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 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Supercuts franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Number of franchised and company-owned Supercuts outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2017 FDD
- Section V – Presentation and analysis of Supercuts’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- average gross sales during the 12-month period ending June 30, 2017 for the top third, middle third, bottom third, and all 1,132 franchised Supercuts Stores operating throughout the United States that were open for at least 2 full years as of July 1, 2016, 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, 2017)
- average gross sales during the 12-month period ending June 30, 2017 for the top third, middle third, bottom third, and all 931 Supercuts-owned Stores operating throughout the United States that were open for at least 2 full years as of July 1, 2016
- 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, 2017 for the top third, middle third, bottom third, and all 931 Supercuts-owned Stores operating throughout the United States that were open for at least 2 full years as of July 1, 2016
Section I – Background Information
12 Things You Need to Know About the Supercuts Franchise
Multi-Year Sponsorship Deal with Major League Baseball
1. At the beginning of 2018, the Regis Corporation, which owns Supercuts, announced that it had signed an industry exclusive multi-year sponsorship deal with Major League Baseball (MLB) for the Supercuts brand. Since the 2018 Championship Season started on March 29, Supercuts has been the Official Hair Salon, Official Hair Stylists, and partner of MLB.
2. Through the partnership, Supercuts has the exclusive category right to promote around MLB Spring Training, regular season and Postseason games, including Jewel Events such as the All-Star Game presented by Mastercard and the World Series. The Supercuts sponsorship will be implemented throughout MLB’s core marketing platforms including broadcast, digital, mobile, and social.
3. Hugh Sawyer, president and chief executive officer of Regis Corporation, said, “We anticipate that our new relationship with MLB will be a highly effective platform for Supercuts’ well-known national brand to support the growth of our local market Supercuts franchised and company-owned salons across North America. Our Supercuts brand will be integrated throughout MLB’s highly successful and connected ecosystem of millions of fans on MLB Network, MLB.com, social media, and the leading sports television networks. Given the quality and breadth of MLB, we believe this will be a home run for our Supercuts salons, stylists, and guests.”
Launches First Contest as Part of New Partnership with Major League Baseball
4. To celebrate the new partnership and give back to Supercuts customers that are MLB fans, Supercuts launched its Baseball Bucket List Contest on March 29. Supercuts and MLB will reward one lucky fan a once-in-a-lifetime experience: a five-day, four-night trip to the 2018 MLB All-Star Game in Washington, D.C., complete with tickets to the week’s biggest events.
5. To enter the contest, fans needed to snap a selfie of their new haircut in front of or inside a Supercuts store. Then they needed to post their selfie on social media using the hashtags #SuperReady and #contest. The Baseball Bucket List Contest ended on May 19 and Supercuts had been posting some of its favorite entries on the official contest page on its website.
Offering a Wide Variety of Hairstyles
6. One of Supercuts’ main selling points is that the haircuts it offers are quick yet stylish. Although customers are free to request whatever style they’re looking for, Supercuts has a few different hairstyle varieties that customers can choose from. Additionally, every haircut comes with the brand’s Hot Towel Refresher service as a finishing touch.
7. Supercuts’ repertoire of men’s hairstyles includes the classic fade, clipper cut with brush back, hi-top fade, longer comb-over, longer layers, taper fade, textured brush back, textured comb-over, textured quiff, traditional brush-up, and undercut with comb-over. The brand offers the following women’s hairstyles: a-line bob, bob with layers, the lob, long layers with curls, long layers with bangs, short layers, and the pixie cut with textured layers.
8. In addition to men’s and women’s haircuts, Supercuts also cuts children’s hair (both boys and girls). The brand’s boys’ hairstyles include classic clipper with blending, classic clipper with short layers, short quiff layer, and side-swept short layers. Supercuts offers one length haircuts with bangs for girls. All of Supercuts’ standard hairstyles can be viewed on the brand’s website to give customers an idea of what to expect.
9. Supercuts was founded in 1975 by Geoffrey Rappaport and Frank Emmett in the San Francisco Bay area. Rappaport and Emmett wanted their salon to be an alternative to both high-fashion salons and neighborhood barbershops. The business partners developed a 20-minute hair cutting technique that allowed them to offer customers quick and affordable haircuts without appointments. They also allowed customers to pick and choose which additional services they wanted, in order to tailor their experience to their desires and budgets.
10. After developing the pattern that all future Supercuts stores would follow, Rappaport and Emmett began franchising the concept in 1979. The company continued to grow over the next decade, and by the mid-1980s, Supercuts became the second largest salon chain in the United States, trailing only Memphis-based Fantastic Sam’s.
11. In 1987, Supercuts was acquired by a group of Chicago-based venture capitalists operating under the name Knightsbridge Partners. Under the new leadership, Supercuts expanded rapidly, but this success did not last. To help save the company, Knightsbridge sold Supercuts to the Regis Corporation in 1996. Today, Supercuts is still owned by the Regis Corporation and there are over 2,660 Supercuts salons in the United States, Canada, and Western Europe.
Entrepreneur’s Franchise 500
12. Supercuts ranked No. 14 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Supercuts franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Supercuts’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 1,195
- Outlets at the End of the Year: 1,373
- Net Change: +178
- Outlets at the Start of the Year: 1,373
- Outlets at the End of the Year: 1,562
- Net Change: +189
- Outlets at the Start of the Year: 1,562
- Outlets at the End of the Year: 1,671
- Net Change: +109
- Outlets at the Start of the Year: 1,130
- Outlets at the End of the Year: 1,056
- Net Change: -74
- Outlets at the Start of the Year: 1,056
- Outlets at the End of the Year: 1,017
- Net Change: -39
- Outlets at the Start of the Year: 1,017
- Outlets at the End of the Year: 946
- Net Change: -71
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
Part 1 – Average Store Gross Sales Information
- The first portion of the following financial performance representation discloses historical average and median Store gross sales during the 12-month period ending June 30, 2017 for 1,132 franchised Supercuts Stores operating throughout the United States.
- The Stores whose gross sales were included in order to calculate the average and median were open for at least 2 full years as of July 1, 2016, 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, 2017).
- As of June 30, 2017, there were an additional 539 franchised Supercuts Stores operating throughout the United States. However, those Stores’ gross sales were not included in this calculation because they either (a) were not open at all as of July 1, 2016, the beginning of the 12-month period for which the numbers were calculated, or (b) had not been open for 2 full years as of that date.
- The following information has been compiled from the figures reported on sales and royalty statements submitted by the franchisees of these 1,132 franchised Stores. While Supercuts believes this information to be accurate and complete, it has not independently audited this information or otherwise verified its accuracy.
- The 1,132 franchised Stores included in this financial performance representation are located in the following states:
- Alabama (15)
- Arkansas (13)
- Arizona (34)
- California (265)
- Connecticut (4)
- Colorado (9)
- District of Columbia (1)
- Florida (48)
- Georgia (19)
- Idaho (9)
- Illinois (38)
- Indiana (8)
- Iowa (8)
- Kansas (6)
- Kentucky (3)
- Louisiana (18)
- Maine (16)
- Maryland (2)
- Massachusetts (88)
- Michigan (1)
- Missouri (11)
- Mississippi (6)
- Nebraska (14)
- Nevada (1)
- New Hampshire (24)
- New Jersey (27)
- New Mexico (15)
- New York (6)
- North Carolina (11)
- Ohio (6)
- Oklahoma (66)
- Oregon (17)
- Pennsylvania (92)
- South Carolina (9)
- South Dakota (2)
- Tennessee (13)
- Texas (127)
- Utah (2)
- Vermont (3)
- Virginia (18)
- Washington (47)
- West Virginia (3)
- Wisconsin (5)
- Wyoming (2)
Average Gross Sales of Franchised Supercuts Stores