Supercuts Franchise FDD, Profits, Costs & Fees (2024)
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.
Initial Investment
How much does it cost to start a Supercuts franchise? It costs on average between $185,000 – $318,000 to start a Supercuts franchised facility.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of salon you choose, the location, and whether the franchisee chooses to lease or purchase the property.
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 |
Average Revenue (AUV)
How much revenue can you make with a Supercuts franchise? A Supercuts franchised salon makes on average $271,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
This compares to $343,000 yearly revenue for similar hair salon franchises. Below are 10 Supercuts competitors as a comparison:
Supercuts Franchise Disclosure Document
Recent Legal Disputes and Litigation
Supercuts, a popular hair salon franchise, has faced legal disputes involving its franchisees in recent years. One significant case arose in 2020 when franchisees filed a lawsuit against Supercuts’ parent company, Regis Corporation. The franchisees alleged that the company had breached its franchise agreements by failing to provide adequate operational support, particularly during the challenging COVID-19 pandemic.
The plaintiffs claimed that Regis Corporation did not provide sufficient marketing assistance or financial relief when salon closures and restrictions severely impacted business operations. Additionally, franchisees argued that the company’s focus shifted toward corporate-owned stores, leaving franchisees without the necessary resources to compete effectively in the market. This led to widespread dissatisfaction among franchisees, who felt abandoned during a critical period.
Another key issue involved the management of franchisee royalties and fees. Franchisees accused the company of continuing to demand full royalty payments despite the significant drop in revenue caused by the pandemic. This added financial pressure resulted in several franchisees struggling to stay afloat.
In response, Regis Corporation denied the claims, stating that it had taken appropriate actions to support franchisees and maintain the brand’s operations. The legal battle shed light on the growing tension between the corporation and its franchise network, especially in times of crisis.
This lawsuit underscores the importance of transparent communication and strong corporate support within franchise systems, particularly when external factors, such as economic downturns, disrupt normal business operations. Franchisees considering Supercuts should be aware of the legal challenges faced by other owners and ensure they fully understand the terms of their franchise agreement.
Frequently Asked Questions
How many Supercuts locations are there?
As of the latest data, there are over 2,400 Supercuts locations across the United States, Canada, and the United Kingdom. These locations are a mix of franchised and company-owned salons, with Supercuts being one of the largest hair salon chains in the industry.
What is the total investment required to open a Supercuts franchise?
The total investment required to open a Supercuts franchise ranges from $185,000 to $318,000.
What are the ongoing fees for a Supercuts franchise?
Supercuts franchisees are required to pay a 6% royalty fee on gross sales. Additionally, there is an advertising fee of 5% of gross sales, which contributes to national and local marketing efforts. These ongoing fees help maintain brand consistency and support the marketing initiatives that drive traffic to Supercuts salons across all locations.
What are the financial requirements to become a Supercuts franchisee?
To become a Supercuts franchisee, candidates must meet specific financial requirements. The minimum net worth required is $1.5 million, with at least $500,000 in liquid capital. These financial criteria ensure that franchisees have the necessary resources to invest in the business and cover startup costs, as well as ongoing operational expenses.
How much can a Supercuts franchise owner expect to earn?
The average gross sales for a Supercuts franchise are approximately $0.27 million per location. Assuming a 15% operating profit margin, $0.27 million yearly revenue can result in $40,650 EBITDA annually.
Who owns Supercuts?
Supercuts is owned by Regis Corporation, a global leader in the hair care industry. Regis Corporation owns and operates several salon brands, with Supercuts being one of its most prominent franchises. The company manages both franchised and corporate-owned locations under the Supercuts brand.
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