In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Sport Clips franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Sport Clips franchise, based on Item 7 of the company’s 2021 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Sport Clips franchise, based on Items 5 and 6 of the company’s 2021 FDD
- Section IV – Number of franchised and company-owned Sport Clips outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
- Section V – Presentation and analysis of Sport Clips’ financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:
- number and percentage of Sport Clips franchise stores that achieved certain levels of 2020 sales (over $600,000; $500,001 to $600,000; $450,001 to $500,000; $400,001 to $450,000; $350,001 to $400,000; $300,001 to $350,000; $250,001 to $300,000; and less than $250,000)
- 2020 average and median sales for the 1,413 Sport Clips franchise stores that were in continual operation for the entire calendar years 2018, 2019, and 2020, and in continual operation for at least 39 weeks in 2020
- 2018, 2019, and 2020 average weekly sales for the Sport Clips franchise stores that were open prior to January 1, 2016, January 1, 2017, and January 1, 2018, respectively
Section I – Background Information
16 Things You Need to Know About the Sport Clips Franchise
Appoints New CEO
1. In mid-July 2020, Sport Clips founder Gordon Logan announced that the Sport Clips Haircuts board of directors had elected Edward Logan to succeed him as the new CEO of Sport Clips, Inc., the franchisor of the Sport Clips Haircuts system. Gordon Logan said, “Edward has grown up in the business and played a key role in the company’s growth since he joined full-time in 2010, setting new standards for excellence as president and chief operating officer. It’s been rewarding working closely with him these past 10 years, and his leadership during the COVID-19 crisis has been exemplary.”
2. Gordan Logan continued, “As chairman of Sport Clips, I look forward to supporting Edward in his new role to continue the steady growth of Sport Clips and the continual improvement of our franchisees’ profitability. I am confident he will ensure the championship experience we deliver for our exceptional franchisees and clients will exceed expectations.”
3. Edward Logan said, “I am humbled by the opportunity to serve Sport Clips’ clients, stylists, franchisees, and central support team. It’s something I’ve dreamed of and worked toward for many years. We will rise above the current challenges everyone is dealing with, and we will do so by continuing the values-based legacy of Sport Clips that makes everyone within Sport Clips feel like family, that Gordon and Bettye created for us all.”
4. After graduating from SMU and prior to joining Sport Clips, Edward served as a consultant with Deloitte Consulting in Dallas. In his early work with Sport Clips, Edward oversaw the company-owned stores taking many of them to top performers within the system and working to pioneer company-wide innovations used throughout the system today. Sport Clips has a strong record of supporting its team members, both employees of Sport Clips, Inc. and those of its franchisees, as well as veterans and children’s causes.
Raises More Than $1 Million to Support VFW’s Help A Hero Scholarships
5. At the end of January 2021, Sport Clips presented a $1,026,105 donation check to the Veterans of Foreign Wars Foundation (VFW) to provide scholarships for service members and veterans. Even in a pandemic, veterans are returning from active military duty to prepare for civilian careers that often require additional college, graduate, and technical degrees and training. To ease the financial burden of going back to school, Sport Clips and the VFW have teamed up for the past seven years to provide assistance through the Help A Hero Scholarship program.
6. Gordon Logan, Air Force veteran, VFW Life member, and founder and chairman of Sport Clips, said, “Supporting our nation’s military remains a priority for our veteran-founded business. We are honored to make this donation to the Help A Hero program for those who have given so much through their service. We’re grateful to our franchisees, team members, clients, and product partners who faithfully support these essential scholarships.”
7. Hal Roesch II, VFW national commander, added, “The pandemic’s impact has been far-reaching, especially for our military and veteran families, and this campaign helps to ensure we continue to provide as many student veterans with scholarships as possible. I’m proud to announce that we have awarded another 160 student veterans with scholarships totaling nearly $700,000 for the spring 2021 semester. To date, more than 1,900 military and student veterans have benefitted from the Help A Hero Scholarship program through $8.7 million donated previously by Sport Clips Haircuts and its generous clients and product partners.”
8. More than $60,000 of the money raised in 2020 was from Sport Clips’ own $1 per haircare service donation made on Veterans Day, while clients, individual supporters, and Sport Clips team members donated the largest portion of the money raised in stores and through virtual walks. Sport Clips partners Direct Beauty Express, John Paul Mitchell Systems, Nioxin, Sexy Hair, Gibs Grooming, ACTiiV, and Darlington Raceway also made substantial contributions.
9. Help A Hero Scholarship applications were open until April 30 for the fall 2021 semester to receive up to $5,000 of assistance per semester, per family for service members and veterans in the rank of E-5 and below.
Immediate Past President/CEO of The International Franchise Association Joins Board of Directors
10. In early April 2021, Sport Clips announced the addition of the immediate past president and CEO of the International Franchise Association, Robert Cresanti, to its board of directors. Cresanti, a seasoned Washington D.C.-based c-suite executive, founded Cresanti Associates, LLC, an international strategic business, technology, and public affairs advisory firm.
11. Edward Logan, president and CEO of Sport Clips, said, “Robert has been a friend to Sport Clips and a tireless advocate for the franchise business model…an industry that employs nearly 8.3M and provides local business ownership for thousands of others. Our founder, Gordon Logan, worked with and in support of Robert during his tenure at the IFA through efforts for franchising as a business model on Capitol Hill and as an IFA and IFA Foundation Board Member and VetFran chairman. Having Robert on the board strengthens our franchisee relationships and opportunities as well as the support we provide to more than 18,000 Sport Clips team members.”
12. Cresanti said, “As the CEO of the International Franchise Association, the number one question that was asked of me was ‘which franchise should I buy?’ I always said the same thing in response, finding truly great people as your franchisor is the best way to go. So, I am so deeply honored to be able to work with Edward and Gordon in service of their amazing franchisees.”
13. Sport Clips was founded in 1993 by Gordon Logan in Austin, Texas. Logan realized that there weren’t many places providing men’s and boys’ haircuts, and he set out to provide that service. He wanted to create a place that men felt comfortable in and would provide all the grooming services they needed. After gathering a group of industry professionals, Logan and his team developed the concept for Sport Clips. Logan’s goal, and Sport Clips’ mission – to provide a “championship haircut experience in an exciting sports-themed environment” – remains the same to this day.
14. Following the success of the first Sport Clips location, Logan expanded to Houston and Dallas. Franchising officially started in 1995 and Logan planned future locations on where Southwest Airlines flew to keep travel expenses at a minimum. Initially, growth was slow and steady and it took five years for Sport Clips to reach 50 locations. By the early 2000s, however, growth picked up exponentially and by 2007 there were 500 locations around the United States.
15. In 2012, Sport Clips began opening locations in Canada and by 2018 the brand had grown to 1,800 locations. Today, Sport Clips has locations in all 50 U.S. states and several stores across Canada.
Entrepreneur’s Franchise 500
16. Sport Clips ranked No. 17 on Entrepreneur’s 2021 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Sport Clips franchise costs, based on Item 7 of the company’s 2021 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Sport Clips’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 1,644
- Outlets at the End of the Year: 1,703
- Net Change: +59
- Outlets at the Start of the Year: 1,703
- Outlets at the End of the Year: 1,750
- Net Change: +47
- Outlets at the Start of the Year: 1,750
- Outlets at the End of the Year: 1,768 (Sport Clips owns an interest in 6 franchised outlets in Tennessee.)
- Net Change: +18
- Outlets at the Start of the Year: 56
- Outlets at the End of the Year: 69
- Net Change: +13
- Outlets at the Start of the Year: 69
- Outlets at the End of the Year: 70
- Net Change: +1
- Outlets at the Start of the Year: 70
- Outlets at the End of the Year: 70
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis
- You should not rely upon the historical financial data presented in this Item 19 in making a decision to purchase a Sport Clips franchise. During the year 2020, the COVID-19 pandemic forced many Sport Clips stores to close for varying periods of time and, upon reopening, curtailed the number of clients that could be accommodated at one time in a Sport Clips store.
Part 1 – Statement of Gross Sales – Year 2020 Gross Sales (1,413 Stores in Continual Operation During 2018, 2019, and 2020 and in Continual Operation for at Least 39 Weeks in 2020)
- At the end of calendar year 2020, there were 1,768 franchised Sport Clips stores.
- The Statements of Gross Sales below do not include 4 stores in Rochester, New York, which are not typical Sport Clips stores and operate under a special limited services license agreement that is not offered to new franchisees. Sport Clips knows that the gross sales of the stores in Rochester, New York are, on average, less than other stores in the Sport Clips System.
- The Statements of Gross Sales below also do not include 162 stores that were not open at least 39 weeks during the year 2020 because of lockdown orders arising from the COVID-19 pandemic.
- The Statements of Gross Sales below also do not include 69 company-owned stores located in Central Texas, Southern Nevada, Oklahoma, and Arkansas, or 7 stores in Tennessee owned by Sport Clips in partnership with a franchisee.
- All stores included in the Statements of Gross Sales did not receive any services that were not generally available to other Sport Clips stores, and each store offered similar products and services as would generally be offered by a typical Sport Clips store.