Franchise: Great Clips
Franchising Since: 1983
Headquarters: Minneapolis, Minn.
Estimated Number of Units: 3,694
About the Franchise
Today’s fast-paced lifestyle means that people need a salon that fits their busy schedules. That’s why Great Clips is open evenings and weekends — no appointments necessary. Great Clips offers affordable, quality haircuts in a comfortable, friendly salon.
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For the ultimate in convenience, Great Clips launched the industry’s first online check-in service, allowing customers to add their name to the wait list of a Great Clips salon — before they arrive.
With 3,700 salons throughout the United States and Canada, Great Clips is the world’s largest salon brand. Their salon owners and corporate office are dedicated to their salon communities with a focus on philanthropic and volunteer activities.
On average, it costs between $109,150 and $249,400 to open a Great Clips salon (depending on the market). Franchisees are required to have a net worth of at least $300,000 (in most markets) and at a minimum, $50,000 in liquid funds.
Neither Great Clips, its agents, nor its affiliates offer financing arrangements for the purchase of the franchisee’s Salon. Great Clips may offer financing arrangements in the future depending on interest rates, availability of funds and other economic factors.
Term of Agreement and Renewal
The term of the Franchise Agreement is 10 years from date of opening of the salon or, if the franchisee buys an existing Salon, the term will be the balance of the term of the existing Salon. The Franchise Agreement provides for consecutive additional renewal terms of 10 years each, if requirements are met.
Breakdown of Costs
The following information is compiled from the Franchise Disclosure Document of Great Clips (2014). The FDD will provide you with in-depth information regarding the costs and expenses you can plan to incur when developing a Great Clips franchise.
Initial Franchise Fee: $20,000
The Initial Franchise Fee is $20,000 if you are applying for a single Franchise Agreement with no participation in an incentive program.
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Initial Advertising Contribution to the Market Development Ad Fund: $5,000
Travel and Living Expenses While Training (per participant): $1,500 to $2,500
Great Clips provides training to the franchisee, stylists and management staff of the Great Clips salon. There are four components of training: (1) Franchisee Orientation and Training, (2) Academy for Hair, (3) LEADS for Management Staff, (4) In-Salon Training.
Architecture Fees: $600 to $3,500
You will pay architecture fees for plans and drawings for your Salon and for the costs of copying and delivering the drawings. The amount may be higher if revisions to completed plans are required, or if your local code requires engineered mechanical, electrical, and plumbing drawings. This amount may also be higher if your Salon will be located in a building requiring LEED certification (Leadership in Energy and Environmental Design Green Building Rating System).
Leasehold Improvements, including Labor: $20,000 to $50,000
A typical Great Clips Salon is approximately 900 to 1,200 square feet. Your Salon will likely be in a shopping center rather than a newly built, free-standing building. The cost of leasehold improvements will vary depending on the condition of the location when it is handed over to you from the landlord. These estimated costs are based upon receiving the location in a standard “vanilla shell” condition. Leasehold improvements, fixtures, signage, furnishings, and labor may be financed through lessors or third parties at your discretion. If you finance these items, you will incur financing costs.
Rent and Security Deposits: $1,000 to $8,000
Rent is generally non-refundable. Security deposits may be refundable either in full or in part, depending on the terms of your lease or contract.
Fixtures, Signage and Furnishings, including Computer: $30,000 to $40,000
Freight: $2,000 to $6,000
Sales Tax on Fixtures, Signage and Furnishings: $0 to $2,500
Opening Inventory and Supplies: $4,700 to $6,400
Grand Opening Advertising: $15,000 to $18,000
This amount does not include the cost of your discounted price or additional staffing required to successfully open your Salon.
Insurance: $1,500 to $2,400
These amounts only include your initial premium for the required property and public liability insurance, and are the estimated cost per year per Salon. The cost of other coverages, including your discretionary purchases and workers’ compensation, varies too widely to be easily estimated.
Lease Liability Fee: $0 to $3,000
If Great Clips has guaranteed your lease or assigned a lease to you with continuing liability to Great Clips, you must pay a non-refundable lease liability fee of $3,350.
Lease Review Fee: $850 to $3,350
If you have an attorney review your lease, typical legal fees will be between $850 and $3,350. If Great Clips assigns a lease to you, the costs of Great Clips’ attorney’s review have already been included in the lease liability fee.
Additional Funds (6-12 months): $12,000 to $45,000
This is an estimate only of the additional operating capital needed to operate your Salon during the initial 6-12 months after you open for business. Great Clips cannot guarantee that you will not have additional expenses starting the business.
ESTIMATED TOTAL: $114,150 to $216,000
These figures are estimates in setting up a Great Clips franchise and operating it for 6-12 months. It is possible to exceed costs in any of the areas above.