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Considering a Great Clips Franchise? Don’t Overlook These 32 Important Franchise Fees

by Franchise Chatter on December 31, 2016

in Franchise Fees, Salon Franchise



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

This post was updated on May 16, 2017 to reflect information from Great Clips’ 2017 FDD.

If you are considering a Great Clips franchise, don’t get blindsided by these 32 important franchise fees (from the initial franchise fee, to the royalty fee, to 30 other fees found in Items 5 and 6 of Great Clips’ 2017 FDD).

1.  Initial Franchise Fee for a Single Salon:  $20,000

  • The Initial Franchise Fee is $20,000 for a single salon.
  • If you are signing your first Franchise Agreement with Great Clips, you will pay the $20,000 Initial Franchise Fee upon signing the Franchise Agreement. For any subsequent Franchise Agreements that you sign, you will pay $10,000 of this amount (the “Partial Initial Franchise Fee”) upon signing the Franchise Agreement and the balance of $10,000 when you place the equipment order with Great Clips for the Salon.
  • Great Clips will not accept an equipment order unless the balance of the Initial Franchise Fee has been paid. You will typically place your equipment order after you have executed a lease for the Salon and the premises have been made available to you for occupation.
  • The Initial Franchise Fee should not be financed.
  • There are several circumstances that may occur which could cause the first Franchise Agreement that you sign to be canceled after you have paid the Initial Franchise Fee. Great Clips will have the right, but not the obligation, to cancel the Franchise Agreement if:
  • (a) you do not open your Salon (or purchase and operate an existing salon) within 24 months of the date Great Clips accepts the Franchise Agreement;
  • (b) you do not complete the required training program to Great Clips’ satisfaction;
  • (c) Great Clips determines that you are using the Franchise Agreement for speculative purposes.
  • If any of these circumstances result in cancellation of your first Franchise Agreement, the Initial Franchise Fee is non-refundable.

2.  Initial Advertising Contribution:  $5,000



  • In addition to the Initial Franchise Fee, you must pay a non-refundable $5,000 Initial Advertising Contribution to the Great Clips, Inc. Market Development Advertising Fund (“Market Development Ad Fund”).
  • If you are signing your first Franchise Agreement with Great Clips, you will pay the $5,000 Initial Advertising Contribution upon signing the Franchise Agreement. For any subsequent Franchise Agreements that you sign, you will pay the Initial Advertising Contribution when you place your equipment order with Great Clips.
  • Great Clips will not accept an equipment order unless the Initial Advertising Contribution to the Market Development Ad Fund has been paid.

3.  Master Development Agreement:  $10,000 for each salon in the Exclusive DMA

  • If you enter into a Master Development Agreement, the total fee is $10,000 for each salon in the Exclusive DMA. The fee is comprised of a $4,000 Development Fee and a $6,000 Initial Franchise Fee for each then-current Franchise Agreement you sign in the Exclusive DMA.
  • You must pay the $4,000 Development Fee upon signing the Master Development Agreement. The Development Fee is fully earned and non-refundable upon acceptance by Great Clips of the Master Development Agreement.
  • You must sign a Franchise Agreement and pay the $6,000 Initial Franchise Fee for the first salon upon signing the Master Development Agreement. The $6,000 Initial Franchise Fee for each additional salon is due on the date you sign the then-current Franchise Agreement.
  • Any Market Development Ad Fund contribution required pursuant to the Franchise Agreement for a location in the Market will be waived, provided that you have followed the approved grand opening advertising plan as determined and approved in writing by Great Clips in its discretion. If you have not done so, then in addition to the Initial Franchisee Fee, the Market Development Ad Fund contribution required by the Franchise Agreement will be due and payable in full upon request.
  • If you meet the salon opening requirements prior to the tenth year of the Master Development Agreement, you may qualify to add additional salons in the Exclusive DMA for an Initial Franchise Fee of $10,000 for each additional salon until the expiration of the term of the Master Development Agreement.
  • The number of DMAs in which the Master Development Agreement is available is extremely limited.

4.  Three Star Program:  $35,000 plus a non-refundable Initial Advertising Contribution to the Market Development Ad Fund of $5,000

  • The Three Star Program is a lease-signing incentive program with a term of 24 months. Franchisees may apply for three Great Clips franchises for a non-refundable Program Fee of $35,000 plus a non-refundable Initial Advertising Contribution to the Market Development Ad Fund of $5,000.
  • If the Three Star Program Agreement is accepted by Great Clips, the Initial Franchise Fee of $20,000 will be waived for each Three Star franchise for which there is a fully-executed lease by the end of the 24-month term.
  • Further, if you follow the designated grand opening plan, as determined by Great Clips, the Market Development Ad Fund contribution of $5,000 will be waived for each Three Star franchise for which there is a fully executed-lease by the end of the 24-month term.
  • You must have a fully-executed lease for each of the Three Star franchises within 24 months of Great Clips’ acceptance of the Three Star Program Agreement. If you do not succeed in obtaining a fully-executed lease for all Three Star franchises in the time frame required, then you will forfeit all Three Star Program benefits for any Three Star franchise for which there is no corresponding lease.
  • The Three Star Program is available only in certain markets as determined by Great Clips in its sole business judgment.

Deferral Program

  • In some cases, franchisees may qualify for the Deferral Program. The Initial Franchise Fee is deferred if you open a salon that is located within the Protected Area or proximity right of first refusal area, if offered, of one of your existing salons.
  • The Initial Franchise Fee ($20,000, plus the Initial Advertising Contribution of $5,000 to the Market Development Ad Fund) is due if either of the salons should ever relocate outside the original salon’s Protected Area or proximity right of first refusal area.

Expediter Program

  • Under the Expediter Program, franchisees may qualify for a rebate of up to $20,000 to offset the actual costs you incur in payments to a third party to acquire a specific real estate location in which a new or relocated salon will operate.

VetFran Program

  • Great Clips is a member of the International Franchise Association (“IFA”) and participates in the IFA’s VetFran Program. Great Clips provides a $5,000 rebate to veterans of the United States and Canadian armed forces who have been honorably discharged from the military and who otherwise meet the requirements of the VetFran Program.
  • This rebate is awarded at the time qualified veterans open their first salon, and is available for the first salon only.

5.  Continuing Franchise Fee:  6% of your Gross Sales

  • Due Date:  Biweekly.
  • Gross Sales includes all revenue from the sale of all products, goods, and services sold from or in connection with the franchise location, less sales taxes.

6.  Sales or Other Taxes Due on Continuing Franchise Fee:  as imposed by state or local government

  • Due Date:  Biweekly.
  • Great Clips has the right to collect from you any tax imposed on Great Clips by individual states or local government.

7.  Continuing Advertising Contribution to the North American Advertising Fund:  5% of your Gross Sales

  • Due Date:  Biweekly.
  • You must also engage in certain local advertising and sales promotion activities at an additional cost. In order to operate a competitive business, you will need to spend a minimum of 1-3% of your Gross Sales on incremental advertising in addition to the 5% Continuing Advertising Contribution to the North American Advertising Fund.

8.  Great Clips University (The Great Clips Academy; LEADS for Management Staff; and Great Clips University Courses, Tools, and Resources):  combined fee of $200 per salon per year

  • Due Date:  April 1 of each year.
  • This is the current fee and is subject to change at Great Clips’ sole discretion.
  • Stylists must start training within 30 days of employment. You must pay your trainees’ wages for time worked, travel, and expenses in connection with attending training.

9.  Renewal Fee:  $1,750 per salon



  • Due Date:  At expiration of initial 10-year term and end of each 10-year option term.
  • The Renewal Fee may be adjusted annually in proportion to annual changes in the United States Consumer Price Index. Your ability to renew your franchise is subject to the terms and conditions of your Franchise Agreement.
  • This fee is non-refundable unless your Franchise Agreement is not renewed.

10.  Assignment Fee:  $1,500 per salon

  • Due Date:  Upon request for consent to assign the Franchise Agreement to an assignee approved by Great Clips.
  • The Assignment Fee may be adjusted annually in proportion to annual changes in the United States Consumer Price Index. Your ability to assign your Franchise Agreement is subject to the terms and conditions of your Franchise Agreement.

11.  Local Co-op Dues:  average of $100 per month

  • Due Date:  As determined by your Co-op.
  • Great Clips requires you to join a local marketing cooperative organization designated by Great Clips and pay its dues, assessments, or contributions. Any salon owned by Great Clips has an equal vote on setting local Co-op dues and assessments and must pay those dues.

12.  Recruiting Technology:  $120 per salon

  • Due Date:  November 1 of each year.
  • The Recruiting Technology fee covers fees for the recruitment marketing platform, recruitment advertising, and other recruiting technology powered by third-party vendors.
  • This is the current fee and is subject to change by Great Clips in its sole business judgment.

13.  Insurance Coverage:  $1,600 to $2,500 per year

  • Due Date:  Upon demand.
  • Insurance premiums are generally paid by you to your insurance carrier. If you do not purchase the required insurance coverage referenced in the Franchise Agreement, Great Clips may purchase insurance on your behalf and must be reimbursed immediately.
  • These amounts only include property and public liability coverage. Workers’ compensation and other discretionary insurance coverages vary too widely to be estimated.

14.  Software License and Support Fee:  $155 per month

  • Due Date:  Monthly, by the first day of each month.
  • This current fee is payable to Innovative Computer Software, Great Clips’ sole designated software supplier, and is subject to change. This fee is a continuing fee and includes the software license fee, upgrades, documentation, and toll-free software support help line during normal business hours.

$25 per telephone call

  • Due Date:  As incurred.
  • If you contact the software support help line during non-business hours, you will be charged a fee of $25 per telephone call payable to Innovative Computer Software.

15.  Network and Hardware Service & Support Fee:  $10 per month

  • Due Date:  Annually, after the initial term of 3 years, as billed.
  • This current fee is payable to Foundation Technologies, LLC, known as The Foundation, Great Clips’ sole designated network and hardware managed services provider, and is subject to change.
  • This fee is a continuing fee after the first three years and includes the configuration, monitoring, and support of technology hardware purchased from The Foundation.
  • This includes ensuring the salon networks are PCI compliant according to the current PCI guidelines.

16.  Mobile Device Management Licensing Fee:  $51 per year

  • Due Date:  Annually as billed.
  • This current fee is payable to Foundation Technologies, LLC, known as The Foundation, Great Clips’ sole designated Apple Integrator, and is subject to change.
  • This fee is a continuing fee and includes the licensing for iPad management software to ensure salon iPads are securely and properly managed to meet current PCI guidelines.

17.  Aerohive Router License Fee:  $50

  • Due Date:  One-time fee upon purchase of router.
  • This current fee is payable to Foundation Technologies, LLC, known as The Foundation, Great Clips’ sole designated network and hardware managed services provider, and is subject to change.

18.  Aerohive Router Warranty Fee:  $28 per year

  • Due Date:  Annually, after the initial term of 3 years, as billed.
  • This current fee is payable to Foundation Technologies, LLC, known as The Foundation, Great Clips’ sole designated network and hardware managed services provider, and is subject to change.
  • This fee is a continuing fee after the first three years and is required to manage salon routers to provide secure networks that meet current PCI guidelines.

19.  TotalCare Replacement Service Fee:  $73 for three years

  • Due Date:  As billed.
  • This current fee is payable to Foundation Technologies, LLC, known as The Foundation, who in turn pays this fee to Ingenico on behalf of the franchisee, and is subject to change.
  • This fee is a continuing fee after the first three years and includes the processing and replacement of failed payment terminals when such failure is covered by the agreement.

20.  Other Technology Fees:  varies

  • Due Date:  As incurred.
  • Fees associated with the reconfiguration of salon technology are payable to Foundation Technologies, LLC, known as The Foundation, when an existing salon is purchased to transfer ownership and technology support includes but is not limited to:  $75 per Aerohive router, $30 per salon iPad.

21.  Credit Card Processing Fee:  $25 Application Processing Fee

  • Due Date:  As incurred.
  • You are required to utilize the Heartland Payments Solution for credit card processing. You will pay a one-time Application Processing Fee of $25.

$.0225 per transaction

  • The processing fee per transaction is payable to Heartland Payments Systems.

22.  Gift Card Processing Fee:  $0.095 per transaction

  • Due Date:  As incurred.
  • You are required to offer Gift Cards, Value Cards, or similar prepaid cards (“Gift Cards”) to customers for use as gift certificates, promotional cards, or store credit.
  • The processing fee per transaction is payable to Stored Value Systems, Inc., the third-party processor for the Gift Card Program. The processing fee is subject to change.

23.  Lease Liability Fee:  $0 to $1,500

  • Due Date:  Upon assignment of lease or sublease to you.
  • This fee is due if Great Clips guarantees your lease or assigns a lease to you and the landlord has not released Great Clips from ongoing liability or if Great Clips subleases to you.

24.  Lease Review Fee:  $850 to $3,350

  • Due Date:  Upon review or lease assignment.
  • This fee is due if you have an attorney review your lease.

25.  Out-of-Pocket Expenses Related to Lease or Sublease Assignment:  as incurred

  • Due Date:  Upon assignment of lease or sublease to you.
  • If Great Clips assigns a lease or subleases to you, you must cover Great Clips’ out-of-pocket expenses related to the assignment.

26.  Real Estate Commission:  as incurred

  • Due Date:  Upon demand.
  • In rare cases a franchisee may be required to pay a real estate commission on a site for the salon. This would either be paid directly to the landlord, the broker, or to Great Clips if it had been charged a commission.

27.  Sister Store Review Appeal Fee:  $500 to $1,000

  • Due Date:  As incurred.
  • If you wish to participate in a Sister Store Review Appeal to evaluate the potential sales transfer impact of a proposed new Great Clips location, you will pay Great Clips a fee of $500 to $1,000. You may be entitled to a refund of this fee if the outcome is decided in your favor.

28.  Late Charges:  accrued interest of 14% per annum or the highest interest allowed by law in the state where the Salon is located

  • Due Date:  Upon demand.
  • Great Clips is entitled to recover its costs, including reasonable attorneys’ fees, costs, overdraft charges, insufficient funds charges, and other expenses in collecting amounts due. Interest begins to run from the date of non-payment or underpayment.

29.  Audit or Inspection Cost:  cost of audit

  • Due Date:  Upon demand.
  • You must pay the cost of an audit, inspection, and reasonable professional fees if Great Clips inspects your books and finds a discrepancy of 5% or greater in any data reported by you, or an underpayment of 2% or more of any fees or Ad Fund contributions due.

30.  Taxes, Business Debts, or Liens:  as applicable

  • Due Date:  As charged.
  • These are generally paid by you to the government agency, supplier, or other creditor. If you do not pay these charges, Great Clips may, but is not obliged to, pay any taxes, business debts, or liens incurred by you in connection with your Salon, and will bill the same back to you.

31.  Salon Upgrades and Ongoing Maintenance Costs:  $40,000 to $70,000

  • Due Date:  Every seven to 10 years.
  • You will be required to remodel your Salon every seven to 10 years depending on then-current standards and the overall condition of the Salon.

approximately $2,500 – $5,000

  • Due Date:  Annually, as incurred.
  • You will be required to make periodic improvements and upgrades, such as painting, carpeting, graphics updates, fixture repair, and ongoing maintenance, depending on the wear and tear of the Salon.

32.  Architectural Fees:  $300 to $650

  • Due Date:  As incurred.
  • If you remodel or relocate your Salon, you will be required to pay the architectural fees at the beginning of the remodel or relocation project.


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