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FDD Talk: The Supercuts Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on February 17, 2016

in FDD Talk 2017: Salon Franchises, Franchise Earnings, Salon Franchise



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Supercuts Salon Photo by RetailbyRyan95

In this FDD Talk post, you’ll learn the following:

  • Section I – Background information on the Supercuts franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Supercuts franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Supercuts’ financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • average gross sales during the 12-month period ending June 30, 2015 for the top third, middle third, bottom third, and all 979 franchised Supercuts Stores operating throughout the United States that were open for at least 2 full years as of July 1, 2014, the beginning of the 12-month period for which the numbers were calculated (meaning that the Stores were open for at least 3 full years as of June 30, 2015)
  • average gross sales during the 12-month period ending June 30, 2015 for the top third, middle third, bottom third, and all 980 Supercuts-owned Stores operating throughout the United States that were open for at least 2 full years as of July 1, 2014
  • average service sales, product sales, total revenues, labor, occupancy, product costs, continuing franchise fees, advertising, other expenses, total expenses, and operating cash flow during the 12 month-period ending June 30, 2015 for the top third, middle third, bottom third, and all 980 Supercuts-owned Stores operating throughout the United States that were open for at least 2 full years as of July 1, 2014

Section I – Background Information

Supercuts’ Rise Continues With No. 3 Ranking in Franchise 500

Supercuts continues to excel after the 2012 rehaul that brought in new leadership and recruitment tactics and revamped the franchising program for parent company Regis Corp.

The chain jumped to No. 3 on Entrepreneur’s Franchise 500 list, announced in January 2016, and is No. 1 in the hair-care category. It’s another step up for the popular chain, which was ranked No. 5 in 2013, No. 4 in 2014 and No. 5 in 2015.

Prior to the 2012 resurgence, Supercuts rose from No. 29 in 2009 to enjoy back-to-back years at No. 5 in 2010 and 2011, but the chain fell to No. 14 in 2012 before its comeback.

Supercuts has steadily increased its franchise numbers in the past several years and has had success in landing multi-unit franchisees and paving the way for them to more swiftly open their locations. The chain stands out for its 85 full-time trainers who travel among the units, helping employees improve their technical skills and customer-service talents.

Headquarted in Minneapolis, Minnesota, Supercuts serves 33 million customers each year at more than 2,400 stores.

First Location Still Operating

The chain was founded by Geoffrey Rappaport and Frank Emmett in 1975 in Albany, California, to offer consumers quick, cheap haircuts with no appointments necessary. They could get a simple haircut with the same ease as stopping into a retail store and doing a brief bit of shopping. The first location is still in operation.

Franchising began in 1979. Supercuts offers a veteran incentive of a $2,500 franchise fee rebate on the first store.

Regis Corp. Added Supercuts Chain in 1996

Regis Corp. acquired Supercuts in 1996; Regis also franchises Cost Cutters Family Hair Care, City Looks and Pro-Cuts in the United States and First Choice Haircutters and Magicuts in Canada. Supercuts is franchised in the United States, Canada, Puerto Rico and the United Kingdom. Regis Corp. is led by CEO Dan Hanrahan, who was recruited from his former role as president and CEO of Celebrity Cruises.

Supercuts franchisees do not need to be hair-styling professionals and do not have to be on site. The stores can be run by managers, which enables some franchisees to keep their full-time jobs while growing their new businesses.

The salons offer more than low-cost haircuts, also providing hair color services, tea tree scalp massages, and waxing services.

One Million Online Check-In Guests

In December 2015, the salon brand reached one million guests who have checked in online through the chain’s website or via its mobile app, available for Android and iOS. Supercuts had offered online check-in since April 2015, so considerably less than a year passed before it reached the milestone one-million mark.

Supercuts also launched its “Ready to Go” ad campaign in April, highlighting the online check-in service and the hot towel refresher infused with tea tree oil.

The Supercuts mobile app was launched in October 2014. Customers can create profiles, find salons in their area and sort them by wait time, and save a preferred location.

Website visitors can get inspired by examples of hairstyles, organized so that customers can find a cut that matches their hair type or lifestyle. They can also get information on available products at their favorite stores.

Section II – Estimated Costs

  • Please click here for detailed estimates of Supercuts franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis



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