A popular franchise for entrepreneurs who want to get into the higher-end men hair salon industry, Roosters Men’s is also a very profitable business: it makes $304,000 in revenue per year on average and reaches ~27% EBITDA margins.
In this article we’re looking at Roosters Men’s Grooming Center and its Franchise Disclosure Document to find out all you should know about its financials, and whether you should buy it. Let’s dive in!
|Revenue per unit||$304,000|
|Revenue per sq. ft.||[franchise_value_revenue_per_sq_ft]|
|Sales to investment ratio||1.1x|
|Minimum net worth||$1,000,000|
|Minimum liquid capital||$250,000|
What is Roosters Men’s Grooming Center?
Roosters Men’s Grooming Centers is an American men’s grooming franchise headquartered in Minneapolis, Minnesota.
It was founded by Joe Grondin in 1999 in Lapeer, Michigan and its parent company is Regis Corporation.
Its franchisees operate a unique full-service grooming center that provides personal grooming services primarily to men, including haircuts, beard trims, hair color and shaving.
Roosters Men’s Grooming Centers’ franchising journey began in 2002 and today it has more than 92 salons, with 89 of them in the US.
Roosters franchises pros and cons
- Comprehensive training and education: The brand offers its franchisees with on- the- site and online training programs to equip them with the basics of its systems and how to carry out a successful grand opening and run a successful franchise. Also, the franchisor offers additional courses and seminars on an ongoing basis.
- Recruitment assistance: The franchisor helps its franchisees how to recruit and train qualified directors, managers and stylists for their centers.
- Marketing and sales: The brand provides its franchisees with robust marketing and advertising strategies to create awareness about its services. These include national media, social media, ad templates and personalized promotional tools.
- Third-party financing: The brand has established relationships with third-party lenders to fund its franchisees’ startup fees, equipment, inventory and development fees.
- Real estate and site selection: The brand provides its franchisees with site selection assistance to identify the right salon location, which includes designing and constructing. Also, it helps them with lease negotiations to minimize their development costs.
- Ongoing and extensive support: The brand offers its franchisees a proven business concept, solid management and growth insights, timely procedural updates, operational reviews and access to networking relationships with successful franchise partners.
- Relevance: Roosters model is relevant in any community and economy. It provides franchisees with a specific and unique clientele, setting them apart from the competition and allows them to franchise one or multiple Roosters Men’s Grooming Centers.
- No exclusive territory protection: The franchisor does not grant its franchisees the right to operate in a protected area. Franchisees may face competition from franchises granted by the parent company or from competitive channels it controls.
- Not a part-time business: The franchise cannot be operated as a side business or part-time.
- Not a home-based business: A Roosters Men’s Grooming Centers franchise cannot be operated from home or a vehicle. The franchises must be operated from an office space, a warehouse or a retail facility.
- Not a passive investment: The franchise does not allow for absentee ownership. Franchisees must be actively involved in the day-to-day operations of their salons.
- Competition: direct competition from hair salon franchises, possibly The Den Salon and diPietro Todd Salons, or even more affordable salons like Sport Clips or Smart Style
How much does a Roosters franchise cost?
You would need to invest on average $275,500 to open a Roosters Men’s Grooming Centers franchise.
This is an affordable hairdresser franchise. Indeed the estimated investment is on the lower end compared to other salon franchises ($450,000 on average).
The investment amount is an average that depends on factors like the studio’s location, size, etc. Generally, the investment ranges between $208,166 and $342,808.
Roosters franchise startup costs
The investment covers all the startup costs you may need to start a salon. In addition to a $39,500 initial franchise fee to the franchisor, the investment also covers:
- Formation costs: initial training program, leasehold improvements, construction management, equipment, furniture, exterior signage, computer system, POS, professional fees, etc.
- Marketing: grand opening advertising costs
- Operating costs: insurance, rent for the first and last month, opening inventory, working capital for the first 3 months, etc.
|Type of cost||Low||High|
|Initial Franchise Fee||$39,500||$39,500|
How much revenue does a Roosters franchise make?
A Roosters Men’s Grooming Centers franchise generates $305,000 in revenue per year on average.
This is the annual median sales of 81 franchised grooming centers during July 2020 – June 2021 as disclosed in the Franchise Disclosure Document. Indeed, out of the 89 franchises during this time period, only 81 were opened during the whole fiscal year.
Below is a chart depicting the median revenue per unit for Roosters franchises:
- The top 1/3 of salons make $471,000 in revenue per year on average
- The bottom 1/3 instead make $155,000 in turnover per year
How profitable is a Roosters franchise?
We estimate that a Roosters Men’s Grooming Centers studio makes about $83,000 in profits per year (27% EBITDA margin).
This profit margin is in line with salon franchises (~27-30% industry average).
Note that Roosters Men’s Grooming Centers only discloses revenue, royalties and rent costs in its FDD. Therefore to calculate EBITDA we had to use salon franchises benchmarks for other costs (e.g. staff, COGS, other operating costs).
|Profit and loss||Amount||% revenue||Source|
|Revenue||$305,000||100%||as per FDD|
|Rent||$(36,000)||12%||as per FDD|
|Royalties||$(18,244)||6%||as per FDD|
|Marketing*||$(15,203)||5%||as per FDD|
|Other Opex||$(21,285)||7%||industry average|
Source: Franchise Disclosure Document 2022
Should you buy a Roosters franchise?
So should you invest in a Roosters Men’s Grooming Centers franchise?
As explained earlier, in addition to the initial franchise fee of $39,500, you would have to fund significant startup cost to open a new Roosters hair salon ($275,500 in total). Is this worth the profits that a Roosters salon will generate?
The good news is that we think it does. The payback for a Roosters Men’s Grooming franchise is 6 years on average (assuming a 15% net profit margin), which is a great number for a hair salon franchise.
In other words, Roosters is a great investment: you would repay creditors (banks) and any investors who helped fund the $275,500 startup costs within 6 years on average. After that, you can reap the profits.
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