Why These Founders Took a Huge Step Back and Became Franchis…

This story appears in the November 2017 issue of Entrepreneur. Subscribe »

The simple act of cutting a child’s hair is, in fact, anything but simple. At best, the customer is in perpetual motion. At worst: in hysterics. As parents of two, Cookie and Larry Shelton knew this experience all too well. So in 1994, they created Cookie Cutters, a hair salon that serves young clients and delivers a comfortable, stress-free experience for both the little ones and their parents.

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With eye-catching interiors that feature playful kid-size seats and a seemingly endless supply of bubbles and balloons to distract and delight nervous kiddos, Cookie Cutters grew to 28 locations over two decades. By then, the Sheltons needed a break and sold the business to Neal and Alexis Courtney, two of their most trusted franchisees. But instead of washing their hands of the operation completely, they held tight to three locations in their hometown of Indianapolis and became franchisees themselves.  

What made you decide to sell the business after 20 years?  

Larry Shelton: Well, you have to either expand or sell. We started in ’94 and franchised for years, so we’ve been through the stress and the work that comes with selling franchises. And now we’re at an age where we didn’t want to do that again. A younger crowd is more suited to it. 

Cookie Shelton: We became grandparents, too! And I think that played into it. They’re 9, 6, and 20 months old. We also wanted to travel a bit, and the business was keeping us from having that freedom. 

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Was it tough to make the move from franchisor to franchisee? 

Cookie: To be honest, it’s been a relief knowing somebody else is going to be selling the franchise and making the name bigger. We’ve known Neal and Alexis for several years, and they’re ambitious and educated and have the drive to do this. I am definitely a type B personality, so from the beginning I knew that they were going to take the brand further than we could.

What was it about the Courtneys that made you comfortable with the transition? 

Larry: They were master franchisees with us, which means they had the rights to sub-franchise in six states throughout the Rocky Mountain region and were responsible for all sales and marketing, store development and ongoing operational support of stores within their territory, in addition to their own. Neal had been in the franchise business for years — he was CEO of Famous Brands International, which owns TCBY and Mrs. Fields — so he had probably more experience than even we did and had worked with different types of franchise concepts. The time spent working with him helped us feel confident that he’s who we wanted to carry the business moving forward. 

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How has the brand changed under their leadership? 

Larry: They’ve created several processes and best practices in marketing that focus on customer acquisition and retention. They’ve also formed several national partnerships in the area of real estate. Through their efforts, store count has gone from 28 to more than 50, with plans for 25 more to open by the end of the year. They have a lot more resources available to them than we did. It’s exciting to watch.