Great Clips is a company that provides low cost haircuts to consumers. Great Clips was founded in 1982 and currently maintains their headquarters in Bloomington, Minnesota. The company’s annual revenue exceeded $1 billion last year.
About the Franchise
Great Clips maintains 4,000 franchise locations across the United States and Canada. The company prides itself on offering low cost, fast haircuts to its customers all while promoting great customer service. The company has experienced massive growth every year for the last decade.
New franchisees are only accepted in markets that currently do not have a location or that the company feels could bolster a new and profitable franchise owner.
Great Clips Franchise Costs and Expected Profits
On average, the total cost needed to open a Great Clips franchise ranges between $109,000 and $249,000, depending on customer market, building upgrades for the location and more. Overall, the prospective franchise owner should have at least $300,000 in net worth and $50,000 on-hand cash available. The liquidity requirement can be as high as $150,000 depending on initial location and business requirements. The initial franchise fee is $20,000, with an ongoing royalty fee of 6 percent of total gross store sales.
Actual profit generated from a franchise can vary greatly depending on location. Many franchise owners have reported earnings of as little as $50,000 per year, while others have enjoyed six figure net profits.
Pros of Owning a Great Clips Franchise
Great Clips franchises are widely attractive among various potential entrepreneurs. The company’s low financial barrier for entry allows more people to jump in and start a business, while the $20,000 initial fee is also low compared to other well known franchises.
Beyond basic financials, Great Clips only allows a certain number of franchises in a given area, giving entrepreneurs a better chance to make money attract customers in their community. The on-boarding process for a Great Clips franchise has also been described as simplistic, with minimal training needed to get up and running.
Cons of Owning a Great Clips Franchise
While the required financials are low for purchasing a franchise, the expected profits can be low as well. Franchise owners have experienced a greater deal of success when opening a Great Clips franchise in a larger metropolitan area than in a small town. The company also spends less in advertising, which makes it harder to attract customers without pitching in some of your own money.