Franchising Since: 1979
Headquarters: Minneapolis, Minnesota
Estimated Number of Units: 2,140
Franchise Description: The franchisor’s name is Supercuts, Inc. Franchisees will have the right to own and operate a retail hair care establishment providing haircutting and related services under the “Supercuts” mark and other distinctive marks. The parent company of Supercuts is Regis Corporation.
Training Overview: The franchisor will furnish through virtual and distance learning and other electronic means and, at its option, at a designated training location of its choice (which may be the franchisor’s corporate headquarters, an operating Supercuts store, and/or the franchisee’s store) an initial training program on operating a Supercuts store. The franchisor will train the managing owner and the franchisee’s other managerial employees, although the managing owner must satisfactorily complete initial training only once, regardless of the number of Supercuts stores that franchisees or their affiliates own and operate. All new haircutting employees must attend the then-current initial training course conducted by the franchisor, its designee, or the franchisee’s certified technical trainer (CTT)—at a training location designated by the franchisor or the CTT and/or through virtual and distance learning and other electronic means—before providing haircutting and related services at the store. The franchisor may require the managing owner and the store’s other managers to attend and complete satisfactorily various training courses and programs offered periodically during the term by the franchisor or third parties at the times and locations the franchisor designates. Besides attending and/or participating in the various ongoing or supplemental training courses and programs, at least one of the franchisor’s representatives (the managing owner or another designated representative the franchisor approves) must attend an annual meeting of all Supercuts store franchisees for up to four days at a location the franchisor designates.
Territory Granted: Franchisees will operate the store at a specific location meeting the franchisor’s site selection requirements. Franchisees will not receive an exclusive territory.
Obligations and Restrictions: Franchisees must designate one of their individual owners holding at least 10% of their ownership interests to serve as the “managing owner.” The store must have at least one on-site manager, whether that individual is the managing owner or another store manager. The store must offer for sale all products and services the franchisor periodically specifies. The store may not offer, sell, or otherwise distribute at the Store premises or another location any products or services the franchisor has not authorized.
Term of Agreement and Renewal: Provided the Franchise Agreement is not sooner terminated according to its terms and conditions, the term expires only upon the termination or expiration of the right to lease or sublease the franchised location (including renewal periods, if any) unless the franchisee relocates within 180 days of such termination or expiration.
Financial Assistance: Except as described, the franchisor does not offer direct or indirect financing or guarantee a franchisee’s note, lease, or obligation. If franchisees request and Supercuts agrees to guarantee their lease obligations in any way (e.g., as tenant or guarantor), then Supercuts reserves the right to charge them a monthly fee of the amount by which 12% of their monthly gross sales exceeds their monthly lease payments for as long as such guaranty is in effect. Supercuts does not assume the landlord's obligations under the master lease, meaning that franchisees cannot hold Supercuts responsible for the landlord's non-performance. However, because of the sublease with franchisees, Supercuts may enforce the landlord's rights under the master lease.
Estimated Initial Investment
Name of Fee | Low | High |
| Development Fee/Franchise Fee | $39,500 | $39,500 |
| Leasehold Improvements | $60,000 | $120,000 |
| Furniture, Fixtures & Equipment | $25,000 | $50,000 |
| Construction Management Services Fee | $5,500 | $7,500 |
| Construction and Design Plan Review | $500 | $1,000 |
| Post Build Review | $1,500 | $3,000 |
| Computer Software (Point of Sale System; $170 per month) | $2,040 | $2,040 |
| Computer Hardware/Installation and Onsite Training | $1,876 | $2,418 |
| Opening Inventory | $5,000 | $10,000 |
| Hairstylists Academy (HSA) Training Fees (for 6 to 8 people) | $1,440 | $1,920 |
| Travel and Living during Franchisee Orientation Training | $2,050 | $4,500 |
| One Month’s Rent and Security Deposit | $4,000 | $12,000 |
| Grand Opening Advertising Expenses | $10,000 | $10,000 |
| Signs | $6,000 | $12,000 |
| Professional Fees | $6,000 | $12,000 |
| Additional Funds (3 months) | $15,000 | $30,000 |
| ESTIMATED TOTAL (including initial lease costs) | $185,406 | $317,878 |
Other Fees
| Type of Fee | Amount |
| Royalty Fees | For new stores, combined service and merchandise royalty fee is 4% of combined net service revenue and net merchandise revenue from opening date until first year anniversary. From first year anniversary until the Franchise Agreement expires or is terminated, royalty fee is 6% of combined net service revenue and net merchandise revenue. |
| Advertising Fees | 5% of net monthly service revenue (i.e., excluding merchandise sales). |
| Product and Service Purchases | Varies. |
| Testing and Evaluation Costs | Projected testing/evaluation costs to be incurred (amount depends on circumstances, including supplier’s location, testing required, and item involved). |
| Hairstylists Academy (HSA) Additional Training | 4 training days at $55 per day per attendee plus Mann equin Recovery fee of $67 for the 2 mannequins that stylists use in HSA. |
| HSA Recertification | The cost of all training supplies and materials, including, without limitation, mannequins. |
| Managers’ Training Course/ Ongoing and Supplemental Training | The cost of training supplies and materials and a proportionate share of the training facilities (if any) and any audio visual equipment needed for such training courses. |
| Convention Fee | Will vary under circumstances (not to exceed $1,000 per person does not include the franchisee’s actual out-of-pocket attendance costs paid to third parties). |
| Anniversary (Renewal) Fee | 1% of total net monthly revenues for 12 full months immediately preceding first 10-year anniversary. For each 10-year anniversary thereafter, 2% of total net monthly revenues for 12 full month immediately preceding such anniversary date. |
| Transfer Fee | 1 store: $2,500 2 stores: $4,500 3 stores: $6,000 4 stores: $7,000 5 stores: $7,500 Each store after is $500. |
| Lease Renewal Fee | $1,500 |
| Lease Guaranty Fee | The amount by which 12% of the monthly gross sales exceeds the monthly lease payments for as long as such guaranty is in effect. |
| Audits | Cost of inspection or audit, including legal fees and independent accountants’ fees, plus travel expenses, room and board, and compensation of the franchisor’s employees (amount depends on nature and extent of the franchisee’s non-compliance). |
| Late Payments/Interest /Administrative Fee | 1.5% per month or the highest commercial contract interest rate the law allows, whichever is less. In addition, franchisees must pay the franchisor a $100 administrative fee. |
| Construction Management Services Fee | $5,500 - $7,500 |
| Construction and Design Plan Review Fee | $500-$1,000 |
| Post Build Review Fee | $1,500-$3,000 |
| Gift Card Transactions | $45 per download software download fee and $15 per terminal annual software maintenance fee (both if the franchisee supplies their own terminal device); per transaction fees range from $.0225 to $.07; nonsufficient funds recovery fee of $.05 per card. |
| Indemnification | Varies under circumstances and depends on nature of claim. |
| Maintenance Cost Reimbursement | Out-of-pocket cost reimbursement. |
| Costs and Attorneys’ Fees | Varies under circumstances and depends on nature of the franchisee’s non-compliance. |
| Management Fee | Up to 10% of gross sales, plus any out-of-pocket expenses incurred in connection with store’s management. |
| Reimbursement for Third-Party Service Providers | Out-of-pocket cost reimbursement. |
| Reimbursement for Customer Complaints | Cost reimbursement. |
| Tax Reimbursement | Out-of-pocket cost reimbursement. |
| Insurance Reimbursement | Out-of-pocket cost reimbursement. |
| Deficiency Correction Fee | Out-of-pocket cost reimbursement. |
| De-Identification Fee | Cost reimbursement. |
| Lost Future Royalties | Depends how much time remains in franchise term when the franchisor terminates with cause or the franchisee terminate without cause. |
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