Great Clips Franchise Costs, Fees & FDD

Year Business Began: 1982

Franchising Since: 1983

Headquarters: Minneapolis, Minnesota

Estimated Number of Units: 4,425

Franchise Description: Great Clips, Inc. is the franchisor. A franchised Great Clips salon offers a required line of hair care services and products from a designated location, customarily in a shopping center, identified by trademarks licensed by the franchisor and using distinctive trade dress and business methods prescribed by the franchisor.
Training Overview: The franchisor provides training to franchisees, as well as their managers, and other key personnel (e.g. stylists). Franchisees must attend and complete all then-current training requirements described in the operations manual within the time frame established by the franchisor. There are currently no refresher courses required, but franchisees may re-attend all or portions of the Great Clips training programs at no additional charge other than travel and living expenses. Franchisees may be required to re-attend all or portions of a Great Clips training program, at Great Clips’ determination, as a condition for the renewal of the Franchise Agreement. There are four components of training: (1) The QuickConnect Training Program for Franchisees, (2) The Great Clips Academy Training (3) LEADS for Management Staff, and (4) In-Salon Training.

Territory Granted: Franchisees will conduct the Great Clips business at an authorized location by establishing and operating the salon as provided in the Franchise Agreement. The franchisor will grant franchisees a protected area consisting of a circular area defined by a radius of three-quarters of a mile from the primary customer entrance of the salon. The franchisor agrees that, except as it relates to non-traditional locations, it will not operate Great Clips salons or grant Great Clips franchises within the protected area, but franchisees may establish additional salons within the protected area if franchisees obtain the franchisor’s prior consent. If the salon is in a densely populated area, the protected area is a radius of one-tenth of a mile, as determined by the franchisor in advance of the salon opening. If the location of the salon is determined by the franchisor to be a non-traditional location, the protected area will be determined by Great Clips at the time of the designation. The Franchise Agreement does not prohibit franchisees from soliciting business for the salon from any location; however, except with Great Clips’ prior written consent, franchisees may not use alternative distribution channels such as the Internet, catalog sales, telemarketing, robocalling, texting, or other marketing methods to solicit business for the salon.

Obligations and Restrictions: Franchisees must devote their best efforts to the management and operation of the Great Clips business, and must manage or operate the salon on a regular basis through designated operator(s) or a manager who has successfully completed the Great Clips academy and management training programs. The franchisee’s management staff and other key brand-delivery personnel (e.g., stylists) must successfully complete all required training within the time frame designated by the franchisor. Franchisees and their spouse are obligated under the Franchise Agreement not to engage in or be connected with or participate in or consult with or share the earnings or profits of, or lease property to any other business or activity that competes with the Great Clips business at any location, including any retail haircare or personal grooming business, spa, beauty school, barber school, cosmetology school, or any business selling hair products during the term of the franchise, for one year after the expiration or termination of the Franchise Agreement at any location within five miles of any Great Clips salon or over the Internet, or for one year after they have assigned their interest in the Franchise Agreement anywhere within five miles of any Great Clips salon, subject to state law requirements. Franchisees may only offer services and inventory items designated by the franchisor and franchisees must offer the full range of services and required inventory authorized by the franchisor.

Term of Agreement and Renewal: The length of the initial franchise term 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.

Financial Assistance: Neither the franchisor, its agents, nor its affiliates offer financing arrangements for the purchase of a salon. The franchisor may offer financing arrangements in the future depending on interest rates, availability of funds and other economic factors. The franchisor does not receive any payments from any company for the placement of financing. The franchisor has no existing practice or intention of selling, assigning or discounting to a third party all or any part of any financing arrangement. Although it is not generally available, the franchisor, in its sole determination, may guarantee a loan for a franchisee under limited circumstances and based upon certain criteria it has established.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$20,000	$20,000
Initial Advertising Contribution to the Market Development Ad Fund	$5,000	$5,000
Travel and Living Expenses While Training (per participant)	$1,500	$2,500
Architecture Fees	$100	$3,800
Leasehold Improvements, including Labor	$70,000	$200,000
Rent and Security Deposits	$1,000	$10,000
Fixtures, Signage and Furnishings, including Salon Technology Hardware	$40,000	$55,000
Freight	$4,000	$7,000
Sales Tax on Fixtures, Signage and Furnishings	$0	$3,200
Opening Inventory and Supplies	$4,700	$6,400
Grand Opening Advertising	$20,000	$25,000
Insurance	$1,500	$3,000
Lease Liability Fee and Lease Review Fee	$0	$4,000
Additional Funds (6-12 Months)	$20,000	$60,000
ESTIMATED TOTAL	$187,800	$419,900

 
Other Fees

Type of Fee	Amount
Continuing Franchise Fee	6% of the gross sales.
Sales or Other Taxes Due on Continuing Franchise Fee	As imposed by state or local government.
Continuing Advertising Contribution to the North American Advertising Fund	5% of the gross sales.
Training Fee: 1) The Great Clips Academy 2) LEADS for Management Staff 3) Great Clips University Courses, Tools, and Resources	Combined fee of $200 per salon per year.
Renewal Fee	$1,750 per salon.
Assignment Fee	$1,500 per salon.
Local Co-op Dues	System average of $100 per month.
Recruiting Technology Fee	Currently $750 per year per salon.
Franchisee Program Fee	Varies by event, but ranges from $345 to $550 per meeting or event.
Insurance Coverage	$1,500-$3,000 per year, if franchisees do not purchase the required insurance coverage referenced in the Franchise Agreement and the franchisor purchases insurance on their behalf.
Software License Fee and Support Fee	Currently $250 per month per salon; $25 per telephone call.
Network and Hardware Managed Services Fee	$18.99 per month per salon.
Mobile Device Management Licensing Fee	$54 per year per iPad.
Management iPad Management Fee	$24.96 per year per management iPad.
Meraki MX68-CW Salon Router Maintenance Fee	$312 per year per router.
Lane 5000 Warranty and Support Program	$59.76 per year per terminal.
Other Technology Fees	Fees associated with the reconfiguration of salon technology are payable to The Foundation when an existing salon is purchased to transfer ownership. Technology support includes but is not limited to: $90 per salon router; $30 per salon iPad. These fees are subject to change.
Credit Card Processing Fee	$15 per location set up fee; $.016 per transaction; $5 per salon
Gift Cards and Gift Card Processing Fee	$0.32 per card; $0.095 per transaction.
Out-of-Pocket Expenses Related to Lease or Sublease Assignment	As incurred.
Real Estate Commission	As incurred.
Sister Store Review Appeal Fee	$500-$1,000
Late Charges	Accrued interest of 14% per annum or the highest interest allowed by law in the state where the salon is located.
Audit or Inspection Cost	Cost of audit.
Taxes, Business Debts or Liens	As applicable.
Salon Upgrades	$20,000 - $80,000
Salon Ongoing Maintenance Costs	Approximately $3,000 - $9,000.
Architectural Fees	$100 - $3,800

The above information has been compiled from the FDD of Great Clips. Year of FDD: 2025.
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