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FDD Talk 2013: Statement of Gross Sales and Expense Reports for Certain Sport Clips Salons (2013 FDD)

by Franchise Chatter on June 25, 2013

in Franchise Earnings, Salon Franchise



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Highlights of Sport Clips’ Item 19 Financial Performance Representations (2013 FDD)

Explanatory Notes for Section 1 – Statement of 2012 Gross Sales

  • At the end of calendar year 2012, there were 976 franchised Sport Clips stores.
  • The two Statements of Gross Sales below do not include four stores in Rochester, New York, which are not typical Sport Clips stores and operate under a special limited services license agreement that is not offered to new franchisees. Although the franchisor does not have complete sales data for the stores in Rochester, New York, it knows that their gross sales are, on average, less than other stores in the System.
  • Except for the stores in Rochester, New York, all stores included in the Statements of Gross Sales did not receive any services that were not generally available to other Sport Clips stores, and each store offered similar products and services as would generally be offered by a typical Sport Clips store.

Sport Clips Guys-Watching-SportsStatement of Gross Sales for All Sport Clips Stores in Continual Operation for the Entire Calendar Years 2010, 2011, and 2012 (634 units)

  • The gross sales figures included in the first Statement of Gross Sales below are based upon all 634 Sport Clips franchise stores and company-owned stores that were in continual operation for the entire calendar years 2010, 2011, and 2012. The gross sales figures are taken directly from gross sales reports made by the stores to the company.

Statement of Gross Sales for All Sport Clips Stores in Continual Operation for the Entire Calendar Years 2011 and 2012 (733 units)

  • The gross sales figures included in the second Statement of Gross Sales below are based upon all 733 Sport Clips franchise stores and company-owned stores that were in continual operation for the entire calendar years 2011 and 2012. The gross sales figures are taken directly from gross sales reports made by the stores to the company.
  • The financial performance representation figures do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from gross revenue or gross sales figures to obtain your net income or profit.

Explanatory Notes for Section 2 – Expense Reports for Company-Owned Stores During 2012

Expense Report for Company-Owned Stores in Austin, Texas (14 units)

  • The Expense Report below shows the average expenses at each store’s sales level and those expenses as a percentage of total revenue. It is based on 14 stores owned and operated by the company in Austin, Texas for the entire calendar year 2012.

Expense Report for Company-Owned Stores in Las Vegas, Nevada (8 units)

  • Sport Clips owns and operates 10 stores in the Las Vegas market, including one store that it opened in March 2012 and one store that it opened in July 2012. Sport Clips is not offering franchises in this market.  Results for the stores opened in March 2012 and July 2012 are not included in the data below as they were not open during all of fiscal year 2012.
  • While the results of the 8 Las Vegas stores are less favorable than for its Austin area stores, the Las Vegas economy was one of the worst, if not the worst, in the country in 2012. Sport Clips is very optimistic about the Las Vegas market long-term, and sees the current downturn in the economy as an opportunity for Sport Clips to strengthen its market position and increase its market share.

Comments for Both Groups (Austin, Texas and Las Vegas, Nevada Stores)



  • The managers of the company-owned stores included in the Expense Report did not receive any services that were not generally available to all Sport Clips stores.
  • Each store offered similar products and services as would generally be offered by a typical Sport Clips store, except for limited test of procedures, products, and/or services that may or may not be eventually incorporated into the system, depending on the success of the tests.
  • Variable Costs include operating supplies, cost of goods sold, bank service charges, credit card discounts, and advertising to recruit Stylists.
  • Payroll includes direct payroll, including payroll for an on-site full-time manager, payroll taxes, and fringe benefits, except 401K and medical insurance costs.
  • Occupancy includes rent, pass-through expenses from the landlord, utilities, phone charges, and repairs and maintenance.
  • Advertising includes the weekly payments to the Ad Fund plus other advertising and marketing expenses for the store.
  • Miscellaneous expense includes magazine subscriptions, store insurance, and overages and/or shortages from the cash drawer.
  • Operating Profit does not include an amount paid for royalties or weekly training fees. The numbers in the expense reports are unaudited, but Sport Clips believes that these numbers are substantially correct.

Section 1 – Statement of 2012 Gross Sales

Statement of Gross Sales for All Sport Clips Stores in Continual Operation for the Entire Calendar Years 2010, 2011, and 2012 (634 units)



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