Supercuts
Date of Incorporation: 1987
Franchising Since: 1988
Headquarters: Delaware
Country: U.S.
Description: Supercuts licenses the operation of retail hair care establishments known as Supercuts. Supercuts grants the limited right and license to operate a Supercuts Store offering the services and products approved by Supercuts and using its formats, designs, methods, specifications, standards, operating procedures and certain proprietary trademarks, service marks and other commercial symbols
Franchise Offer: The franchisee 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.
Financial Assistance: Supercuts and its agents and affiliates do not offer direct or indirect financing or guarantee the franchisee’s note, lease, or obligation. Supercuts may offer financing arrangements in the future depending on interest rates, availability of funds and other economic factors.
Training and Assistance: Supercuts' offers its customary initial training course concerning the operation of a Supercuts location. The franchisee is entitled to have one additional person attend this training course at the same time as them. There shall be no additional training fee for this person's concurrent attendance at the training course.
Territory: The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that they control.
Term of Agreement and Renewal: The term of the franchisee agreement expires only upon termination or expiration of right to lease or sublease franchise location (including renewal periods, if any) unless the franchisee relocates within 180 days of such termination expiration.
Obligations and Restrictions: Although Supercuts strongly encourages the franchisees direct involvement, Supercuts does not require that they participate personally in the day-to-day operation of the Supercuts Store. It is Supercuts’ policy, however, that the Supercuts Store must at all times be under the direct, on-premises supervision of a manager (who may be the franchisee) who has completed the training program and devotes his/her entire time during business hours to the management of the Supercuts Store. The franchisee is prohibited from offering or selling any products or services not authorized by Supercuts and from using the premises for any purpose other than the operation of Supercuts establishment.
Total Number of Units: Over 2,100 units.
Investment Tables:
Initial Investment:
| Name of fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $12,500 | $22,500 |
| Leasehold Improvements | $32,000 | $60,000 |
| Furniture, Equipment & Supplies | $21,000 | $45,000 |
| Computer Terminal/ Software | $5,000 | $7,000 |
| Opening Inventory | $5,000 | $9,000 |
| Travel and Living Training | $2,500 | $4,000 |
| Prepaid Rent | $2,000 | $4,800 |
| Grand Opening Expenses | $5,000 | $15,000 |
| Signs | $2,000 | $5,000 |
| Additional Funds (3 months) | $4,000 | $17,400 |
| Working Capital (3 months) | $20,000 | $50,000 |
| Estimated initial investment | $111,000 | $239,700 |
Ongoing Fees:
| Name of fee | Amount |
|---|---|
| Royalty Fees | For new stores the combined service and merchandise royalty fee is 4% of combined net service revenue and net merchandise revenue: From the open date until the first-year anniversary. From the first-year anniversary until the Franchise Agreement expires or is terminated, the royalty fee is 6% of combined net service revenue and net merchandise revenue. |
| Advertising Fees | Grand opening advertising of $5,000 or less. 5% of net monthly service revenues (except sales of merchandise) with a potential rebate if 75% of stores in specific DMA vote in favor of rebate) |
| Additional Training | $200 ($40 per employee per day for 5 days per new stylist at SUPERCUTS' discretion The training fee will be $40 per employee per day and will increase every five years, commencing January 1,2007, by the Consumer Price Index ("CPI") increase for the five year period plus one percent (1%). |
| Refresher Course | SUPERCUTS does not charge the franchisee for these classes, which generally require one day, however, the franchisee is responsible for any wages, salaries, travel/lodging expenses. This training is required within one year of initial training of each employee. |
| Managers' Training Course | A portion of the cost of facilities, materials and audio visual equipment for training related to duties |
| Anniversary Fee | 1% of total net monthly revenues for 12 full months immediately preceding first 10 year anniversary. For second 10 year anniversary and every 10 years thereafter, 2% of total net monthly revenues for 12 full months immediately preceding such anniversary date. |
| Transfer Fee |
1 store $2,500 2 stores $4,500 Each store thereafter is $ 500 |
| Sublease Payments | $2,000 - $4,000 per month |
| Audits | All unpaid fees, cost of audit plus interest at highest allowable rate not to exceed 18% per annum from date due |
| Late Payments | 18% per annum minimum, not to exceed highest applicable commercial contract rate under applicable state and/or federal law |
| Modernization | $35,000 adjusted for inflation (not to exceed 2% per year), spent on capital improvements to modernize and update store location [Note: $35,000 may not represent the entire costs of a complete remodeling, only updating the decor and partial remodeling |
Date of FDD: 2009
The above information has been taken from the UFOC/FDD and online sources of Supercuts.
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