The word “franchise” conjures up visions of fast food chains like Subway, McDonalds and Burger King. Flip Flop Shops, however, is a newer retail franchise chain that is putting surf sandal brands in locations across the globe, where they sometimes wouldn’t get exposure.
The franchise recipe appears to be working. In the last two years, the company, headed by partners with lots of experience opening restaurant franchises, has opened 30 shops with 54 other locations in lease negotiations, build-out or in the process of opening. The stores are in Canada, USA, and St. Marteen in the Caribbean. It also has stores in Guam and in Hawaii.
The company aims to have 236 shops by 2013.
We got a chance to talk to Brian Curin, the President of Flip Flop Shops, about his involvement in the industry, sandal trends and how his shops fit in the $20 billion sandal sector.
When did you start Flip Flop Shops and what’s your background?
Brian Curin, president of Flip Flop ShopsTwo of my business partners, CEO Darin Kraetsch, and COO Alan Woods, and I were the original guys behind the growth of Cold Stone Creamery.
We had traveled around the world while developing the Cold Stone Creamery brand and system, and then moved on to develop and grow Moe’s Southwest Grill into the number one Tex Mex franchise chain in North America. We also had Planet Smoothie and a bunch of other concepts along the way.
After Moe’s Southwest Grill was acquired, we wanted to build a brand that fit our lifestyles and would allow us to be in the industry that we all have a passion for.
All of us grew up in the action sports world doing everything from motocross to wakeboarding, snowboarding to surfing, and we said we wanted to do a business that allowed us to dress the way we wanted to while “Freeing Our Toes,” our company motto.
I walked into an already existing Flip Flop Shops in Scottsdale, Arizona four years ago.
It was really a mom and pop, with white slat walls and just a few brands. We talked to the owners about taking the store to the next level.
At the time, there were only a few shops. We kept the previous owners on as partners, but rebranded and redesigned the whole concept.
We did a lot of research on who we wanted shopping in our shops and what we wanted it to be like, and built the new concept all around our target consumer. We launched the brand in 2008.
Where are the shops located?
Erica Hosseini is the face of Flip Flop Shops
We are in 20 states — heavy in California, Texas, Florida, the Carolinas, in the Northeast, Vancouver and Edmonton in Canada, Guam, Hawaii, and we just opened a shop in St. Marteen. Every shop is typically located in a fairly iconic location.
For example, we are in Universal Studios/City Walk, Mandalay Bay and Fashion Show Mall on the Vegas Strip, West Edmonton Mall, the largest mall in North America, Waikiki Sheraton and in Santa Barbara we’re on State Street.
Wherever we open, we are in THE spot. We are also gearing up for some airport locations.
Are all the shops franchised?
All are franchised, except our Irvine Spectrum shop. Early on, when we entered into the action sports industry, we found that a lot of people didn’t know what being a franchise meant.
It’s not that much different than a chain account, but the bonus is, you have people who have invested $200,000 of their own money into opening their own shop versus having a company manager run a store that someone else has financed, so they are heavily vested into making it work.
See Page 2 for Flip Flop Shops’ franchisee requirements, 8 core brands
What are some of the requirements you have set up to be a Flip Flop Shop franchisee?
Every shop, no matter where in the world it is, has to carry eight core brands as long as distribution exists, these include: Cobian, Flojos, Havaianas, OluKai, O’Neill, Reef, Sanuk and Vans.
Then outside of those eight, we have a list of 20-plus approved brands they can carry. If they want to carry a brand not on this list, they can’t unless we approve it for a test.
So if I am the Sanuk or Reef rep, can I just sell to one buyer to get in all the stores?
Reps localize the order with our shop owners at the shop level after we communicate the recommended and required brands and styles for each season.
This comes directly from our strategic relationships with the founders and execs at each one of our core and approved brands.
If you are a new company or one not on our list, you can’t go into a Flip Flop Shops until you get permission to sell from me first.
So if you are one of the eight core brands, that means you are sitting pretty within the Flip Flop Shops chain?
The eight core brands get 80% of the peg space in our shops. They also get a lot of attention with graphics and are involved in all of our in-shop promotions and media.
It’s good for brands. For example, for the first time in Reef’s history, they did a system-wide promotion. They did it with us in April and we were up more than 300% in that month alone with Reef. The model works.
I also read that your shops are eco-friendly and that they smell like coconuts when you walk in.
When we designed the shop, we designed it around our core consumers — 63% female, age 15-34 who visit and make purchases in our shops an average of four times a year. This age group typically has 10 pairs of flip flops at any given time in their closet.
We trademarked the term “Environmentally Responsible Retail.”
We do things like use a cork floor from recycled corks of wine bottles. We have bamboo cash wraps, from stripped bamboo that still allows trees to regenerate, and recycled particle board (recycled wood that would normally go to waste) for fixtures and displays. We also use water-based glues and paints, and low-energy efficient lighting.
Last year, we were awarded the International Council of Shopping Retailers “Hot Retailer” Award for 2010. It was mostly due to the design and in-shop experience a customer gets.
About 10 feet from the shop, customers pick up the smell of our proprietary coconut suntan oil scent that wafts through each of our shops.
See Page 3 for what’s hot at Flip Flop shops
What’s hot now in the flip flop world?
We have some shops in seasonal locations. So during the Fall/Holiday season, we carry a lot of hanging footwear like Sanuk Sidewalk Surfers.
We also launched with Vans in July and carry their hanging footwear, as well. You will also find the warm and fuzzy sandals like the Reef Chewmaca, which is a lamb’s wool lined sandal. We also have Emu and Ugg products so people can buy boots.
We are also testing däv, a high fashion rain boot line.
Right now, a lot of higher end leather products that brands have introduced are doing well. Flip flops used to be very utilitarian, and now there are flip flops that people need throughout the day.
Besides your partners, you have some other heavy hitters behind the brand?
Yeah, Sue Bunda is on our advisory board. She’s pretty much number two at CNN as the executive vice president of content development and strategy for CNN Worldwide.
Pro surfer Erica Hosseini has been the face and feet for the brand.
There’s also Chris Zimmerman who is on our advisory board and an investor. Zimmerman spent the last 20 years or so running divisions at Nike, was the CEO of the NHL’s Vancouver Canucks and now is serving as the president of Easton Sports at Easton-Bell Sports, Inc.
Where are the headquarters?
Darin Kraetsch, CEOI am based in beautiful Vancouver, BC, but we are an Atlanta-based company with people in Boston and Irvine. I am in Orange County once a month visiting with the core and approved brands and of course Erica.
So how big are you guys?
We don’t disclose revenues, but we are in a good position, let’s put it that way.
We feel that by end of 2011 we will be the largest retailer, both brick and mortar and online, to the flip flop and sandal industry.
Ecommerce is next?
Yes, we are launching an online retail shop soon and will announce a major joint venture with our interactive partners who are known for e-commerce dominance.
