September 25, 2016
Hammer & Nails Salon Raises $200,000 From Shark Tank Viewers After The Sharks Said No Deal
Michael Elliot, a Hollywood screenwriter-turned-entrepreneur who wrote Brown Sugar and Just Wright, saw a need for a nail shop that caters to entrepreneurs, athletes, mechanics, and men who take proper care of their appearance and hygiene. So he created a first-of-its-kind environment that was welcoming to all men. Oversized leather chairs, flat-screen TVs, dark woods, dim lighting, and sips of whiskey are what you’ll find at Elliot’s Hammer & Nails, the Nail Shop for Guys, located on Melrose Avenue in Los Angeles.
The male-centric salon, which opened in 2013, cost $250,000 for the build-out. With a price tag ranging from $23 for a basic manicure to $120 for a milk-and-honey soak experience, Hammer & Nails made $150,000 in sales revenue the first seven months in business. It is on target to generate $2 million in revenues for 2016, with a staff of nine at the shop on Melrose and five employees at the Hammer & Nails Salon Group corporate office.
Coming to the realization that there was considerable interest in a nail salon for men, Elliot wanted to franchise his concept to grow the business. Franchising is a popular business model that has proven to be a successful expansion strategy, delivering rapid growth. Stellar examples include McDonald’s and Coca-Cola.
Swimming With The Sharks
(Courtesy of Hammer & Nails)
To raise capital for his expansion, Elliot auditioned for ABC’s hit reality competition show, Shark Tank. Hammer & Nails was featured on Season 6. The episode aired Sept. 26, 2014, the most-watched season premiere in the show’s history. Elliot was seeking a $200,000 investment in return for 20% equity to help franchise his brand. He began his pitch by explaining that the shop was designed to appeal to men who would never enter a traditional nail salon. It wasn’t the service that was making men so uncomfortable, it was the salons themselves because they were designed to appeal to women.
Elliot didn’t get a deal. In fact, he recalls, “Mr. Wonderful (Kevin O’Leary) said, “it will never work.â€ He did get priceless exposure for the Hammer & Nails brand, concept, and plans for franchising. He did raise $200,000 from eight viewers of the episode, two of whom are African American female angel investors. He did get flooded on his website and e-mail inbox with thousands of names of people expressing interest in franchising opportunities.
“From the beginning, I was thinking big and that I had the potential to grow a national brand, says Elliot. “Knowing that was my goal, it affected some on my decisions starting out. I didn’t want to be a nail shop in a strip mall; my first shop had to be in a premium location–one of three well known iconic streets in L.A.–Rodeo Drive, Sunset Boulevard, or Melrose. I always knew I wanted to integrate barbering into the model to launch the concept as a national franchise.
Building Over 100 Hammers & Nails
Today, in large part due to the introduction of the brand to Shark Tank‘s captive audience of more than 7 million viewers, Elliot has sold 183 franchise licenses in eight states since January. The total investment range to open a Hammer & Nails is $234,700 to $531,400. The franchise fee is $20,000 and the royalty fee is 6%.
Six Hammer & Nails shops are slated to open over the next six months. The first location is on track to open in Miami come December. Two locations will open up in the Bay Area and one in Santa Fe, New Mexico. Another will open in Plano, Texas, come March 2017, while the sixth is expected to open in Greenville, South Carolina, around June 2017. The blueprint for a Hammer & Nails: pedicures, manicures, barbering, straight-razor shaves and membership sales–all in a “man cave nirvana” setting.