Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

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

by Franchise Chatter on February 18, 2016

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



Franchise Chatter Membership Information


Don't Invest in a Franchise Until You Check Out This List

Cost Cutters Photo by d.xin

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

  • Section I – Background information on the Cost Cutters franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Cost Cutters franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Cost Cutters’ financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • average total sales (fiscal year ended June 30, 2015) for the 384 franchised Cost Cutters Businesses that have been open and operating for at least 2 years as of July 1, 2014, and that provided Cost Cutters with weekly statements of Gross Revenues for all 52 weeks
  • average total sales (fiscal year ended June 30, 2015) for the 268 company-owned Cost Cutters Businesses that have been open and operating for at least 2 years as of July 1, 2014
  • average total sales (fiscal year ended June 30, 2015) for both franchised and company-owned Cost Cutters Businesses that have been open and operating for at least 2 years as of July 1, 2014
  • average total sales (fiscal year ended June 30, 2015) for the 384 franchised Cost Cutters Businesses that have been open and operating for at least 2 years as of July 1, 2014, by region (gold, navy, orange, purple, red, and teal)
  • average total sales (fiscal year ended June 30, 2015) for the 384 franchised Cost Cutters Businesses that have been open and operating for at least 2 years as of July 1, 2014, based on sales ranges
  • average annual sales, weekly sales, labor costs, supplies, continuing fees, total cost of sales, gross profit, advertising, insurance, rent, maintenance, other expenses, total operating expenses, and net cash flow from operations (fiscal year ended June 30, 2015) for the 178 franchised Cost Cutters Businesses that have been open for more than 12 consecutive months and whose methods of recording sales and expenses were in accordance with the policies and procedures recommended by Cost Cutters

Section I – Background Information

The story of Cost Cutters goes back much further than its founding in 1982. Joe Francis began his working life in the hair cutting industry as shoeshine boy for a barber shop in St. Paul, MN. When he turned 17, he attended barber school and became the youngest licensed barber in the state.

He and his wife, Flo, opened their first one-chair shop in 1957. In 1963, he opened his first full-service independent hair salon, called The Barbers Hairstyling for Men, offering men’s facials, manicures, and his new, unique razor cut technique. Five years later, his shop began servicing women as well and, in 1970, became the first in the industry to engage in franchising.

When he started the Cost Cutters chain in 1982, the goal was to provide affordable, no-frills haircuts in a family-friendly environment that doesn’t require appointments. Their segment focus is on busy, value-conscious families.

Cost Cutters is now owned by Regis Corporation, a Minneapolis-based company that owns various hair salon chains, including City Looks, Regis Salons, Supercuts, and We Care Hair. Here’s how Cost Cutters keeps things trim and tidy in the hair salon segment:

A Powerful Legacy

The Barbers company was a pioneer in the Midwest by being the first to enroll a woman in its barber school. It had the first woman-owned barber school and one-third of its franchises were owned by women. The company was also recognized nationally as having the most women on the board of directors and also the most women in upper-management positions of any publicly-traded corporation in the country.

Carrying the Legacy Forward

After Joe Francis died of cancer in 1994, his wife Flo established The Joe Francis Haircare Cosmetology Scholarship Foundation. Each year, the foundation gives 25 students across the country $1,200 scholarships towards tuition for their cosmetology education. Since its founding, more than $500,000 in scholarships have been awarded to deserving students.

Declining Locations

Back in 2007, there were as many as 877 Cost Cutters locations, but the numbers have been steadily declining ever since, down to its current 663 locations in 2015. It’s hard to say what’s behind this steady decline, but it may be nothing more than the original concept having grown stale.

In 2012, parent company Regis was operating upwards of 12,700 different salons around the world through as many as 50 different brands. Ironically, the company saw the need to cut costs drastically by consolidating brands, closing some of the company-owned stores, and reducing corporate staffing.

As of 2015, the overall number of salons operated by Regis was 9,556.

Section II – Estimated Costs

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

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



To Access the Rest of This Article and Other Premium, Income-Enhancing Content, Subscribe Now or Log In.

Gain the Insider Information (and Actual Earnings Data) You Need to Make a Safe and Smart Franchise Investment. Click Here to Learn More.



Gain the Insider Information (and Actual Earnings Data) You Need to Make a Safe and Smart Franchise Investment - See more at: https://www.franchisechatter.com/register/#sthash.le7wKJKM.dpuf



Franchise Matching Quiz

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: