Great Clips Franchise Cost & Fees

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Description

Year Business Began: 1982Franchising Since: 1983Headquarters: Minneapolis, MinnesotaEstimated Number of Units: 4,285Franchise Description: Great Clips, Inc. is the franchisor. 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 and using distinctive trade dress and business methods prescribed by the franchisor.Training Overview: The franchisor provides training to franchisees, their management staff, and their stylists. Franchisees must attend and complete all then-current training requirements described in the Operations Manual within the time frame established by the franchisor. There are currently no refresher courses required, but franchisees may re-attend all or portions of the Great Clips training programs at no additional charge other than travel and living expenses. Franchisees 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) The QuickConnect Training Program for Franchisees, (2) The Great Clips Academy Training (3) LEADS for Management Staff, (4) In-Salon Training. Territory Granted: Franchisees will conduct the Great Clips business at an Authorized Location by establishing and operating the Salon as provided in the Franchise Agreement. The franchisor will grant to franchisees a Protected Area consisting of a circular area defined by a radius of three-quarters of a mile from the primary customer entrance of the Salon. The franchisor agrees that, except as it relates to Non-Traditional Locations, 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 franchisees 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 the franchisor in advance of the Salon opening. If the location of the Salon is determined by the franchisor to be a non-traditional site, the Protected Area will be determined by Great Clips at the time of the designation. Obligations and Restrictions: Franchisees must devote their best efforts to the management and operation of the Great Clips business, and must manage or operate the Salon on a regular basis through Designated Operator(s) or a manager who has successfully completed the Great Clips Academy andManagement Training Programs. The franchisee’s management staff and stylists must successfully complete all required training within the time frame designated by the franchisor. Franchisees and their spouse are obligated under the Franchise Agreement not to engage in or be connected with or participate in or consult with or share the earnings or profits of, or lease property to any other business or activity that competes with the Great Clips business at any location, including any retail haircare or personal grooming business, spa, beauty school, barber school, cosmetology school, or any business selling hair products during the term of the franchise, for one year after the expiration or termination of the Franchise Agreement at any location within five miles of any Great Clips salon or over the Internet, or for one year after they have assigned their interest in the Franchise Agreement anywhere within five miles of any Great Clips salon, subject to state law requirements. Franchisees may only offer inventory items and services designated by the franchisor and franchisees must offer the full range of services and required inventory authorized by the franchisor.Term of Agreement and Renewal: The length of initial franchise term 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.Financial Assistance: Neither the franchisor, its agents, nor its affiliates offer financing arrangements for the purchase of a franchisee’s Salon. The franchisor may offer financing arrangements in the future depending on interest rates, availability of funds and other economic factors. The franchisor does not receive any payments from any company for the placement of financing. The franchisor 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, the franchisor may, in its sole business judgment, may guaranty a loan for a franchisee under limited circumstances and based upon certain criteria established by the franchisor. Great Clips franchisees who apply for SBA loans will receive the benefits of a streamlined loan process by virtue of its listing on the Franchise Registry and the Uniform Franchisor Addendum that must be signed in connection with an SBA loan. Investment Tables: Estimated Initial Investment 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 Architecture Fees $250 $3,500 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 Freight $2,000 $6,000 Sales Tax on Fixtures, Signage and Furnishings $0 $2,500 Opening Inventory and Supplies $4,700 $6,400 Grand Opening Advertising $20,000 $25,000 Insurance $1,600 $2,500 Lease Liability Fee $0 $1,500 Lease Review Fee $850 $3,350 Additional Funds (6-12 months) $15,000 $50,000 ESTIMATED TOTAL $136,900 $258,250 Other Fees 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. Great Clips University 1) The Great Clips Academy 2) LEADS for Management Staff 3) Great Clips University Courses, Tools, 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 $240 per salon Insurance Coverage $1,600-$2,500 per year. Software License Fee and Support Fee $155 per month; $25 per telephone call. Network and Hardware Service & Support Fee $10 per month Mobile Device Management Licensing Fee $51 per year Aerohive Router License Fee $50 Aerohive Router Warranty Fee $28 per year TotalCare Replacement Service Fee $73 for three years Other Technology Fees Fees associated with the reconfiguration of salon technology are payable to Foundation Technologies, LLC, known as The Foundation, when an existing salon is purchased to transfer ownership and technology support includes but is not limited to: $75 per Aerohive router $30 per salon iPad Credit Card Processing Fee $25 Application Processing Fee; $.0225 per transaction. Gift Card Processing Fee $0.0095 per transaction. Lease Liability Fee $0-$1,500 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 Architectural Fees $300-$650 The above information has been taken from the FDD of Great Clips. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
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.
Great Clips University
1) The Great Clips Academy
2) LEADS for Management Staff
3) Great Clips University Courses, Tools, 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 $240 per salon
Insurance Coverage $1,600-$2,500 per year.
Software License Fee and Support Fee $155 per month; $25 per telephone call.
Network and Hardware Service & Support Fee $10 per month
Mobile Device Management Licensing Fee $51 per year
Aerohive Router License Fee $50
Aerohive Router Warranty Fee $28 per year
TotalCare Replacement Service Fee $73 for three years
Other Technology Fees Fees associated with the reconfiguration of salon technology are payable to Foundation Technologies, LLC, known as The Foundation, when an existing salon is purchased to transfer ownership and technology support includes but is not limited to: $75 per Aerohive router $30 per salon iPad
Credit Card Processing Fee $25 Application Processing Fee; $.0225 per transaction.
Gift Card Processing Fee $0.0095 per transaction.
Lease Liability Fee $0-$1,500
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
Architectural Fees $300-$650