Supercuts Franchise Cost & Fees

SKU: 7701e3771dc3 Categories: , Tag:

Description

Year Business Began: 1976 Franchising Since: 1979 Headquarters: Minneapolis, MinnesotaEstimated Number of Units: 2,665 Franchise Description: The franchisor’s name is Supercuts, Inc. The franchisee will have the right to own and operate a retail hair care establishment providing haircutting and related services under the Supercuts mark and other distinctive marks. Training Overview: The franchisor’s offers its customary initial training course for the operation of a Supercuts store. Franchisees may have one additional person who is employed in a managerial capacity (e.g., general or assistant managers) attend this training course at no additional charge at the same time they attend. Training is held at Supercuts’ corporate offices (or another location the franchisor designates). Franchisees must complete this initial training course to the franchisor’s satisfaction. All new Supercuts stylists must attend a hairstylists academy training course/certification for five days. All store managers must attend Managers Training, which generally requires between 2 and 5 days to complete. Although not required by the Franchise Agreement, the franchisor intends, whenever possible, to give franchisees other pre-opening assistance, including in the areas of site selection and construction consultation. The franchisor offers to all employees of the franchisee recertification courses each year regarding the uniform haircutting techniques used by all Supercuts stores. The franchisor also offers an annual franchise convention each year for its franchisees which they shall attend. Territory Granted: The Franchise Agreement does not grant franchisees any territory, whether exclusive or non-exclusive. The Franchise Agreement grants franchisees the limited right and license to operate one Supercuts Store at a specific location that the franchisor must approve within a specific Designated Marketing Area (DMA). The DMA’s size will vary among prospects and, for example, may be one or more counties in rural areas or a portion of a statistical area in heavily populated major cities.Obligations and Restrictions: Although Supercuts strongly encourages direct personal involvement, the franchisor does not require that franchisees participate personally in the day-to-day operation of the Supercuts store. It is the franchisor’s policy, however, that the Supercuts store must at all times be under the direct, on-premises supervision of a manager (who may be the franchisee) who has completed the training program and devotes his/her entire time during business hours to managing the store. Franchisees must offer all products and services that Supercuts uniformly requires of all Supercuts stores. Franchisees may not offer or sell any products or services that the franchisor does not authorize or use the premises for any purpose other than the operation of Supercuts store.Term of Agreement and Renewal: Provided the lease or sublease has not expired and the franchisee is in good standing and not in default of any of the relevant agreements, the term extends indefinitely. Financial Assistance: Except as described, the franchisor does not offer direct or indirect financing or guarantee a franchisee’s note, lease, or obligation. In virtually all cases, franchisees must sublease the store’s premises directly from the franchisor, which will sign the “master lease” with the landlord. The franchisor has a written arrangement with ProPoint Solutions, LLC (ProPoint) by which ProPoint, an unaffiliated company, leases franchisees the store’s point-of-sale system (hardware and software). Franchisees and ProPoint will sign a separate POS System Rental Agreement, which runs for a five year period. The franchisor does not sell, assign, or discount to a third party all or part of any financing arrangement. Neither the franchisor nor any of its affiliates receives any consideration from ProPoint due to the arrangement. Investment Tables: Estimated Initial Investment Name of Fee Low High Development/ Franchise Fee $10,000 $29,500 Leasehold Improvements $60,000 $120,000 Furniture, Equipment & Supplies $25,000 $50,000 Construction Management Services Fee $0 $5,000 Computer Software (Point of Sale System) $1,680 $3,600 Computer Hardware/Installation and Onsite Training$3,700$5,000 Opening Inventory $5,000 $10,000 Hairstylists Academy (HSA) Training Fees (for 6 to 8 people) $1,440 $1,920 Travel and Living during Franchisee Orientation Training $2,050 $4,500 One Month’s Rent and Security Deposit $4,000 $12,000 Grand Opening Plan Assistance $2,500 $2,500 Grand Opening Advertising Expenses $10,000 $15,000 Signs $4,000 $8,000 Additional Funds (3 months) $15,000 $30,000 Total Estimated Initial Investment (including initial lease costs) $144,370 $297,020 Other Fees Type of Fee Amount Royalty Fees For new stores the combined service and merchandise royalty fee is 4% of combined net service revenue and net merchandise revenue from the open date until the first-year anniversary. From first-year anniversary until the Franchise Agreement expires or is terminated, the royalty fee is 6% of combined net service revenue and net merchandise revenue. Advertising Fees 5% of net monthly service revenues (i.e. except merchandise sales) with a potential rebate if 75% of Stores in specific DMA vote in favor of rebate. Product and Service Purchases Varies. Hairstylists Academy (HSA) Additional Training $240 (for 5 days) per each new stylist at Supercuts’ discretion; training fee will increase every 5 years, commencing January 1, 2007, by the Consumer Price Index (CPF) increase for the 5-year period plus 1%. Managers’ Training Course A portion of the cost of facilities, materials and audio visual equipment for training related to duties. In Supercuts’ most recent fiscal year, the cost ranged from $54 to $290 per attendee. Anniversary Fee (essentially a “renewal” fee) 1% of total net monthly revenues for 12 full months immediately preceding first 10 year anniversary. For second 10-year anniversary and every 10 years thereafter, 2% of total net monthly revenues for 12 full months immediately preceding such anniversary date. Transfer Fee 1 store: $2,5002 stores: $4,5003 stores: $6,0004 stores: $7,0005 stores: $7,500Each store thereafter is $500 Lease Renewal Fee$1,500 Sublease Payments $2,000 – $6,000 per month. Lease Defaults Varies under circumstances and depends on nature of default. Audits All unpaid fees, cost of audit plus interest at highest allowable rate not to exceed 18% per annum from date due. Late Payments 18% per annum minimum, not to exceed highest applicable commercial contract rate under applicable state and/or federal law. Modernization $35,000 adjusted for inflation (not to exceed 2% per year), spent on capital improvements to modernize and update store location [Note: $35,000 may not represent the entire costs of a complete remodeling; this covers only updating the décor and partial remodeling] Gift Card Transactions $45 per download software download fee and $15 per terminal annual software maintenance fee (both if the franchisee supplies their own terminal device); per transaction fees range from $.0225 to $.07; nonsufficient funds recovery fee of $.05 per card Indemnification Varies under circumstances and depends on nature of claim. Maintenance Cost Reimbursement Out-of-pocket cost reimbursement. Costs and Attorney’s Fees Varies under circumstances and depends on nature of the franchisee’s non-compliance. The above information has been compiled from the FDD of Supercuts. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty Fees For new stores the combined service and merchandise royalty fee is 4% of combined net service revenue and net merchandise revenue from the open date until the first-year anniversary. From first-year anniversary until the Franchise Agreement expires or is terminated, the royalty fee is 6% of combined net service revenue and net merchandise revenue.
Advertising Fees 5% of net monthly service revenues (i.e. except merchandise sales) with a potential rebate if 75% of Stores in specific DMA vote in favor of rebate.
Product and Service Purchases Varies.
Hairstylists Academy (HSA) Additional Training $240 (for 5 days) per each new stylist at Supercuts’ discretion; training fee will increase every 5 years, commencing January 1, 2007, by the Consumer Price Index (CPF) increase for the 5-year period plus 1%.
Managers’ Training Course A portion of the cost of facilities, materials and audio visual equipment for training related to duties. In Supercuts’ most recent fiscal year, the cost ranged from $54 to $290 per attendee.
Anniversary Fee (essentially a “renewal” fee) 1% of total net monthly revenues for 12 full months immediately preceding first 10 year anniversary. For second 10-year anniversary and every 10 years thereafter, 2% of total net monthly revenues for 12 full months immediately preceding such anniversary date.
Transfer Fee 1 store: $2,500
2 stores: $4,500
3 stores: $6,000
4 stores: $7,000
5 stores: $7,500
Each store thereafter is $500
Lease Renewal Fee $1,500
Sublease Payments $2,000 – $6,000 per month.
Lease Defaults Varies under circumstances and depends on nature of default.
Audits All unpaid fees, cost of audit plus interest at highest allowable rate not to exceed 18% per annum from date due.
Late Payments 18% per annum minimum, not to exceed highest applicable commercial contract rate under applicable state and/or federal law.
Modernization $35,000 adjusted for inflation (not to exceed 2% per year), spent on capital improvements to modernize and update store location [Note: $35,000 may not represent the entire costs of a complete remodeling; this covers only updating the décor and partial remodeling]
Gift Card Transactions $45 per download software download fee and $15 per terminal annual software maintenance fee (both if the franchisee supplies their own terminal device); per transaction fees range from $.0225 to $.07; nonsufficient funds recovery fee of $.05 per card
Indemnification Varies under circumstances and depends on nature of claim.
Maintenance Cost Reimbursement Out-of-pocket cost reimbursement.
Costs and Attorney’s Fees Varies under circumstances and depends on nature of the franchisee’s non-compliance.