Drive personnified: Toni Mascolo

Passion matters. It is why entrepreneurs start businesses. It is what persuades others to get involved, as employees, customers or suppliers. It is a sustaining force during bad times. But it is not necessarily inexhaustible. Successful growth creates plenty of ways that can diminish its force.

So how do successful entrepreneurs stay passionate? What keeps their adrenaline flowing? How do they keep alive their passion for innovation, for doing something new, for doing it better?

Few entrepreneurs have sustained their passion for their business as powerfully and successfully as Toni Mascolo. An Ernst & Young Master Entrepreneur Of The Year finalist in 2005, he opened his first hair salon in south London in 1963.

Today there are roughly 250 Toni & Guy salons in the UK as well as hundreds around the world. The annual turnover of the business exceeds £115 million.

Mascolo’s empire is not confined to salons; it includes hairdressing academies, magazines, TV, a shopfitting business and a design company.

Now, with more than 40 years of entrepreneurial experience under his belt, he talks to Masterclass about how to keep a business buzzing over the long-term. Mascolo’s business is owned by the family but is franchise-based: ‘It encourages people to do for themselves what we have done,’ he points out.

Mascolo is one of the UK’s franchise pioneers, having first observed franchising in action in the US in the sixties. He and his brothers already had a few salons but they could see the growth potential that franchising could provide the still-young enterprise: ‘We had already built a strong business and were rejuvenating the world of hairdressing. But as we expanded we were losing many of the hairdressers that we had trained.

‘It’s a bit like building a football team – it keeps getting dismantled.’

Franchising provided a solution, but he was up against ignorance in the early days: ‘I went to my bank manager, who was an intimidating man,’ he recalls. ‘When I started to tell him what I wanted, he asked me: ‘What is franchising?’

‘The old structure was to franchise everything,’ Mascolo says. ‘You rented the chairs, you bought all your own products. But to execute a proper franchise, you have to provide a brand, an image, full education – the whole package.’

The Toni & Guy model stipulates that nobody can operate more than one franchise – ‘That way, they don’t then become managers,’ he explains. ‘It keeps them close to what they want to do.’ (But a franchise holder can take a minority stake in another Toni & Guy.)

The original issue, though, hasn’t gone away: ‘We still teach most of the hairdressers in the UK,’ Mascolo says.

‘Most of our competitors are former Toni & Guy people. You just have to move on and train more people.’

Few business owners remain as close to their customers as Mascolo – he still cuts hair. Over the years, the growth of Toni & Guy has eaten into his salon time.

‘Ten years ago I would do one day a week in the office,’ he recalls. ‘On Tuesdays, I would work at Davies Street, Wednesdays at Kingston, Saturdays at Sloane Square and so on. Gradually, the balance shifted. It was very painful, dropping customers who were like friends. Now, I do half a day each week.

‘For me, that is when I am at my happiest,’ he smiles. ‘I am walking on air when introducing a new style to a customer, introducing them to great new features, providing great haircuts.’ He makes a clear distinction between Mascolo the businessman and Mascolo the hairdresser. ‘When I am a hairdresser, I will wear the white-and- black outfit just like everybody else. I have sandwiches with the juniors in their staff room. They should respect me for my haircutting skills, not what I am.’

But it is, he acknowledges, ‘A young man’s business. It may not be physically demanding but, if customers don’t know me, they think I am a bit old for the job. People are suspicious of an older man in a salon when they first come in.’

For Mascolo, the new ambition is his new product line, Label M. ‘We are trying to create a global product line,’ he says. ‘We are well-equipped to do this efficiently. Label M has great packaging and is absolutely made to be a big player. In five years, it could easily be a $1bn product company, with the stamp of T&G behind it.

‘We know what the basics need to be,’ he adds. All 400 salons provide a powerful distribution channel for these new products – Toni & Guy franchises can only use Label M. (Previous ranges of Mascolo’s products are already distributed in many other salons).

Internal competitions add energy and provide Mascolo with a huge buzz. Two thousand Toni & Guy people attend the company’s annual awards. ‘They treat these as the ultimate, being given by compatriots and fellow hairdressers. For me, it’s a great opportunity to motivate and excite people.

‘I’m 63,” laughs Mascolo, “but I don’t think 63. I will always be there to support the business but I have taken on a more consultative role. However, I will always try out the new scissors, brushes and combs. I will trust my people but I will always trust myself as much. After all, I still have good opinions of what the business should be. My family and I are out there in the street, talking to customers, listening to what people say.’

Mascolo’s daughter is currently artistic director for Toni & Guy: ‘She is the most talented hairdresser, imaginative and creative, and a tremendous support’ while his son Christian – ‘he is a marvellous teacher’ – runs the Essensuals chain of salons. Family continuity is very important. So, too, is his sense of what Toni & Guy has achieved to date: ‘We have exported products and have trained people. I have done my bit for Britain.’

Franchising: the state of the nation

Over one-third of franchisers in the UK now have an international presence, according to the 2005 NatWest/British Franchise Association Survey. The proportion of UK franchisers operating in the US has almost doubled in the past year, which could be due to more favourable economic conditions, as a result of the weak dollar and the absence of any language barriers.

The biggest barrier to growth in franchised units outside the UK continues to be language barriers, with 34 per cent citing it as their biggest concern, and 18 per cent admitting that the legislation in some countries causes too much confusion to make a venture viable. According to the survey, the franchising sector turns over approximately £9.1 billion and employs at about 327,000 people. The number of franchise units being forced to close or change direction is at its lowest level in 21 years, at 1.7 per cent. The industry is maturing, with the average length of time that franchisees run their business rising from 6.8 years in 1994 to 9.9 years in 2004.

See also: Expansion through franchising

A lack of suitable franchisees continues to thwart franchisers’ plans. Thirty-nine per cent cited it as the biggest barrier to expansion. Franchisers see lack of sufficient capital as the main reason for not granting a franchise to prospective franchisees. Getting a franchise up and running is also becoming increasingly time-consuming. The length of time taken from first contact to commencement of operations has risen to around seven months, a month longer than in 2003.

This article was originally published in Masterclass magazine.

Nick Britton

Nick Britton

Nick was the Managing Editor for when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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