell manages the impacts of the COVID-19 pandemic, the CEO of Sola Salon Studios says one of her goals "is to get through this with my entire team intact."

As waves of stay-at-home orders moved across the country, Sola Salon Studios stopped collecting rent from some 15,000 independent beauty professionals who were leasing space at one of the brand’s 500 locations. That meant its 150 franchisees, who lease (on average) 6,000-square-foot buildings and in turn rent the space to hair stylists, massage therapists, nail techs, skincare professionals and makeup artists, had no money coming in. That brought some tough conversations.

“Our franchisees, everyone recognized that this was the right thing to do, but also that it was the hard thing to do,” said Christina Russell, CEO of Denver-based Sola. “Franchisees were on board, but I won’t say that they weren’t scared.”

Sola is shouldering its share of the burden. It deferred 50 percent of royalties in March, along with all ad fees, and from April until the pandemic ends is deferring 100 percent of both.

For Russell, managing the ongoing impacts of the COVID-19 pandemic has involved also managing fear. “What is the stylist fear and how do we put that at ease? We wanted to make it very clear that if your building is closed, we are not going to charge you rent,” said Russell. “Then for franchisees, it becomes how do you negotiate that with landlords.”

Sola is providing guidance, letter templates and other resources to franchisees as they work with landlords, who for the most part, said Russell, have been understanding. “It’s not a typical scenario of a bad franchisee not paying rent,” she said. “They’re recognizing that they’re part of an ecosystem, and if they don’t do their part, that ecosystem might not come back.”

Russell is also actively involved in broader efforts by the International Franchise Association to “put some influence on landlords to provide forbearance for tenants,” and she’s looking ahead to when restrictions lift.

Forbearance doesn’t erase what’s owed, and franchisees will have to repay any missed or reduced payments in the future. “Franchisees on the back end are going to face rent debt,” said Russell. “We’re already looking ahead to what does it mean to reopen," and Sola is discussing plans with franchisees to help in this area as well.

The company is working with franchisees on cash flow management and is also providing them with training tools they can share to help stylists strengthen their business skills. A COVID-19 online resource center includes tips on marketing and communicating with clients, information on government assistance and other relief programs, plus virtual education and an “Inspiration” page to help stylists stay connected.

Stylists, said Russell, are “very much beholden to this economic event in a way that many of our franchisees, our investors are not.”

“We’re a very values-driven, mission-driven brand and we put stylists first,” she emphasized.

On the franchisor side, Russell and Sola “battened down the hatches.”

“In early March we looked at that worst-case scenario and cut all non-essential expenses,” said Russell, but they’ve avoided layoffs. “One of my goals is to get through this with my entire team intact…If my outlook starts to change, I will be transparent about that.”

Sola debated pushing pause on discovery days, but Russell said candidate interest actually prompted them to create a virtual discovery day, with the first one set for next week.

“We’re blessed to be in an industry that I think will bounce back from this,” she said.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
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