Great Clips Franchise Cost & Fees
Date of Incorporation: 1982
Franchising Since: 1983
Headquarters: Minneapolis, Minnesota
Business Description: Great Clips, Inc. licenses the operation of Great Clips salons, which are specialized and distinctive retailers of hair care and personal grooming services. The salons offer consistent, high quality, affordable, limited hair care services and a limited selection of products designated by Great Clips to men, women and children in a distinctive retail environment.
Franchise Offer: 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 (Great Clips) and using distinctive trade dress and business methods prescribed by Great Clips.
Financial Assistance: 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. Great Clips does not receive any payments from any company for the placement of financing. Great Clips 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, Great Clips may, at its sole and absolute discretion, guaranty a loan for a franchisee under limited circumstances and based upon certain criteria established by Great Clips. The United States Small Business Administration (SBA) currently offers a Franchise Registry Program to allow for the expedited processing of SBA loans for franchisees of approved franchisors. Great Clips has complied with the eligibility requirements of the SBA's Franchise Registry Program and has been approved for participation.
Training and Assistance: Great Clips provides training to the franchisee, stylists and management staff of the Great Clips salon. There are currently no refresher courses required, but the franchisee may re-attend all or portions of the Great Clips training programs at no additional charge other than travel and living expenses. The franchisee 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) Franchisee Orientation and Training, (2) Academy for Hair, (3) LEADS for Management Staff, (4) In-Salon Training. TEAM Training is not required, but is offered to management staff that has completed LEADS.
Territory: Franchisees will conduct the Great Clips business at an Authorized Location by establishing and operating the Salon as provided in the Franchise Agreement. Franchisees will receive an exclusive territory consisting of a circular area defined by a radius of three-quarters of a mile from the primary customer entrance of the Salon (the Protected Area). Great Clips agrees that 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 you 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 Great Clips in advance of the Salon opening. If the location of the Salon is determined by Great Clips to be a non-traditional site, the Protected Area will be determined by Great Clips at the time of the designation.
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.
Obligations and Restrictions: Franchisees must devote their best efforts to the management and operation of the Great Clips business, but are not required to personally manage the salon. Franchisees must successfully complete all Great Clips’ required training for franchisees in the time frame designated by Great Clips. The franchisee’s management staff and stylists must also successfully complete all training required by Great Clips. Franchisees may only offer inventory items and services designated by Great Clips and franchisees must offer the full range of services and required inventory authorized by Great Clips.
Estimated Number of Units: 3,870
|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|
|Leasehold Improvements, including Labor||$30,000||$70,000|
|Rent and Security Deposits||$1,000||$10,000|
|Fixtures, Signage and Furnishings, including Computer||$35,000||$50,000|
|Sales Tax on Fixtures, Signage and Furnishings||$0||$2,500|
|Opening Inventory and Supplies||$4,700||$6,400|
|Grand Opening Advertising||$15,000||$18,000|
|Lease Liability Fee||$0||$3,050|
|Lease Review Fee||$850||$3,350|
|Additional Funds (6-12 months)||$15,000||$50,000|
|Type of Fee||Amount|
|Continuing Franchise Fee||6% of the franchisee's 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 franchisee's Gross Sales.|
1) The Great Clips Academy for Hair
2) LEADS for Management Staff: Module 1
3) LEADS for Management Staff: Module 2
4) TEAM Training
5) Online Courses 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||Average of $100 per month.|
|Recruiting Technology||$120 per salon.|
|Insurance Coverage||$1,600-$2,500 per year.|
|Software License Fee and Support Fee||$155 per month; $25 per telephone call.|
|Credit Card Processing Fee||$25 Application Processing Fee; $.0225 per transaction.|
|Gift Card Processing Fee||$0.0095 per transaction.|
|Lease Liability Fee||$0 - $3,350|
|Lease Review Fee||$850-$3,350|
|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||Approximately $40,000-$70,000 .|
|Ongoing Maintenance Costs||$2,500-$5,000|
The above information has been taken from the FDD of Great Clips. Year of FDD: 2016
Franchise Direct's Disclaimer
You may be interested in the following franchises...