This post was updated on December 25, 2016 to reflect information from Supercuts’ 2016 FDD (Item 7).
Detailed Estimates of Supercuts Franchise Costs Based on Item 7 (Estimated Initial Investment) of Supercuts’ 2016 Franchise Disclosure Document
- The table below assumes that you will develop a new Supercuts Store. If you are interested in purchasing a particular company-owned Store or affiliated branded salon, then Supercuts and its subsidiary (or the applicable affiliate) and you will negotiate the appropriate purchase price.
- During the fiscal year ended June 30, 2016, the highest purchase price paid by a franchisee for an existing company-owned Supercuts Store (acquired to be operated as a franchise) was $60,000, and the highest purchase price paid by a franchisee for an affiliated branded salon for conversion to a Supercuts Store (acquired to be operated as a franchise) was $60,000. Purchase prices might include upgrading or conversion costs.
1. Development Fee/Franchise Fee: $10,000 to $29,500
2. Leasehold Improvements: $60,000 to $120,000
- You must make certain modifications and leasehold improvements to your Store’s premises according to Supercuts’ Architectural Design Manual. Supercuts must approve all plans and specifications, which must be prepared by a firm Supercuts approves. You must strictly comply with the Architectural Design Manual and approved plans and specifications.
- Supercuts estimates that leasehold improvement costs, including architectural fees, will be between $60,000 to $120,000 for a 900 to 1,200 square foot Store, depending upon the Store’s exact size; its geographic location; if your landlord assumes some of the build-out costs in the form of either cash or free rent; the cost of construction materials such as steel, drywall, and flooring; and structural components and overall condition of the premises.
3. Furniture, Fixtures, and Equipment: $25,000 to $50,000
- You must pay for the Store FF&E that Regis (the franchisor) arranges for you to purchase, plus shipping and handling. Regis’s coordination of your purchase of the Store FF&E is included in its full construction management services.
- You also must pay for the Store FF&E that Regis arranges for you to purchase, plus shipping and handling, if you use Regis’s FF&E coordination services but not its full construction management services.
4. Construction Management Services Fee: $0 to $5,000
- If you want Regis to supervise and oversee your Store’s construction process, you must pay Regis a $5,000 fee when you sign its Construction Management Services Agreement.
5. Computer Software (Point-of-Sale System): $1,680 to $3,600 ($140 to $300 per month for first 12 months)
6. Computer Hardware/Installation and On-Site Training: $3,700 to $5,000
- Your costs for the computerized point-of-sale system’s computer hardware and software include installation costs and will depend on the specific type of hardware acquired, geographic location, and other economic factors.
7. Opening Inventory: $5,000 to $10,000
8. Hairstylists Academy (HSA) Training Fees (for 6 to 8 people): $1,350 to $1,800
9. Travel and Living Expenses During Franchisee Orientation: $2,050 to $4,500
10. One Month’s Rent and Security Deposit: $4,000 to $12,000
- You will typically sublease your Store’s premises from Supercuts. Typical franchise locations are 900 to 1,200 square feet, include 6 to 8 workstations, and are located in large retail developments and heavily populated business areas.
- Rent is estimated to be between $2,000 and $6,000 per month.
- Prepaid rent due when the lease is signed might be required and typically is the first month’s rent. A security deposit approximately equal to one month’s rent also might be required.
11. Grand Opening Plan Assistance: $2,500
- New franchisees opening their first Supercuts Store must pay Supercuts the Grand Opening Plan Assistance fee. This fee is a one-time investment to develop the Grand Opening Plan for your first Supercuts Store.
- You will work with a dedicated Grand Opening Plan Director to customize the plan for your specific location and market.
12. Grand Opening Advertising Expenses: $10,000 to $15,000
- Grand opening advertising expenses are $10,000 per Store opening and are contractually required for both new and existing franchisees opening a first Store in a DMA.
- You may decide, based on your market conditions, that spending more than $10,000 on grand opening advertising is necessary to produce an effective grand opening. Supercuts recommends that you spend between $12,000 and $15,000 on grand opening advertising expenses.
13. Signs: $4,000 to $8,000
14. Additional Funds (3 months): $15,000 to $30,000
- This estimates the funds needed to cover your initial expenses for the first 3 months of operation (besides the items identified separately in the table). It includes payroll costs but not any owner’s draw or salary.
- Supercuts relied on its approximately 29 years of experience developing, operating, and franchising Supercuts Stores to compile this Additional Funds estimate.
15. Estimated Initial Investment (including initial lease costs): $144,280 to $296,900