DiGrigoli Salons

Babson Professor Stephen Spinelli, Case Director

D.R. Widder, Case Writer

Arthur M. Blank Center for Entrepreneurship

© Babson College, 2006.

Abstract

DiGrigoli Salons is a classic “small business” led by a driven entrepreneur, Paul DiGrigoli, a 25-year veteran of the salon business. While Paul has experienced a number of ups and downs—including the dissolution of an early partnership, Paul has succeeded in building three salons and a salon school. Paul feels that his third salon, which is a composite of everything he’s learned, represents a “perfect model”. This case involves Paul’s decision to take his company to the next level by growing the number of outlets dramatically (although he does not have a specific number of stores in mind). Since he believes that he has perfected the model, he is considering franchising as the growth vehicle. Some of the issues the student will consider: · Is DiGrigoli Salons a robust opportunity? · Should Paul grow his business? · Is franchising the right growth vehicle? Note that the case includes the numbers necessary to analyze the unit economics. The teaching note includes a more detailed set of financials and pro forma economics including a model store, a franchisee and the franchisor.

Teaching Objective: To present a framework for opportunity assessment with regard to growth and franchise models in a highly competitive environment.

Key Words: Entrepreneurship Franchising Hair care industry Employee training Store management Partners Concept replication Branding Growth strategies

DVD

There is a 38 minute DVD available for this case. Please place orders through ecch.

Teaching Notes

A 9-page teaching note written by Prof. Stephen Spinelli is available for this case