Sport Clips Franchise Costs $266K – $440K (+ 2024 Profits)

Sport Clips, a distinguished name in the men’s and boys’ haircare franchise industry, was founded by Gordon Logan in 1993. The brand’s inaugural store was opened in Austin, Texas, signaling the beginning of a venture that would significantly cater to an underserved niche in the salon industry, specifically focusing on haircuts for men and boys.

Recognizing the potential in this specialized market, Sport Clips began offering franchise opportunities in 1995, expanding its presence rapidly and marking its first franchise store in Houston, Texas.

The growth of Sport Clips has been both strategic and sustained, characterized by a careful expansion approach that ensures new stores are supported adequately. Sport Clips is headquartered at 110 Briarwood Drive in Georgetown, Texas.

Type of Expenditure	Amount
Initial Franchise Fee	$30,000 – $69,500
Travel and Living Expenses while Attending Initial Training	$1,000 – $2,000
Fixtures and Equipment (including computer equipment)	$58,000 – $74,000
Leasehold Improvements	$100,500 – $165,000
Supplemental Services Fee	$3,000 – $5,000
Professional Fees	$1,000 – $5,000
Permits and Licenses	$1,000 – $5,000
Lease Deposit	$0 – $7,000
Signage	$4,000 – $10,000
Miscellaneous Opening Costs	$3,000 – $5,000
Insurance	$1,300 – $4,000
Grand Opening Advertising	$30,000
Additional Funds – 6 Months	$40,000 – $75,000
Total	$277,000 – $463,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

• For a Single Store Franchise Agreement, the fee is $30,000.
• Under a Multi-Unit Development Agreement (MUDA) which allows the opening of up to 3 stores, the total fee is $69,500. This is broken down as $30,000 for the first Franchise Agreement, $24,500 for the second, and $15,000 for the third.

Royalty Fee

Franchisees are required to pay a weekly royalty fee of 6% of Net Sales.

Marketing/Advertising Fee

The franchisees must contribute the greater of $300 or 5% of the weekly Net Sales to the Advertising Fund.

Technology Fee

Franchisees must pay a Technology Fee of 1% of their Net Sales weekly, not to exceed $70 per week.

Transfer Fees

A transfer fee of $5,000 is required for the first franchised business, and $1,000 for each additional franchise or license transferred simultaneously.

Renewal Fees

The renewal fee is $5,000 if a franchisee owns fewer than three stores, or $3,500 if they own three or more.

Franchise pros and cons

The Pros:

• Pre-opening training: The franchisor offers its franchisees a detailed on-the-job and classroom training curriculum. It trains them about the business system, including launching their salons, operations, equipment use and hiring the right staff.
• Third-party financing: Sport Clips offers its franchisees financing through third-party lenders. Franchisees get funding for startup costs, franchise fees, equipment, inventory and payroll.
• Site selection and build-out: The franchisor provides the franchisees with site selection assistance to identify a viable salon location in terms of traffic and growth demographics. Also, it helps them in the construction and set-up of the salons.
• Stylist recruitment guidance: The brand offers franchisees assistance in hiring, training and retaining the best talents to run their salons.
• Marketing plans: Sport Clips has an experienced marketing and advertising team to help its franchisees promote their businesses and public relations. Franchisees can leverage the brand’s popularity and other promotional tools such as national media, social marketing, email marketing and personalized local salon advertising programs.
• Part-time business: The franchise can be operated on a part-time basis as a side business. Franchisees get the freedom and flexibility of owning a business and can achieve a good work-life balance.
• Extensive support and ongoing coaching: The brand has an experienced team to help franchisees establish and run their salons successfully. Franchisees get help with a proven business model, professional business directors, a network of successful business partners and field coaches.
• Recession-resistant concept: Sport Clips provides franchisees with stability, confidence and growth potential. It focuses on the underserved market which helps franchisees to scale and grow into multi-units fast.
• Manager-run: The franchise allows for absentee ownership. Franchisees can employ managers who are actively involved in the salon’s daily activities as the owners concentrate on growing to multiple units. Therefore, franchisees don’t have to leave their day jobs.

The cons:

• Not a home-based or mobile business: A Sport Clips business cannot be operated from home or a vehicle. Franchisees need to have a fixed office space, retail facility or warehouse.
• No Exclusive Territory Protection: The franchisor does not grant its franchisees an exclusive protected area to operate in. The franchisees may face competition from franchises granted by the parent company or from competitive channels and brands it controls.
• Competition: The franchise faces stiff competition from brands such as Great Clips, Cost Cutters, Fantastic Sam’s and Hair Cuttery.

How to open a Sport Clips Franchise

Opening a Sport Clips franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Sport Clips franchise.

1. Initial Investment & Licenses

• Understand the total investment required, ranging from $266,300 to $439,500.
• Plan to purchase a minimum of three licenses with a franchise fee of $69,500 for the first three.

2. Financial Requirements

• Ensure you have at least $200,000 in liquid assets and a net worth of $400,000.

3. Franchisee Engagement

• Be prepared for active engagement in your business, with an average of 10-15 hours weekly spent on management tasks.

4. Location & Training

• Work with Sport Clips to find an ideal location and complete comprehensive training for you, your manager, and stylists.

Disclaimer

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