Supercuts Franchise Costs $185K – $318K (+ 2024 Profits)

Supercuts, a notable name in the hair salon industry, was established in 1975 by Geoffrey M. Rappaport and Frank E. Emmett in the San Francisco Bay Area, specifically in Albany, California. The franchise began expanding in 1979, solidifying its presence in the competitive hair care market. Today, it operates as a subsidiary under Regis Corporation, a giant in the beauty salon and cosmetology education sector.

Supercuts has grown substantially over the years across the United States with its headquartered in Minneapolis, Minnesota. The franchise is recognized for its innovative approach to hair care, offering quick and inexpensive haircuts without appointments, catering to the everyday needs of its clientele.

This operational model has allowed Supercuts to stand out in a marketplace filled with traditional barbershops and high-fashion salons. The brand’s growth is attributed not only to its service model but also to its comprehensive franchise system which includes full operating, marketing, and financial systems. This enables franchisees to focus on scaling their Supercuts stores effectively.

Type of Expenditure	Amount
Development Fee/Franchise Fee	$40,000
Leasehold Improvements	$60,000 – $120,000
Furniture, Fixtures & Equipment	$25,000 – $50,000
Construction Management Services Fee	$6,000
Construction and Design Plan Review	$1,000
Post Build Review	$2,000
Computer Software (Point of Sale System)	$2,000
Computer Hardware/Installation and Onsite Training	$2,000
Opening Inventory	$5,000 – $10,000
Hairstylists Academy (HSA) Training Fees	$1,000 – $2,000
Travel and Living Expenses during Franchisee Orientation Training	$2,000 – $5,000
One Month’s Rent and Security Deposit	$4,000 – $12,000
Grand Opening Advertising Expenses	$10,000
Signs	$6,000 – $12,000
Professional Fees	$6,000 – $12,000
Additional Funds (3 months)	$15,000 – $30,000
Total Estimated Initial Investment	$185,000 – $318,000

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

The initial franchise fee for opening a Supercuts store is $39,500, payable in a lump sum upon the execution of the franchise agreement .

Monthly Royalty Fee

For new stores, a combined service and merchandise royalty fee is 4% of net revenue from opening date until the first year anniversary. After the first year, the royalty fee increases to 6% of net revenue.

Advertising Fees

The advertising fee is 5% of net monthly service revenue, with potential rebates under certain conditions.

Transfer Fee

Transfer fees vary based on the number of stores being transferred, starting at $2,500 for one store and increasing with each additional store, with each store after the fifth costing an additional $500.

Lease Renewal Fee

A lease renewal fee of $1,500 is due immediately upon the execution of the lease renewal.

Anniversary Fee

Commencing on the tenth anniversary of your Store opening date, an Anniversary Fee of 1% of the franchisee’s cumulative net monthly revenues for the trailing twelve months prior to the anniversary month is assessed. This fee increases to 2% for each subsequent 10-year period.

Lease Guaranty Fee

If Supercuts guarantees your lease, a monthly lease guaranty fee is applicable, calculated as the amount by which twelve percent of your monthly gross sales exceeds your monthly lease payments.

Franchise pros and cons

The Pros:

• Quality pre-opening training: Supercuts provides its franchisees with detailed training modules to equip them with the basics of the business and how to operate a successful salon. Franchisees are trained in business management, customer service and by recruiting the best managers and stylists.
• Third-party financing: The brand offers its franchisees financing through third-party lenders for the franchise fee, startup costs, equipment, inventory and payroll.
• Site selection and construction: The franchisor helps franchisees identify the best salon location concerning traffic and population demographics. In addition, it provides them assistance with design layouts, construction, maintenance, equipment acquisition and lease negotiation.
• Multiple revenue channels: The brand provides franchisees with a variety of income streams to improve their bottom lines. This is through extended salon services and hair care product sales.
• Extensive operational support: Supercuts offers its franchisees professional corporate support and ongoing mentorship to run their salons effectively. Franchisees get a proven business system, periodic franchise reviews, valuable growth strategies and timely procedural and service updates.
• Solid marketing strategies: The brand offers its franchisees comprehensive marketing guidance and resources to help them attract and retain large customer traffic. Franchisees get cutting-edge digital and social media marketing techniques, traditional advertising, web development and personalized local salon marketing tools.
• Customer convenience: The brand is known for its quick, innovative 20-minute haircuts for walk-in and appointment customers which makes them stand out from the competition.

The cons:

• No exclusive territory protection: The brand does not allow franchisees the right to operate in a protected area. Franchisees may face rivalry from channels and affiliate brands granted or controlled by the parent company.
• No absentee ownership: The franchise does not present a passive investment opportunity. Franchisees must be fully involved in the day-to-day operations of their salons.
• Not a home-based business: A Supercuts franchise cannot be operated from home or a mobile unit. It requires franchisees to have an office space, retail facility, or warehouse to operate from.
• Competition from other leading hair salon franchises like Great Clips & Fantastic Sam’s.

How to open a Supercuts franchise

Opening a Supercuts 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 Supercuts franchise.

1. Assess Your Financial Capability

• Ensure you meet the financial requirements: a minimum of $80,000 in liquid capital and a net worth of $500,000.
• Be prepared for a total investment of approximately $200,000.

2. Conduct Thorough Research

• Understand the Supercuts brand, its market position, and how it differentiates from competitors.
• Research the support and training Supercuts provides to franchisees, as well as the brand’s growth and performance in the hair care industry.

3. Submit a Franchise Inquiry

• Reach out to Supercuts or Regis Corporation to express your interest in opening a franchise.
• Fill out any necessary inquiry forms to provide your financial information and business background.

4. Review the Franchise Disclosure Document (FDD)

• Carefully read the FDD provided by Supercuts to understand the franchise agreement, fees, obligations, and rights.
• Consider consulting with a franchise attorney to navigate the legal details of the FDD.

5. Attend a Discovery Day

• Participate in a Discovery Day to meet the corporate team, learn about the operational model, and gain insights into the day-to-day running of a Supercuts salon.

6. Secure Financing (if necessary)

• Explore financing options if you don’t have the required capital upfront. Supercuts offers financing via third-party affiliates.
• Factor in the costs for the franchise fee, equipment, leasehold improvements, and working capital.

7. Finalize Location and Lease Agreements

• Work with Supercuts to identify a suitable location for your salon.
• Engage in lease negotiations with the guidance of the Supercuts real estate team.

8. Complete Supercuts Training Program

• Undergo the training program offered by Regis Corporation, covering business management, customer service, and recruiting.
• Ensure your staff, especially your managers and stylists, also receive the necessary training.

Disclaimer

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