Franchise Costs: Detailed Estimates of The Barbershop A Hair Salon For Men Franchise Costs (2017 FDD)

Detailed Estimates of The Barbershop A Hair Salon For Men Franchise Costs Based on Item 7 (Estimated Initial Investment) of The Barbershop A Hair Salon For Men’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $30,000 to $52,500

• If you sign a Multi-Unit Development Amendment (“MUDA”), the initial franchise fee is $30,000 for the first location, $12,500 for the second location, and $10,000 for the third location.

• If you purchase more than three locations under the MUDA, the initial franchise fee is $10,000 for each location that is in addition to three The Barbershop A Hair Salon For Men locations, if the licenses are purchased at the time the MUDA is executed.

• If purchased within three years of the date of the MUDA, the cost is $15,000 per additional location. The cost could be higher if purchased more than three years after the MUDA is executed.

2.  Training Expenses:  $1,500 to $3,500

• The cost of training is not included in the franchise fee. You are responsible for the cost of training, including transportation, airfare, and expenses for meals and lodging for the franchisor’s trainers.

• You are also responsible for a daily training fee of $250 per day.

• The total cost will vary depending on the number of training days you select and the type of accommodations you choose. These expenses are not refundable.

3.  Rent:  $1,500 to $4,000

• You must lease or otherwise provide a suitable facility for the operation of the Franchised Salon. A typical salon will be approximately 1,600 square feet.

• It is difficult to estimate the lease acquisition costs because of the wide variation in costs between locations. Lease costs will vary based upon square footage, cost per square foot, required maintenance cost, and cost of living in desired city.

• These amounts typically are not refundable.

4.  Lease Deposit:  $0 to $4,000

• It is not uncommon to have to pay the first month’s rent and a security deposit equal to 1 month’s rent in advance. The amount you pay is typically not refundable, but in some cases, the security deposit may be.

5.  Utility Deposits:  $0 to $1,500

• If you are a new customer of local utilities, you may have to pay deposits in connection with services such as electric, gas, telephone, and water. The amount of these deposits and whether they are refundable will vary by local policy. You should contact your local utilities for more information.

6.  Furniture, Fixtures, and Equipment:  $10,000 to $25,000

• You must purchase or lease and install various furniture, fixtures, and equipment, including chairs, barber chairs, end tables, whiskey barrels, washing machine, dryer, table televisions, barber pool, refrigerator, and massagers, necessary to furnish and equip the Franchised Salon according to the franchisor’s specifications.

• The cost of furniture, fixtures, and equipment will vary according to local market conditions, the size of your Franchised Salon, competition among suppliers, and other related factors.

• The franchisor does not know if the amounts you pay for furniture, fixtures, and equipment will be refundable. You should inquire about the return and refund policy of the suppliers before purchasing or leasing.

7.  Leasehold Improvements:  $60,000 to $150,000

• To convert the Approved Location into a The Barbershop A Hair Salon For Men Franchise, the premises must be renovated according to the franchisor’s standards and specifications.

• The cost of leasehold improvements will vary based upon size, condition, and location of the premises, local wage rates, and the cost and availability of materials. The amounts you pay for leasehold improvements will not be refundable.

8.  Opening Inventory:  $1,500 to $3,500

• You must purchase an initial supply of product from American Crew and other suppliers. These costs will vary based upon the size and location of the Franchised Salon, the time of year of opening, supplier’s cost, and other related factors.

• The franchisor does not know if the amounts you pay for your initial inventory will be refundable. You should inquire about the return and refund policy before purchasing or leasing.

9.  POS Computer System:  $2,000 to $4,000

• The franchisor recommends that you purchase and install the point-of-sale system that it specifies. The cost of the system is estimated to be $4,000.

• If you choose to purchase a system through someone other than the franchisor’s recommended supplier, you may pay more or less than the above estimate.

• The franchisor does not know if the amounts you pay for your POS System will be refundable. You should inquire about the return and refund policy before purchasing or leasing.

10.  Office Equipment and Supplies:  $500 to $1,000

• You must purchase general office supplies and typical office equipment, including a fax/copy machine, a drop safe with two compartments, calculators, computers with Internet access, filing cabinets, and a desk.

• Factors that may affect your cost of office equipment and supplies include local market conditions, competition among suppliers, and other factors.

• The franchisor does not know if the amounts you pay for office equipment and supplies are refundable. You should inquire about the return and refund policy of the supplier before purchasing or leasing.

11.  Professional Fees:  $500 to $3,000

• You will need to employ an attorney, an accountant, and other consultants to assist you in establishing your Franchised Salon.

• These fees may vary from location to location depending on the rates of local attorneys, accountants, and consultants. These fees are typically not refundable.

12.  Permits and Licenses:  $75 to $300

• Local government agencies typically charge fees for occupancy permits, operating licenses, and sales tax licenses, including other things.

• Your actual costs may vary based on the requirements of the local government agencies. These fees are typically not refundable.

13.  Signage:  $4,000 to $10,000

• This range includes the cost of all signage used in the Franchised Salon. The cost will vary based upon the size, interior and exterior layout and location of the Franchised Salon, and local wage rates, among other things.

• The amounts you will pay for signage typically are not refundable.

14.  Miscellaneous Opening Costs:  $3,500 to $7,000

• These include costs related to small items that are not capitalized. The costs include pictures, cleaning supplies, backbar product, and subscriptions.

15.  Insurance:  $200 to $400

• Factors that may affect the cost of your insurance include location of the Franchised Salon, amount of inventory you carry, the number of employees, and other factors.

• The amounts you pay for insurance typically are not refundable.

16.  Grand Opening Advertising:  $10,000 to $15,000

• The franchisor recommends that you spend a minimum of $10,000 on Grand Opening Advertising during the first 3 months of operation. You may choose to spend more.

• Factors that may affect your decision on the actual amount to spend include social media cost, the location of the Franchised Salon, and customer demographics in the surrounding area, among other things.

• The amounts you spend for Grand Opening Advertising are typically not refundable.

17.  Additional Funds/Working Capital:  $10,000 to $15,000

• The franchisor recommends that you have a minimum amount of money available to cover operating expenses, including employees’ salaries, for the first 3 months that the Franchised Salon is open.

• The franchisor cannot guarantee that this recommendation is sufficient. Additional working capital may be required if sales are low or operating costs are high.

18.  Total:  $140,275 to $314,700

• In compiling this chart, the franchisor relied upon the previous industry experience of its owners
  and managers.