Great Clips Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$183,000

-

$394,000

LOCATIONS

4290

Jennifer

Updated

April 11, 2024

Is

Great Clips

a franchise?

Yes,
Great Clips
currently
accepts
franchise
applications

Great Clips is a prominent franchise that has become a household name in the haircare industry, known for its convenient and affordable salon services. Founded in 1982 by Steve Lemmon and David Rubenzer in Minneapolis, Minnesota, Great Clips has grown to be one of the largest salon chains in North America.

The franchise began franchising in 1983, offering entrepreneurs the opportunity to be part of a brand focused on providing high-quality haircuts at affordable prices.At Great Clips, clients can enjoy a variety of hair services, including haircuts for men, women, and children, along with styling and grooming services.

What sets Great Clips apart from its competitors is its emphasis on walk-in appointments, making it easy for clients to receive a haircut without the need for an appointment. The franchise also leverages technology with its online check-in system, reducing wait times and enhancing the customer experience.

How many

Great Clips

franchises

are there?

In 2022, there were
4290
outlets in
the United
States, of which
4290
are franchises, and
0
are corporate-owned.

What are the

Great Clips

franchise

fees?

Advertising fee

5.00%

Initial Franchise Fee

The Initial Franchise Fee for a single franchise under a Franchise Agreement with Great Clips is $20,000. If participating in the Three Star Program, the non-refundable Program Fee is $35,000. For those who have signed a Master Development Agreement, the Initial Franchise Fee is $6,000 for each Franchise Agreement in the Exclusive DMA.

Continuing Franchise Fee (Royalty Fee)

The Continuing Franchise Fee, commonly known as the Royalty Fee, is 6% of Gross Sales, due biweekly. This fee is for ongoing franchise support and the use of the Great Clips brand and system.

Continuing Advertising Contribution

The Continuing Advertising Contribution is 5% of Gross Sales, also due biweekly. This fee is used for the collective advertising and marketing efforts to promote the Great Clips brand on a larger scale.

Renewal Fee

The Renewal Fee is $1,750 per salon, payable at the expiration of the initial 10-year term and at the end of each subsequent 10-year option term. This fee is associated with the renewal of the franchise agreement.

Assignment Fee

The Assignment Fee is $1,500 per salon. This fee is relevant when transferring the franchise agreement to a new owner or assignee.

Recruiting Technology Fee

The Recruiting Technology Fee is $500 per year per salon. It supports recruitment technologies and platforms for staffing the salons.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Great Clips

franchise?

It costs between
$183,000
and
$394,000
to start a
Great Clips
franchise.
Type of Expenditure Amount
Initial Franchise Fee $49,500
Building, Tenant Improvements and Rent $185,000 – $400,000
Equipment, Furnishings, Finishes and Supplies $50,000 – $90,000
Signs $14,000 – $55,000
Point-of-Sale System, Software, Office Equipment, Audio/Video, IT and Electronics $12,000 – $20,000
Opening Inventory and Supplies $8,000 – $14,000
Security Deposits, Utility Deposits, Business Licenses $5,000 – $12,000
Initial Advertising and Marketing Campaign $25,000
Initial Training: Travel and Living Expenses $4,000 – $8,000
Insurance $2,000 - $3,000
Professional Fees $5,000 - $15,000
Additional Funds - 3 months $40,000 – $71,000
TOTAL ESTIMATED INITIAL INVESTMENT $399,500 – $762,500
Initial Franchise Fee $20,000 or $35,000
Initial Advertising Contribution to the MDAF $5,000
Freight $0 to $3,000
Sales Tax on Fixtures, Signage and Furnishings $4,700 to $6,400
Grand Opening Advertising $20,000 to $25,000
Lease Liability Fee and Lease Review Fee $0 to $4,000
Additional Funds (6-12 Months) $15,000 to $55,000
Total (Great Clips) $183,400 to $394,400

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Great Clips

provide

training

to its

franchisees?

Yes,
Great Clips
provides
training

Great Clips provides comprehensive training for franchisees and their key personnel, which includes various programs to ensure successful operation and adherence to brand standards. The training programs are:

  1. QuickConnect Franchisee Training: This is a mandatory training program for franchisees, covering the basics of establishing and operating a Great Clips salon. It includes a blend of online training through GREAT CLIPS® University, virtual learning, in-person training, participation in Great Clips Academy, LEADS, in-salon training, and classroom training.
  2. Great Clips Academy: This program is mandatory for franchisees and key personnel, like stylists. It focuses on the major aspects of establishing and operating the salon, ensuring the delivery of the GREAT CLIPS® brand promise.
  3. LEADS (Leading Excellence and Developing Staff): This training program is geared towards franchisees and their management staff. It ensures the appropriate delivery of the GREAT CLIPS® brand within the salon.
  4. In-Salon Training: This part of the QuickConnect Franchisee Training requires franchisees to complete in-salon training to become familiar with day-to-day salon activities, including the operation of the computer or salon technology system and the point-of-sale system.

Does

Great Clips

provides

territory

protection?

Great Clips does not provide an exclusive territory to franchisees. Instead, they offer aprotected territory, defined by a radius from the salon's primary customer entrance. The radius is usually three-quarters of a mile for traditional locations and one-tenth of a mile in densely populated areas. 

However, franchisees may still face competition from other franchisees, company-owned outlets, or other brands controlled by Great Clips, even within this protected area.

Can a

Great Clips

franchise

be run as

a passive

investment?

Great Clips franchisees are expected to be actively involved in the operations of their franchises. This active involvement is a crucial aspect of their franchising model. The franchise agreement details specific expectations and standards for ownership and operation, emphasizing the need for franchisees to be hands-on in managing their salon businesses.

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