Great Clips franchise
A franchisee owns and operates a single Great Clips salon, normally a 900 to 1,200 square foot leased space in or near a shopping center, offering a required menu of walk-in haircare and personal grooming services plus a designated line of retail haircare products.
Manager-run permitted Disclosed
- Source
- 2026 Franchise Disclosure Document — Great Clips, Inc.
- Document
- FDD 2026, issued 2026-03-30
- Item
- Item 15
- Page
- PDF p. 52
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640577
The GREAT CLIPS® franchise system is comprised of owner-operated franchised locations.
Item 15 describes the system as owner-operated and requires the franchisee to devote best efforts to managing the business, but permits the salon to be managed or operated on a regular basis through a Designated Operator or a member of the salon management team who has completed the Great Clips Academy and all required manager training, so the owner is not required to be on site full time. The franchisee must personally complete all required franchisee training. Independent contractors may not be used to staff the salon, and stylists must be licensed by the state cosmetology board. Item 19 notes franchisees with more than five years in the system operate an average of 8.5 salons, which is consistent with delegated day-to-day management.
What stands out
- Total initial investment of $187,800 to $419,900 for one salon, excluding real estate purchase and owner compensation; the standard payment to the franchisor at signing is $25,000 ($20,000 Initial Franchise Fee plus a $5,000 advertising-fund contribution).
- Ongoing fees on gross sales total 11% before local advertising: 6% Continuing Franchise Fee and 5% Ad Fund, both collected biweekly by automatic bank withdrawal, with 1–3% more that Great Clips says is likely needed locally.
- Item 19 covers 4,158 salons with average 2025 total sales of $410,783 and a median of $390,685; a smaller 2,376-salon subset also discloses average operating cash flow of $83,504, or 19.77% of sales, before taxes, depreciation, debt service and owner pay.
7 more observations
- The 188 reporting salons with under $250,000 of sales averaged negative operating cash flow of $5,248, showing the downside of the distribution alongside the $188,148 average for salons above $600,000.
- The system is flat: 4,427 franchised salons at the start of 2023 and 4,441 at the end of 2025, a net gain of 14, with 323 openings and 309 exits over three years and no company-owned salons.
- No exclusive territory; the Protected Area is a three-quarter mile radius, or one-tenth of a mile in areas Great Clips designates as densely populated, with Non-Traditional Locations carved out.
- No litigation is disclosed in Item 3 and no bankruptcy in Item 4.
- Every equity holder must personally guarantee the Franchise Agreement, and all disputes are arbitrated in Minneapolis with litigation in Hennepin County, Minnesota.
- Required purchases from Great Clips and designated suppliers account for about 90–95% of set-up spending and 80–85% of ongoing purchases; required-purchase revenue was 14.6% of the franchisor's 2025 revenue.
- Item 20 shows 903 signed franchise agreements with no salon open at December 31, 2025 against 85 openings projected for the next fiscal year.
Things to verify
- Ask how the Item 19 cost tables would look with the 1,782 non-reporting salons included; Great Clips states only that the median would have been 2.8% lower, and does not say what would happen to average operating cash flow.
- Operating cash flow in Item 19 is before any owner or general-manager compensation, debt service, depreciation and income tax; model what a salon returns after paying a manager if you do not intend to run it yourself.
- Ask what first- and second-year sales look like for new salons; Great Clips states newly opened salons tend to have sales and cash flows significantly below the averages shown, but discloses no separate figures for them.
6 more questions
- Test the Protected Area against the specific site: three-quarters of a mile is small, it can shrink to one-tenth of a mile in a densely populated area, and Non-Traditional Locations inside it may still be developed by Great Clips.
- Confirm what the mandatory remodel every seven to ten years would cost at your site and how it will be financed; the $20,000 to $80,000 estimate is not part of the Item 7 initial investment.
- Verify current pricing for the required hardware package, managed services and payment-terminal warranty programme; Item 11 requires them but does not quantify those amounts.
- Ask why 903 signed agreements had no open salon at year end while only 85 openings are projected for the next year, and how that backlog affects site availability in your market.
- Some current and former franchisees are subject to settlement confidentiality clauses; when calling the Exhibit A and B lists, ask directly whether the person can speak freely.
- Check whether the state addenda in Exhibit P modify the Minnesota arbitration, venue and non-compete provisions for your state.
Category cost placeholders, not a forecast. This snapshot uses the default inputs; the calculator below updates when you edit them.
Evidence confidence: High. This describes source support, not investment quality. AI-extracted and machine-verified where stated; no human line-by-line review. Source and review record.
Read the full research overview
A Great Clips franchisee owns and runs a single walk-in hair salon, typically 900 to 1,200 square feet of leased shopping-centre space, offering a fixed menu of haircare services and a designated range of retail products. Great Clips, Inc. is a Minnesota corporation that opened its first salon in 1982 and began franchising in 1983; it has no parent, predecessors or affiliates and operates no company-owned salons.
Item 7 puts the total initial investment for one salon at $187,800 to $419,900, excluding any real estate purchase and any owner's salary. The standard initial payment to the franchisor is $25,000 — a $20,000 Initial Franchise Fee plus a mandatory $5,000 contribution to the advertising fund — with the $419,900 high end reflecting the $35,000 Three Star Program fee instead. Ongoing fees are a 6% Continuing Franchise Fee and a 5% Ad Fund contribution on gross sales, both drafted biweekly, plus roughly 1–3% that Great Clips says franchisees will likely need for local advertising, $250 a month for the required point-of-sale software, local co-op dues averaging $100 a month, and annual training and recruiting-technology fees. No minimum liquidity or net-worth requirement is disclosed in the reviewed source.
Item 19 is unusually broad. Table 1 covers 4,158 of the 4,441 salons eligible to be open for all of 2025 and reports average total sales of $410,783 and a median of $390,685, ranging from $28,036 to $1,082,803. A second set of tables adds costs, but only for the 2,376 salons that submitted financial statements: those averaged $422,283 in sales and $83,504 in operating cash flow, or 19.77% of sales. Great Clips discloses that the reporting subset skews high and that including the non-reporting salons would have cut the median 2.8%. Operating cash flow is not profit — it excludes income taxes, depreciation, amortisation, capital reserves and debt service, and the labour line excludes any general-manager or franchisee pay. The sales-band table shows the spread plainly: the 188 salons under $250,000 in sales averaged a $5,248 cash loss, while the 274 above $600,000 averaged $188,148.
Item 20 shows a mature, essentially flat system. Franchised salons went from 4,427 at the start of 2023 to 4,441 at the end of 2025 — a net gain of 14 over three years, with 323 openings largely offset by 290 salons that ceased operations for other reasons plus 10 terminations and 9 non-renewals, although that closure column includes relocations. Transfers affected 164, 207 and 175 salons in the three years. Items 3 and 4 disclose no litigation and no bankruptcy. The main contractual points to weigh are the absence of an exclusive territory, arbitration and litigation confined to Minnesota, a personal guaranty from every equity holder, required purchases covering 80% to 95% of spending, and a mandatory remodel every seven to ten years.
View ratings and their supporting evidence
Transparent ratings
How these are computedEach dimension is scored 1–5 from published formulas. Missing data yields “Not enough evidence to rate”, never a low score. There is no composite score by design.
How the system has performed, computed from the disclosed Items 7, 19 and 20. Figures a documented material source inconsistency puts in doubt are excluded, and the dimension shows “Not rated”.
Inputs
- Franchised outlets 4427 → 4441 (Item 20, Table 3)
- Thresholds: ≥15% → 5; 5–15% → 4; 0–5% → 3; −5–0% → 2; below −5% → 1
Inputs
- Attrition = (terminations + non-renewals + reacquisitions + ceased-other) ÷ start-of-year franchised units, averaged over 3 fiscal years
- Thresholds: <2% → 5; 2–4% → 4; 4–6% → 3; 6–10% → 2; >10% → 1
Inputs
- AUV $410,783 (disclosed) ÷ midpoint investment $303,850 = 1.35×
- Thresholds: ≥2.0 → 5; 1.5–2.0 → 4; 1.0–1.5 → 3; 0.7–1.0 → 2; <0.7 → 1
How much this brand’s FDD discloses, and how well-supported our data on it is. This measures transparency, not business performance — a strong business that discloses little scores low here and stays unrated above.
Inputs
- Item 19 present (+1)
- Average plus median or a distribution (+1)
- Population 94% of franchised units, clearly described (+1)
- Cost or profit data disclosed (+1)
- Multi-year or cohort data (+1)
- Franchisor Track Record
- Franchising 43 years (since 1983) · 4,441 outlets · Item 3: no litigation disclosed · Item 4: none disclosed
- Multi-Unit Scalability
- Three routes to more than one salon are disclosed. The Three Star Program is a lease-signing incentive: the franchisee signs three Franchise Agreements plus … · Manager-run permitted
- Operational Intensity
- Manager-run permitted
Initial investment
FDD Items 5 and 7Format shown: Single Great Clips salon under one Franchise Agreement, in leased space (typically 900–1,200 sq ft in a shopping center); real estate purchase excluded
$187,800–$419,900 total initial investment. Excludes real estate purchase. Includes 6 months of additional funds.
View full investment breakdown — Items 5 & 7
| Initial franchise fee (the named Item 5 fee only) | $20,000 Disclosed
For a subsequent Franchise Agreement, the same total $20,000 is split into a $10,000 payment at signing and $10,000 at equipment order, not a discount. Other required Item 5 payments to the franchisor are listed separately below — this figure is the named fee only. |
|---|---|
| Other required initial payments to the franchisor (Item 5) |
|
| Total Item 5 payments to franchisor/affiliates | $73,800 Derived
$100,400 Derived
|
| Total initial investment — low | $187,800 Disclosed
The Item 7 Total row foots exactly to the sum of its line items. The cover page states the same range. |
| Total initial investment — high | $419,900 Disclosed
The high end assumes the $35,000 Three Star Program Fee rather than the $20,000 single-unit Initial Franchise Fee; holding the fee at $20,000 the line items sum to $404,900. The Total row as printed foots to the line items. |
| Midpoint of range | $303,850 Derived
|
| Real estate purchase included? | No — assumes a leased site |
| Additional funds assumed | 6 months |
| Required liquid capital | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Great Clips, Inc.; we do not fill gaps with estimates or third-party figures. No minimum liquid-capital requirement appears on the cover pages or in Items 1, 5, 7, 11 or 15 of the reviewed document. |
| Required net worth | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Great Clips, Inc.; we do not fill gaps with estimates or third-party figures. No minimum net-worth requirement appears anywhere in the reviewed document. |
Assumes a leased salon delivered in vanilla-shell condition, so no land or building purchase is included; the estimate does not cover an owner's salary or draw. Additional funds cover 3 to 6 months of operations, and 6 is recorded above as the upper bound of that range. Great Clips does not offer direct or indirect financing. The Item 7 note states costs may vary if an existing salon is purchased. A separate Item 7 table for the Master Development Agreement shows only development and initial franchise fees ($14,000–$46,000 for two to ten salons) and states those fees are in addition to the full initial investment for the first salon.
Item 7 line items (14)
| Expenditure | Low | High |
|---|---|---|
| Initial Franchise Fee — $20,000 for a standard single Franchise Agreement; $35,000 is the Three Star Program Fee covering three Franchise Agreements. | $20,000 | $35,000 |
| Initial Advertising Contribution to the MDAF — Non-refundable; may be waived under the Three Star Program and a Master Development Agreement if the approved grand opening plan is followed. | $5,000 | $5,000 |
| Travel and expenses while training — Per participant. | $1,500 | $2,500 |
| Architecture fees — Paid to Great Clips; high end assumes plan revisions, engineered MEP drawings and LEED certification. | $100 | $3,800 |
| Leasehold improvements, including labor — Assumes the landlord delivers a vanilla shell; conversions of free-standing or pre-existing buildings are described as too variable to estimate. | $70,000 | $200,000 |
| Rent and security deposits | $1,000 | $10,000 |
| Fixtures, signage and furnishings, including salon technology hardware | $40,000 | $55,000 |
| Freight | $4,000 | $7,000 |
| Sales tax on fixtures, signage and furnishings | $0 | $3,200 |
| Opening inventory and supplies | $4,700 | $6,400 |
| Grand opening advertising — Required for the first salon under the Grand Opening Policy; excludes discounted pricing and extra opening staffing. | $20,000 | $25,000 |
| Insurance — Initial annual premium for required property and public liability cover only. | $1,500 | $3,000 |
| Lease liability fee and lease review fee — $1,500 lease liability fee if Great Clips guarantees the lease, plus a $2,200–$2,500 lease review fee. | $0 | $4,000 |
| Additional funds (3–6 months) — Excludes any owner's salary or draw. | $20,000 | $60,000 |
Source for every row: the Item 7 estimated-initial-investment table of 2026 Franchise Disclosure Document — Great Clips, Inc. (table begins PDF p. 23) — rows inherit the table's citation rather than carrying fifteen identical ones.
Other formats disclosed in Item 7 (1)
| Format | Low | High | Fee |
|---|---|---|---|
| Master Development Agreement — initial fees only (2 to 10 salons) | $14,000 | $46,000 | $6,000 |
Ongoing fees
FDD Item 6Royalty
6% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — Great Clips, Inc.
- Document
- FDD 2026, issued 2026-03-30
- Item
- Item 6 — Other Fees table — Continuing Franchise Fee
- Page
- PDF p. 20
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640577
6% of your Gross Sales
Called the Continuing Franchise Fee, collected biweekly by automatic bank withdrawal. Gross Sales means all revenue from services, products and goods sold from or in connection with the location, less sales taxes. Great Clips may also collect any state or local tax imposed on it in respect of this fee. Item 19 confirms all salons in the system pay the same 6%.
Brand advertising fund
5% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — Great Clips, Inc.
- Document
- FDD 2026, issued 2026-03-30
- Item
- Item 6 — Other Fees table — Continuing Advertising Contribution to the Ad Fund
- Page
- PDF p. 20
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640577
Collected biweekly by automatic bank withdrawal. Item 19 states all salons pay the identical 5% into the Ad Fund. This is separate from the one-time $5,000 initial contribution to the Market Development Advertising Fund and from local co-op dues.
Local marketing
1%–3% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — Great Clips, Inc.
- Document
- FDD 2026, issued 2026-03-30
- Item
- Item 6 — Other Fees table — Continuing Advertising Contribution remarks
- Page
- PDF p. 20
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640577
you will likely need to spend a minimum of 1-3% of your Gross Sales on incremental advertising
Item 6 requires franchisees to engage in local advertising and sales promotion at additional cost but does not set a fixed percentage. The 1–3% range is the franchisor's stated view of what a franchisee will likely need to spend on incremental advertising to stay competitive, on top of the 5% Ad Fund contribution, rather than a contractual minimum.
Core requirements shown separately; caps, credits and conditions may overlap. Check the full schedule for technology, cooperative, transfer and other charges.
View all recurring fees and conditions
| Royalty | 6% of gross sales Disclosed
Called the Continuing Franchise Fee, collected biweekly by automatic bank withdrawal. Gross Sales means all revenue from services, products and goods sold from or in connection with the location, less sales taxes. Great Clips may also collect any state or local tax imposed on it in respect of this fee. Item 19 confirms all salons in the system pay the same 6%. Called the Continuing Franchise Fee, collected biweekly by automatic bank withdrawal. Gross Sales means all revenue from services, products and goods sold from or in connection with the location, less sales taxes. Great Clips may also collect any state or local tax imposed on it in respect of this fee. Item 19 confirms all salons in the system pay the same 6%. |
|---|---|
| Advertising / brand fund | 5% of gross sales Disclosed
Collected biweekly by automatic bank withdrawal. Item 19 states all salons pay the identical 5% into the Ad Fund. This is separate from the one-time $5,000 initial contribution to the Market Development Advertising Fund and from local co-op dues. Collected biweekly by automatic bank withdrawal. Item 19 states all salons pay the identical 5% into the Ad Fund. This is separate from the one-time $5,000 initial contribution to the Market Development Advertising Fund and from local co-op dues. |
| Required local marketing | 1%–3% of gross sales Disclosed
Item 6 requires franchisees to engage in local advertising and sales promotion at additional cost but does not set a fixed percentage. The 1–3% range is the franchisor's stated view of what a franchisee will likely need to spend on incremental advertising to stay competitive, on top of the 5% Ad Fund contribution, rather than a contractual minimum. Item 6 requires franchisees to engage in local advertising and sales promotion at additional cost but does not set a fixed percentage. The 1–3% range is the franchisor's stated view of what a franchisee will likely need to spend on incremental advertising to stay competitive, on top of the 5% Ad Fund contribution, rather than a contractual minimum. |
| Technology / software | $250/month Disclosed
Per salon, per month, for the mandatory point-of-sale software licence from Innovative Computer Software (Styleware iPad, Net Check-In, Styleware Vantage and Salondata.com); subject to change and paid by automatic bank withdrawal. Additional technology charges disclosed in Item 11: $25 per after-hours support call, a $15 one-time payment-terminal set-up fee and $0.016 per transaction to Global Payments, and $5 per month per salon for the Global Payments Merchant Protection Program. Franchisees must also buy or rent a standardised salon hardware package through a designated integrator and pay managed-service, licence, warranty and service fees on it; those amounts are not quantified. Per salon, per month, for the mandatory point-of-sale software licence from Innovative Computer Software (Styleware iPad, Net Check-In, Styleware Vantage and Salondata.com); subject to change and paid by automatic bank withdrawal. Additional technology charges disclosed in Item 11: $25 per after-hours support call, a $15 one-time payment-terminal set-up fee and $0.016 per transaction to Global Payments, and $5 per month per salon for the Global Payments Merchant Protection Program. Franchisees must also buy or rent a standardised salon hardware package through a designated integrator and pay managed-service, licence, warranty and service fees on it; those amounts are not quantified. |
| Advertising cooperative | $100/month Disclosed
Item 6 gives a system average of $100 per month; the actual amount varies by co-op and is set by the co-op. Membership in a Great Clips-designated local cooperative is mandatory. The co-op is separate from the Ad Fund and the MDAF. Item 6 gives a system average of $100 per month; the actual amount varies by co-op and is set by the co-op. Membership in a Great Clips-designated local cooperative is mandatory. The co-op is separate from the Ad Fund and the MDAF. |
| Transfer fee | $1,500 one-time Disclosed
Per salon, currently $1,500, adjustable annually in line with the U.S. Consumer Price Index; payable on requesting Great Clips' consent to assign the Franchise Agreement. Per salon, currently $1,500, adjustable annually in line with the U.S. Consumer Price Index; payable on requesting Great Clips' consent to assign the Franchise Agreement. |
| Renewal fee | $1,750 one-time Disclosed
Per salon at expiry of the 10-year term, adjustable annually in line with the U.S. Consumer Price Index. A separate MDA Renewal Fee of currently $1,000 applies per unopened salon if a Master Development Agreement is renewed. Per salon at expiry of the 10-year term, adjustable annually in line with the U.S. Consumer Price Index. A separate MDA Renewal Fee of currently $1,000 applies per unopened salon if a Master Development Agreement is renewed. |
| Royalty + ad fund (% of sales) | 11% Derived
|
Fee schedule (30 fees; 21 verified against the source, 9 single-pass)
Every recurring, conditional and one-time fee found in this FDD's Item 6 table (plus mandatory recurring costs disclosed in Items 7/11), each cited to its page and carrying its verification status: verified means two independent readings agreed or a tie-break re-inspection of the page decided it; single-pass means one reading captured it and it has not been independently confirmed (permitted only for fees that cannot move modeled economics — see the materiality rule). Amounts marked “not stated” are charged at then-current rates the FDD does not quantify and are never modeled as $0.
| Fee | Amount | Frequency | Mandatory | Verification | Cite | Notes |
|---|---|---|---|---|---|---|
| Continuing Franchise Fee | 6% of gross sales | biweekly | Yes | verified (2-pass) | Item 6, p. 20 | |
| Sales or Other Taxes Due on Continuing Franchise Fee | Not stated | biweekly | No | verified (2-pass) | Item 6, p. 20 | |
| Continuing Advertising Contribution to the Ad Fund | 5% of gross sales | biweekly | Yes | verified (2-pass) | Item 6, p. 20 | |
| Local Advertising and Sales Promotion (incremental to the 5% Ad Fund) | 1%–3% of gross sales | varies | Yes | verified (tie-break) | Item 6, p. 20 | Engaging in local advertising and sales promotion is contractually required; the 1-3% is Great Clips' competitive expectation, not a stated contractual minimum. Stated in the Remarks column of the Continuing Advertising Contribution row of the Item 6 table; Item 11 (p.38) repeats the obligation to conduct additional local marketing at your own expense. |
| Training Fee (Great Clips Academy, LEADS, GCU) | $200 | annual | Yes | verified (2-pass) | Item 6, p. 20 | |
| Renewal Fee | $1,750 | one time | No | verified (tie-break) | Item 6, p. 21 | Payable only on renewal, at expiration of the 10-year term, and subject to the Franchise Agreement's renewal conditions (upgrade to then-current standards, possible retraining, general release). Non-refundable unless the Franchise Agreement is not renewed. Exhibit franchise agreement (p.190) confirms 'the then-current renewal fee, which currently is $1,750'. A separate MDA Renewal Fee (currently $1,000 per unopened salon) applies only to Master Development Agreements and is carried as its own entry. |
| MDA Renewal Fee | $1,000 | one time | No | single-pass | Item 6, p. 21 | Only applies to a Master Development Agreement that Great Clips agrees to renew, per unopened salon. [Listed by one verification pass only (A); not independently confirmed.] |
| Assignment Fee | $1,500 | one time | No | single-pass | Item 6, p. 21 | Charged upon a request for consent to assign the Franchise Agreement. [Listed by one verification pass only (A); not independently confirmed.] |
| Local Co-op Dues | $100 | monthly | Yes | verified (2-pass) | Item 6, p. 21 | |
| Recruiting Technology Fee (RTF) | $750 | annual | Yes | verified (2-pass) | Item 6, p. 21 | |
| Franchisee Program Fee (Convention, Institute, GM to Leader, etc.) | $345–$550 | per event | No | verified (2-pass) | Item 6, p. 21 | Only if/when the franchisee attends a given meeting or event. |
| Insurance Coverage (Property & Public Liability) | $1,500–$3,000 | annual | Yes | verified (2-pass) | Item 6, p. 21 | Paid to the insurance carrier, not to Great Clips; excludes workers' compensation and other discretionary coverage. |
| Out-of-Pocket Expenses Related to Lease or Sublease Assignment | Not stated | varies | No | single-pass | Item 6, p. 21 | Only if Great Clips assigns or subleases a lease to you. [Listed by one verification pass only (A); not independently confirmed.] |
| Real Estate Commission | Not stated | varies | No | single-pass | Item 6, p. 21 | Rare; only if a commission is charged on the salon site. [Listed by one verification pass only (A); not independently confirmed.] |
| Sister Store Review Appeal Fee | $500–$1,000 | per event | No | single-pass | Item 6, p. 21 | Only if the franchisee elects to appeal a Sister Store Review; potentially refundable. [Listed by one verification pass only (A); not independently confirmed.] |
| Late Charges | Not stated | varies | No | verified (tie-break) | Item 6, p. 22 | Only if a payment is late or underpaid; interest runs from the date of non-payment or underpayment. |
| Audit or Inspection Cost | Not stated | varies | No | single-pass | Item 6, p. 22 | Only if an audit finds a >=5% discrepancy or a >=2% underpayment of fees/Ad Fund contributions. [Listed by one verification pass only (A); not independently confirmed.] |
| Taxes, Business Debts or Liens Paid by Great Clips and Billed Back | Not stated | varies | No | single-pass | Item 6, p. 22 | [Listed by one verification pass only (A); not independently confirmed.] |
| Salon Upgrades (periodic remodel) | $20,000–$80,000 | varies | Yes | verified (tie-break) | Item 6, p. 22 | Remodel required every seven to 10 years depending on then-current standards and the overall condition of the Salon. Paid to contractors and suppliers rather than to Great Clips, but is a mandated recurring capital obligation. Separate from Architectural Fees ($100-$3,800) charged at the start of a remodel or relocation. |
| Salon Ongoing Maintenance Costs | $3,000–$9,000 | annual | Yes | verified (tie-break) | Item 6, p. 22 | |
| Architectural Fees (Remodel/Relocation) | $100–$3,800 | varies | No | single-pass | Item 6, p. 22 | Only if the franchisee remodels or relocates the Salon. [Listed by one verification pass only (A); not independently confirmed.] |
| Salon Technology Software License (Styleware Suite) | $250 | monthly | Yes | verified (2-pass) | Item 11, p. 40 | Same fee as /fees/technology; disclosed in Item 11, not the Item 6 table. |
| Global Payments Per-Transaction Processing Fee | $0 | varies | Yes | verified (tie-break) | Item 11, p. 41 | The same $0.016 is disclosed in Item 8 at p.30 ('a processing fee per transaction (currently $.016)'). Categorised 'technology' with the other payment-terminal and Foundation fees; 'software_pos' is reserved for the Styleware POS software licence. |
| Global Payments Merchant Protection Program Fee | $5 | monthly | Yes | verified (2-pass) | Item 11, p. 41 | |
| Payment Terminal Warranty and Support Program Fee | $5 | monthly | Yes | verified (tie-break) | Item 8, p. 30 | Fees and the term covered by the fee are subject to change. Item 11 (p.41) describes the same automatic enrolment and monthly billing but does not state the amount; Item 8 quantifies it. |
| Global Payments One-Time Set-Up Fee | $15 | one time | Yes | single-pass | Item 11, p. 41 | [Listed by one verification pass only (A); not independently confirmed.] |
| Network and Hardware Managed Services Fee (The Foundation) | $21 | monthly | Yes | verified (tie-break) | Item 8, p. 30 | Fees payable to The Foundation are subject to change. Continuing fee covering configuration, monitoring and support of salon technology hardware. The record's Item 11 technology note says these Foundation amounts are 'not quantified'; Item 8 does quantify them. |
| Meraki Router Maintenance Fee (The Foundation) | $26 | monthly | Yes | verified (tie-break) | Item 8, p. 31 | You must purchase or rent a Meraki MX68-CW Router for the Salon; fees payable to The Foundation are subject to change. Separate from the $20.99 per month Network and Hardware Managed Services Fee; the Item 8 sentence is garbled in the original but the amount and payee are unambiguous. |
| Mobile Device Management Licensing Fee (The Foundation) | $5 | monthly | Yes | verified (tie-break) | Item 8, p. 31 | Applies to salon iPads purchased or rented for operating the Salon; fees payable to The Foundation are subject to change. Distinct from the Global Payments Merchant Protection Program fee, which is also $5 per month but is charged per salon. |
| Management iPad Licensing Fee (The Foundation) | $3 | monthly | No | verified (tie-break) | Item 8, p. 31 | Only if you choose to install Management iPads in your Salons. Item 8 calls it 'an additional fee', i.e. additive to the MDM licensing fee rather than a component of or credit against it, so overlaps_with is null. |
All fees in Item 6 are payable to Great Clips, which states it collects no fees on behalf of third parties. The Continuing Franchise Fee, Continuing Advertising Contribution and Recruiting Technology Fee are collected biweekly by automatic bank withdrawal. Great Clips may charge the cost of an audit if an inspection finds a reporting discrepancy of 5% or more, or an underpayment of 2% or more.
Financial performance (Item 19)
What the franchisor actually disclosedWho is represented: Section I / Table 1 covers 4,158 franchised salons in the United States and Canada — the salons that were eligible to be open for the whole of calendar 2025 — out of 4,441 salons eligible to be open at December 31, 2025. The 283 excluded salons were either not authorised to be open on January 1, 2025 and throughout the year, or changed ownership during the year; 108 salons that closed permanently during 2025 are among the excluded. There are no company-owned salons, so the population is entirely franchised. Section II (Tables 2 and 3, sales, expenses and operating cash flow) covers only the 2,376 of those 4,158 salons that submitted sufficient financial statements — the 'Reporting 2025 Salons'. The 1,782 non-reporting salons were not evenly distributed: 1,019 were below and 763 at or above the reporting group's median, and Great Clips states median total sales would have been 2.8% lower had they been included. Canadian-dollar figures were converted at 0.71.
Qualifications: None of the figures were audited or independently verified by Great Clips or its accountants. Table 1 is drawn from franchisee-entered point-of-sale data; Tables 2 and 3 are drawn from financial statements franchisees submitted voluntarily, mostly on a cash basis, and some periods were annualised because they did not match calendar 2025. Canadian-dollar amounts were converted at a fixed 0.71 rate. Table 1 excludes 283 of 4,441 eligible salons, including 108 that closed permanently during 2025, so closures are largely absent from the averages. The cost and cash-flow tables cover only 2,376 salons — about 53% of the system — and Great Clips discloses that the non-reporting salons skewed toward lower sales, with the reporting median 2.8% higher than it would otherwise be. Operating cash flow is not profit: it excludes income taxes, depreciation, amortisation, capital-expenditure reserves and debt service, and the labor line excludes any general-manager or franchisee compensation, so an owner who does not work in the salon must fund that person's pay out of the figure shown. Great Clips states newly opened salons tend to have sales and cash flows significantly below these averages, especially for new franchisees in markets with few existing salons.
View full Item 19 disclosure and tables
Great Clips makes a two-part financial performance representation. The first part reports 2025 gross sales for essentially the whole system: 4,158 franchised salons in the U.S. and Canada averaged $410,783 in total sales, with a median of $390,685 and a spread from $28,036 to $1,082,803; 44.44% of salons reached or beat the average. The second part reports costs and operating cash flow, but only for the 2,376 salons that supplied financial statements — those averaged $422,283 in sales, $338,778 in expenses and $83,504 in operating cash flow (19.77% of sales), with a median of $75,896. A sales-band table shows how sharply that varies: the 188 salons below $250,000 in sales averaged a negative $5,248 of operating cash flow, while the 274 above $600,000 averaged $188,148. The representation does not show net profit, does not deduct owner compensation, debt service, depreciation or taxes, and does not cover the salons that closed or changed hands during the year.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Total sales (service plus product) — salons eligible to be open all of 2025 44.44% of units met or exceeded 1,848 of 4,158 salons attained or exceeded the average. | 2025 Salons (all salons eligible to be open the full year) Average | $410,783 | 4,158 | CY2025 | FDD p.61 |
| Total sales — salons eligible to be open all of 2025 | 2025 Salons Median | $390,685 | 4,158 | CY2025 | FDD p.61 |
| Total sales — lowest single salon Great Clips states this salon was open to customers in only 6 non-consecutive months of 2025 and had no sales in 36 weeks, but stayed in the population because it was eligible to be open all year. | 2025 Salons Low | $28,036 | 4,158 | CY2025 | FDD p.61 |
| Total sales — highest single salon | 2025 Salons High | $1,082,803 | 4,158 | CY2025 | FDD p.61 |
| Service sales only — salons eligible to be open all of 2025 44.35% of units met or exceeded Haircuts, shampooing, conditioning, styling and trims. Median $381,782; range $27,439 to $1,037,494. | 2025 Salons Average | $400,667 | 4,158 | CY2025 | FDD p.61 |
| Product sales only — salons eligible to be open all of 2025 38.7% of units met or exceeded Retail haircare products. Median $8,484; range $0 to $86,446. | 2025 Salons Average | $10,116 | 4,158 | CY2025 | FDD p.61 |
| Total sales — salons that submitted financial statements 44.3% of units met or exceeded Higher than the Table 1 average because the reporting subset skews to higher-volume salons. Range $137,034 to $1,063,124. | Reporting 2025 Salons (2,376 of 4,158) Average | $422,283 | 2,376 | CY2025 | FDD p.62 |
| Total sales — salons that submitted financial statements Great Clips states this median would have been 2.8% lower had all 1,782 non-reporting salons been included. | Reporting 2025 Salons Median | $402,271 | 2,376 | CY2025 | FDD p.62 |
| Total operating expenses 80.23% of total sales. Median $324,531; range $112,352 to $774,106. Comprises labor, occupancy, products, continuing franchise fees, advertising and other. | Reporting 2025 Salons Average | $338,778 | 2,376 | CY2025 | FDD p.62 |
| Labor expense as a share of total sales $207,978 on average. Includes the salon manager but excludes, where identifiable, any labor cost of a general manager or the franchisee. | Reporting 2025 Salons Average | 49.25% | 2,376 | CY2025 | FDD p.62 |
| Occupancy expense as a share of total sales $46,850 on average: rent, CAM, real estate taxes, percentage rent and other lease-related charges. | Reporting 2025 Salons Average | 11.09% | 2,376 | CY2025 | FDD p.62 |
| Total expenses as a share of total sales | Reporting 2025 Salons Average | 80.23% | 2,376 | CY2025 | FDD p.62 |
| Average sales of the lowest sales band (under $250k) Median sales in this band were $221,198; labor absorbed 58.81% of sales and total expenses 102.46%. | Reporting 2025 Salons with sales under $250,000 (188 salons, 7.91%) Average | $213,290 | 188 | CY2025 | FDD p.63 |
| Average sales of the highest sales band (over $600k) Median sales in this band were $675,303. | Reporting 2025 Salons with sales over $600,000 (274 salons, 11.53%) Average | $695,605 | 274 | CY2025 | FDD p.63 |
| Salons per franchisee among franchisees operating for more than five years The median for the same group is 5 salons. The FDD does not state how many franchisees fall in this group. | Franchisees with more than five years in the system Average | 9 | n/s | As of Dec 31, 2025 | FDD p.59 |
Disclosed cost and profit figures
These figures are disclosed by the franchisor for the population stated in each row — often a subset (company-owned units, or franchisees who chose to report). They frequently exclude owner compensation, rent, debt service, taxes or royalties. They are not a prediction of your results.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Operating cash flow (total sales less total expenses) 19.77% of total sales. Excludes income taxes, depreciation, amortisation and any reserve for future capital expenditure; also excludes debt service and any owner's salary or draw. | Reporting 2025 Salons Average | $83,504 | 2,376 | CY2025 | FDD p.62 |
| Operating cash flow | Reporting 2025 Salons Median | $75,896 | 2,376 | CY2025 | FDD p.62 |
| Operating cash flow as a share of total sales | Reporting 2025 Salons Average | 19.77% | 2,376 | CY2025 | FDD p.62 |
| Operating cash flow — highest single salon | Reporting 2025 Salons High | $336,116 | 2,376 | CY2025 | FDD p.65 |
| Operating cash flow — lowest single salon The lowest reporting salon recorded a negative operating cash flow. | Reporting 2025 Salons Low | −$130,672 | 2,376 | CY2025 | FDD p.65 |
| Operating cash flow of the lowest sales band (under $250k) Negative 2.46% of sales — this band averaged a cash loss before owner compensation and debt service. | Reporting 2025 Salons with sales under $250,000 Average | −$5,248 | 188 | CY2025 | FDD p.63 |
| Operating cash flow of the highest sales band (over $600k) 27.05% of sales. | Reporting 2025 Salons with sales over $600,000 Average | $188,148 | 274 | CY2025 | FDD p.63 |
System health (Item 20)
Outlets, openings, exits and transfers by fiscal yearView detailed Item 20 tables and source notes
| Fiscal year | Start | Opened | Terminated | Not renewed | Reacquired | Ceased — other | End | Transfers | Company-owned (end) |
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 4,427 | 98 | 3 | 6 | 0 | 89 | 4,427 | 164 | 0 |
| 2024 | 4,427 | 115 | 4 | 1 | 0 | 98 | 4,439 | 207 | 0 |
| 2025 | 4,439 | 110 | 3 | 2 | 0 | 103 | 4,441 | 175 | 0 |
Disclosed 2026 Franchise Disclosure Document — Great Clips, Inc., Item 20, Tables 1–3 (PDF p. 68). Counts cover the United States and Canada together; the tables list Canadian provinces alongside U.S. states and no U.S.-only subtotal is given. All three Table No. 3 totals foot exactly. The system was essentially flat over the period: 4,427 franchised salons at the start of 2023 and 4,441 at the end of 2025, a net gain of 14 over three years, with 323 openings offset by 10 terminations, 9 non-renewals and 290 salons that ceased operations for other reasons. Great Clips notes that the 'ceased operations — other' column includes salons closed while being relocated under its Relocation Policy, and that 23 salons closed and then relocated and reopened within 2025, so that column overstates permanent exits; Item 19 separately states 108 salons in the U.S. and Canada closed permanently during 2025. Transfers of a controlling interest affected 546 salons over the three years, and Great Clips notes many involved multiple units moving between like parties and that a single unit may appear more than once in a year. Great Clips exercised its right of first refusal on 3 of the 207 transfers in 2024. Item 20 also discloses that Great Clips has signed confidentiality clauses with current or former franchisees as part of dispute settlements, which may restrict what some of them can say about their experience.
Source data notes (6) — inconsistencies found in the FDD itself during verification
Our verification re-reads every table. Where the FDD's own printed tables disagree, we document the discrepancy rather than silently "fixing" it. Classes: B = arithmetic error in the source's derived column; C = the printed tables genuinely disagree; D = a legitimate definitional difference (e.g., transfers netted, explained by a footnote); E = unresolved ambiguity. Figures a material C/E issue puts in doubt are excluded from our derived metrics, scores and rankings.
- [D/minor] Table 3 2025: Footnote 1 defines the 'Ceased Operations - Other Reasons' column to include franchised salons closed and in the process of relocating under the Relocation Policy, and footnote 3 discloses that 23 salons closed and then relocated/reopened within fiscal 2025. Those 23 are not broken out of the 103 salons in the FY2025 column, so gross closures overstate true system exits. — Legitimate table definition, explained by footnotes 1 and 3 on p.68. The printed figures are correct as defined and the TOTAL row is corroborated: Table 3's FY2025 exits of 103 other + 3 terminations + 2 non-renewals = 108 match Item 19's statement that '108 GREAT CLIPS salons in the United States and Canada closed' during the 2025 Period. For a true-exit view, net the 23 relocation closures out of the 103, giving roughly 80 permanent 'other' closures in FY2025 (about 0.5 pp of the attrition rate).
- [D/material] Table 1 / Table 2 / Table 3 / Table 5: Every Item 20 table is systemwide North America: Alberta, British Columbia, Ontario and Saskatchewan appear in the state/province breakdowns (Manitoba appears in Table 5 only), and the FDD gives no U.S.-only subtotal. The Table 1 and Table 3 totals of 4,427 / 4,439 / 4,441 therefore include Canadian salons. — The tables are correct for their disclosed scope - the column header reads 'State/Province' - but the totals are not U.S.-only. Canadian salons at 31 Dec 2025 total 153 (Alberta 46, British Columbia 44, Ontario 62, Saskatchewan 1), so U.S.-only franchised units are about 4,288 against the printed 4,441. That gap is 3.4% of start-of-year franchised units, far above the 0.5% threshold, so any U.S.-labelled unit count must either be relabelled North America or reduced by the province rows. Item 19 has the same combined scope and converts Canadian dollars at 0.71.
- [D/minor] Table 2 2024: Footnote 2 discloses that in 3 of the 207 total 2024 transfers Great Clips exercised its contractual right of first refusal and simultaneously transferred the salons to a new owner, rather than an independent franchisee-to-franchisee sale. Footnote 1 also warns that the column counts salons affected by a controlling-interest transfer, so multi-unit deals and repeat transfers of one unit can both inflate the count. — Footnote-explained definition, not an error. The printed totals (2023: 164, 2024: 207, 2025: 175) foot across the 56 state/province rows and stand as published; treat 204 of the 207 FY2024 transfers as arm's-length and read all transfer counts as salons affected rather than distinct transactions.
- [C/minor] Table 5 2025: Table 5's state list does not match Tables 2 and 3. Delaware (13 salons at the start of 2023) and Wyoming (7 salons at the start of 2025, 5 at year end) appear in Tables 2 and 3 but are omitted from Table 5 entirely, while Manitoba appears in Table 5 (all zeros) but appears nowhere in Table 3. Table 5 lists 54 rows against 56 in Tables 2 and 3, and no footnote explains the difference. — The printed tables genuinely disagree on state coverage: Table 3 p.68 carries 'WYOMING 2025 7 0 0 0 0 2 5' and 'DELAWARE 2023 13 ...', neither of which appears in Table 5 p.69-70, whose list runs 'WISCONSIN 16 0 0' straight to 'Total 903 85 0'; conversely Table 5 p.69 prints 'MANITOBA 0 0 0' with no Manitoba row in Table 3. The totals are unaffected: Table 5's 54 rows sum exactly to the printed 903 signed-not-open and 85 projected openings, and the Table 3 totals are corroborated by Table 1 and by Item 1's 'approximately 4,441 salons'. Omitted states carry zero projections, and the discrepancy touches only the state-level projection view.
- [D/minor] Table 5 2025: Table 5 shows 903 franchise agreements signed but not opened against only 85 projected new franchised openings in the next fiscal year, while actual openings ran 98, 115 and 110 in 2023-2025. — Not a footing or extraction problem - both columns sum exactly to the printed totals. The two columns measure different things: the backlog counts all outstanding development commitments, which under Three Star and Master Development Agreements run on 24-month and 10-year windows, while the second column is a single-year projection. The imbalance is a signal about backlog duration or projection conservatism, not a table error, and the totals the site uses are corroborated.
- [D/minor] Table 1 / Table 3 2025: Net system growth is essentially flat - 0, +12 and +2 outlets across 2023-2025 on a base of about 4,430 - and Pass B flagged Item 19's statement that 108 salons closed during 2025 against Table 3's 103 'Ceased Operations - Other Reasons'. — No discrepancy. Item 19's 108 is total FY2025 closures and reconciles exactly to Table 3: 103 ceased-other + 3 terminations + 2 non-renewals = 108. The flat net change is a real result, not a table defect: Table 1's Net Change column (0, 12, 2) matches the Table 3 start/end totals (4,427/4,427, 4,427/4,439, 4,439/4,441) in all three years.
Company-owned outlets (Table 4)
| Year | Start | Opened | Reacquired from franchisee | Closed | Sold to franchisee | End |
|---|---|---|---|---|---|---|
| 2023 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2024 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2025 | 0 | 0 | 0 | 0 | 0 | 0 |
Read: How to read Item 20.
Ownership and operations
Items 11, 12, 15, 17Manager-run permitted Disclosed
- Source
- 2026 Franchise Disclosure Document — Great Clips, Inc.
- Document
- FDD 2026, issued 2026-03-30
- Item
- Item 15
- Page
- PDF p. 52
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640577
The GREAT CLIPS® franchise system is comprised of owner-operated franchised locations.
Item 15 describes the system as owner-operated and requires the franchisee to devote best efforts to managing the business, but permits the salon to be managed or operated on a regular basis through a Designated Operator or a member of the salon management team who has completed the Great Clips Academy and all required manager training, so the owner is not required to be on site full time. The franchisee must personally complete all required franchisee training. Independent contractors may not be used to staff the salon, and stylists must be licensed by the state cosmetology board. Item 19 notes franchisees with more than five years in the system operate an average of 8.5 salons, which is consistent with delegated day-to-day management.
View operating requirements, territory and contract term
| Owner involvement (Item 15) | Manager-run permitted Disclosed
Item 15 describes the system as owner-operated and requires the franchisee to devote best efforts to managing the business, but permits the salon to be managed or operated on a regular basis through a Designated Operator or a member of the salon management team who has completed the Great Clips Academy and all required manager training, so the owner is not required to be on site full time. The franchisee must personally complete all required franchisee training. Independent contractors may not be used to staff the salon, and stylists must be licensed by the state cosmetology board. Item 19 notes franchisees with more than five years in the system operate an average of 8.5 salons, which is consistent with delegated day-to-day management. Item 15 describes the system as owner-operated and requires the franchisee to devote best efforts to managing the business, but permits the salon to be managed or operated on a regular basis through a Designated Operator or a member of the salon management team who has completed the Great Clips Academy and all required manager training, so the owner is not required to be on site full time. The franchisee must personally complete all required franchisee training. Independent contractors may not be used to staff the salon, and stylists must be licensed by the state cosmetology board. Item 19 notes franchisees with more than five years in the system operate an average of 8.5 salons, which is consistent with delegated day-to-day management. |
|---|---|
| Initial training | The QuickConnect Franchisee Training Program totals about 49.6 hours of classroom training plus 13 hours of on-the-job training. It blends self-paced Great Clips University online modules, phone and webinar calls, a 3.5-hour live virtual Great Clips Academy session, 18 hours of live virtual LEADS management sessions, 13 hours of in-salon training in the franchisee's own market (usually in an existing franchisee's salon), and two days (12.5 hours) of in-person Building Your Legacy classroom training in Minneapolis, Minnesota, held about twice a year. The Designated Operator named in the Franchise Agreement and any partners who will be actively involved must complete the program within 180 days of signing the first Franchise Agreement. Great Clips charges no fee for the program; the franchisee pays travel, expenses and attendee wages. Salon management and key brand-delivery staff such as stylists must complete Great Clips Academy within 30 days of hire, and managers must complete LEADS within 90 days of hire or promotion; an annual $200 per salon Training Fee covers these programs. Disclosed
Hours are the totals printed at the foot of the Item 11 training tables. Great Clips reserves the right to increase or establish training fees and to modify the programs. |
| Multi-unit / development options | Three routes to more than one salon are disclosed. The Three Star Program is a lease-signing incentive: the franchisee signs three Franchise Agreements plus a Three Star Program Agreement and pays a non-refundable $35,000 Program Fee plus $5,000 to the advertising fund, instead of $20,000 plus $5,000 per agreement, and must have an executed lease for each of the three within 24 months or forfeit the benefit for any agreement without a lease. A Master Development Agreement grants an exclusive television Designated Market Area for a 10-year term in return for a $4,000 per salon development fee (minimum two salons) plus a $6,000 Initial Franchise Fee per Franchise Agreement; the number of salons is set by a Great Clips formula of one unit a year per ten units of assessed market potential. Great Clips states the number of markets where a Master Development Agreement is available is extremely limited. A Deferral Program defers, but does not waive, the $25,000 of initial fees for an additional salon opened inside an existing salon's protected area. Great Clips has no obligation to grant existing franchisees further agreements. Disclosed
Drawn from Items 1, 5, 7 and 12. Item 19 states franchisees with more than five years in the system operate an average of 8.5 and a median of 5 salons. |
| Territory (Item 12) | No exclusive territory is granted. The franchisee receives a Protected Area defined as a three-quarter mile radius from the salon's primary customer entrance, reduced to a one-tenth mile radius where Great Clips determines in advance that the salon is in a densely populated area. Great Clips agrees not to operate or franchise Great Clips salons inside the Protected Area, and the area is not reduced if the population grows, but the franchisee may add salons inside it only with consent. Non-Traditional Locations — military bases, airports and transit terminals, college campuses, inside grocery, club and big-box stores, business and industrial sites, amusement parks, casinos, community and special events, racing and sporting events — are carved out of the Protected Area and may be developed by Great Clips. There is no minimum sales quota, sales volume or market-penetration condition attached to keeping the area. Great Clips and its affiliates may operate competing businesses under other brands anywhere, including inside the Protected Area, and may sell branded products through other channels such as the Internet and third-party marketplaces. Under a Master Development Agreement the developer receives an exclusive Designated Market Area for as long as it stays on the development schedule. Disclosed
Franchisees may not use the Internet, catalogue sales, telemarketing, texting or similar channels to solicit business for the salon without prior written consent. |
| Initial term | 10 years Disclosed
Ten years from the date the salon opens; if an existing salon is bought, the term is the balance of that salon's agreement. A Master Development Agreement also runs 10 years from acceptance; a Three Star Program Agreement runs 24 months and cannot be extended. |
| Renewal | The Franchise Agreement gives no right to renew. Great Clips may, in its sole determination, grant one additional 10-year term if the franchisee gives the required notice, is in compliance with the agreement and Great Clips' policies, upgrades the salon to then-current standards, pays the renewal fee (currently $1,750), re-attends training if Great Clips requires it, and signs a general release and the then-current form of Franchise Agreement. Great Clips states the renewal agreement may contain materially different terms from the original. Disclosed
|
| Staffing | A typical Great Clips salon is about 900 to 1,200 square feet. The franchisee is solely responsible for recruiting, hiring, supervising, paying and discharging staff, may not use independent contractors, and must ensure every stylist is licensed by the state cosmetology board or equivalent. All salon employees must complete Great Clips Academy training. The Item 7 additional-funds estimate of $20,000 to $60,000 covers initial payroll including pre-opening training wages but excludes any owner's salary or draw. The FDD does not state a required number of employees or salon operating hours; Item 19 notes hours varied from salon to salon during 2025. Disclosed
Square footage from Item 7 note 4; additional funds from the Item 7 table; hours-of-operation observation from Item 19 Section I. |
Risk and legal observations
Items 3, 4, 8, 15, 17 — summarized neutrallyLitigation: None disclosed Disclosed · Bankruptcy: None disclosed Disclosed
View legal disclosures, restrictions and guarantees
| Litigation (Item 3) | None disclosed Disclosed Item 3 states that no litigation is required to be disclosed. No pending or concluded actions involving the franchisor or its management are listed. |
|---|---|
| Bankruptcy (Item 4) | None disclosed Disclosed Item 4 states that no bankruptcy information is required to be disclosed. |
| Personal guaranty | Required Disclosed
If the franchise is held by a business entity, the franchisee and every shareholder holding any equity interest at all must personally guarantee full and timely performance of all obligations under the Franchise Agreement, including all fees, and must sign the guaranty form Great Clips designates. Item 17 also requires an assignee and each of its shareholders to sign the guaranty. |
| Non-compete | During the term, the franchisee and the franchisee's spouse may have no involvement of any kind in any haircare or personal grooming business, beauty, cosmetology or barber school, or any business selling hair products, at any location or over the Internet. After termination, assignment or expiry the same restriction runs for one year anywhere within five miles of any Great Clips salon. Item 15 frames the same covenant to include leasing property to, consulting for or sharing the earnings of such a business, and extends the post-term restriction to Internet activity, subject to state law. Disclosed
The five-mile radius is measured from any Great Clips salon, not only the franchisee's own, so its practical reach depends on system density in the market. |
| Transfer restrictions | Every assignment, however minor, needs Great Clips' prior written consent, which it states will not be unreasonably withheld. Any ownership change that alters the percentage of ownership counts as a transfer. Great Clips may withhold consent where the assignee is not personally or financially qualified, does not meet then-current new-franchisee guidelines, is an existing franchisee not eligible to expand, has conflicting interests, will not devote best efforts, or cannot communicate in English. The assignee signs the then-current Franchise Agreement but only for the balance of the assignor's term, assumes unpaid initial franchise fee and advertising-fund amounts, and signs a general release and guaranty; an assignment fee of currently $1,500 per salon applies. A salon that is not in operation, or is temporarily closed pending relocation, generally may not be assigned unless the franchisee is selling all salons and leaving the system. Great Clips holds a right of first refusal with 60 days to match a bona fide offer, and a further 60 days if the offer changes; an unmatched offer must close within 120 days or Great Clips may re-evaluate and match. Heirs who wish to continue operating must apply for consent and pay any assignment fee. Disclosed
Item 20 records transfers affecting 164, 207 and 175 salons in 2023, 2024 and 2025 respectively, so transfers are common in this system. |
| Termination / non-renewal | Great Clips has no right to terminate without cause. The franchisee may terminate only for good cause or on grounds available at law. Great Clips may terminate for cause, including failure to open the salon within 24 months of accepting the Franchise Agreement, loss of good standing before a lease is signed, failure to complete required training, speculative conduct before opening, and breach of the agreement. Curable defaults carry a seven-day cure period for non-payment and 30 days in other cases, and notice of termination may be given at the same time as notice of default. A list of non-curable defaults allows immediate termination: impairing the marks or system, insolvency, assignment for creditors, admitting inability to pay debts, abandonment, conviction of or a guilty or no-contest plea to any offence, unconsented assignment, failure to renew properly, material misrepresentation in the franchise application, failure to cure a lease default in time, unauthorised use of confidential information, and material misuse of customer data. Repeated breaches or an incurable material breach permit termination on 30 days' written notice. On termination or non-renewal the franchisee must stop using the marks, assign the salon telephone number to Great Clips, pay all sums owed, return manuals, de-identify the premises, sign a general release and observe the non-compete; Great Clips may also buy the salon equipment and furnishings at an appraised price. Disclosed
There is no minimum sales quota or performance requirement attached to keeping the Protected Area (Item 12). |
| Supplier restrictions (Item 8) | Purchasing is tightly controlled and the cover page flags supplier control as a special risk. Great Clips itself is currently the only supplier of lobby, sales-area, flex-station and signage items — reception desks, workstations, mirrors, chairs, flooring, graphics and illuminated signage. Salon Innovations, Inc. is the only designated supplier of Great Clips exclusive-brand haircare products; Salon Innovations and Ideal Printers are the designated suppliers for paper goods and business forms. Franchisees must also carry named third-party product lines, license point-of-sale software from Innovative Computer Software, buy or rent a standardised hardware package through a designated integrator, and process all electronic payments through Global Payments. Great Clips states that required purchases account for roughly 90% to 95% of the goods and services bought when establishing a salon and roughly 80% to 85% of ongoing purchases. In the year ended December 31, 2025 Great Clips' revenue from required purchases was $17,175,075, or 14.6% of its total revenue of $117,518,218, and it received a further $551,941 (0.5% of revenue) in product royalties equal to about 6% of exclusive-brand haircare products sold to franchisees by Salon Innovations. Great Clips has no affiliates that are approved suppliers and no officer holds an interest in an approved supplier; there is no purchasing cooperative. Franchisees may request approval of alternative suppliers and Great Clips will respond within 90 days of receiving the required information, but may charge the evaluation cost to the franchisee or the supplier. Disclosed
Great Clips states it does not currently provide material benefits to franchisees based on use of designated sources, and reserves the right to receive promotional allowances, rebates and commissions from vendors. |
| Dispute resolution | All disputes must be arbitrated in Minneapolis, Minnesota, subject to certain exceptions, and all legal proceedings must be brought in Hennepin County, Minnesota. Governing law is the law of the state where the salon is located. The cover page carries a state-required risk warning that out-of-state dispute resolution may force the franchisee into a less favourable settlement and may cost more than resolving disputes locally. State addenda may override these provisions in some states. Disclosed
Item 17 does not describe a jury-trial waiver; the reviewed text covers the Item 17 table only, not the full Franchise Agreement in Exhibit F. |
- Remodelling is mandatory every seven to ten years at an estimated $20,000 to $80,000 per salon, plus $3,000 to $9,000 a year in ongoing maintenance and improvements — recurring capital costs that sit outside the Item 7 initial investment.
- Combined ongoing fees payable on gross sales are 11% before local advertising: a 6% Continuing Franchise Fee and a 5% Ad Fund contribution, both collected biweekly by automatic bank withdrawal, with a further 1–3% of gross sales that Great Clips says is likely needed for incremental local advertising.
- No exclusive territory is granted; the standard Protected Area is a three-quarter mile radius, shrinking to one-tenth of a mile in areas Great Clips designates as densely populated, and Non-Traditional Locations inside the area may be developed by Great Clips.
- Item 20 discloses 903 signed franchise agreements without an open salon at December 31, 2025 against 85 openings projected for the following year, indicating a large backlog of committed but unopened units.
- Great Clips has signed confidentiality clauses with current or former franchisees as part of dispute settlements, and states some of them may be restricted in speaking openly about their experience.
- Great Clips must approve any closure or relocation, and the Item 20 'ceased operations — other' column includes salons closed while relocating, so year-to-year closure counts mix permanent exits with relocations.
- The Franchise Agreement may be cancelled if the salon does not open within 24 months of acceptance, and the Initial Franchise Fee on a first agreement is non-refundable in that case.
- Great Clips reserves the right to sell branded products through other channels, including third-party marketplaces such as Amazon, and to operate competing businesses under other brands, in each case without compensating franchisees.
Summaries are neutral paraphrases of the cited document and are not legal advice. Read the full Items in the current FDD and consult a franchise attorney.
Illustrative unit economics
Model estimateModel estimate — not disclosed by the franchisor, not a forecast. Fee lines below come from this brand's verified FDD fee schedule and are computed exactly as disclosed (each line shows its arithmetic). Operating-cost ratios are category placeholders we chose — every one is editable and labeled assumption. Results are illustrative arithmetic, not expected returns. Every figure here belongs to one of five labeled categories — disclosed inputs, model assumptions, unmodeled mandatory fees, user-editable assumptions, and exclusions — defined in our methodology. This brand's Item 19 also discloses some cost or profit data — see the Item 19 section, which takes precedence over any assumption here.
| Line (annual) | Downside | Base | Upside |
|---|---|---|---|
| Revenue (AUV basis) | $328,626 | $410,783 | $472,400 |
| − Cost of goods / supplies assumption | $26,290 | $32,863 | $37,792 |
| − Payroll (excl. owner) assumption | $147,882 | $184,852 | $212,580 |
| − Occupancy assumption | $39,435 | $49,294 | $56,688 |
| − Other operating expenses assumption | $39,435 | $49,294 | $56,688 |
| − Continuing Franchise Fee disclosed 6% of gross sales = $24,647 |
$19,718 | $24,647 | $28,344 |
| − Continuing Advertising Contribution to the Ad Fund disclosed 5% of gross sales = $20,539 |
$16,431 | $20,539 | $23,620 |
| − Local Advertising and Sales Promotion (incremental to the 5% Ad Fund) assumption 1% of revenue (your assumption; FDD requires at least 1% — Engaging in local advertising and sales promotion is contractually required; the 1-3% is Great Clips' competitive expectation, not a stated contractual minimum.) = $4,108 |
$3,286 | $4,108 | $4,724 |
| − Training Fee (Great Clips Academy, LEADS, GCU) disclosed $200 per year |
$200 | $200 | $200 |
| − Local Co-op Dues assumption $1,200/yr (seeded from the disclosed floor) |
$1,200 | $1,200 | $1,200 |
| − Recruiting Technology Fee (RTF) disclosed $750 per year |
$750 | $750 | $750 |
| − Salon Ongoing Maintenance Costs disclosed $3,000 per year |
$3,000 | $3,000 | $3,000 |
| − Salon Technology Software License (Styleware Suite) disclosed $250/month × 12 = $3,000 |
$3,000 | $3,000 | $3,000 |
| − Global Payments Merchant Protection Program Fee disclosed $5/month × 12 = $60 |
$60 | $60 | $60 |
| − Payment Terminal Warranty and Support Program Fee disclosed $5/month × 12 = $57 |
$57 | $57 | $57 |
| − Network and Hardware Managed Services Fee (The Foundation) disclosed $21/month × 12 = $252 |
$252 | $252 | $252 |
| − Meraki Router Maintenance Fee (The Foundation) disclosed $26/month × 12 = $312 |
$312 | $312 | $312 |
| − Mobile Device Management Licensing Fee (The Foundation) assumption $60/yr (seeded from the disclosed floor) |
$60 | $60 | $60 |
| = Modeled operating result before the items below (EBITDA-style) | $27,258 | $36,295 | $43,073 |
| − Manager compensation assumption | $55,000 | $55,000 | $55,000 |
| = Modeled result after manager compensation | −$27,742 | −$18,705 | −$11,927 |
| − Illustrative debt service assumption | $34,440 | $34,440 | $34,440 |
| = Illustrative pre-tax cash flow — before taxes, capital expenditures and unmodeled fees | −$62,182 | −$53,145 | −$46,367 |
| Modeled operating margin | 8.3% | 8.8% | 9.1% |
This modeled result is not owner income. It excludes: income taxes; capital expenditures and equipment-replacement reserves; working-capital needs; ramp-up losses; owner-specific costs; one-time and per-event fees (transfer, renewal, audit); and 3 mandatory fee(s) whose amounts the FDD does not state (listed below — real outflows are higher by these amounts). It is illustrative arithmetic on stated assumptions, not a promise or forecast of what a franchisee earns.
Mandatory fees disclosed but not quantified — not included in the modeled result: the FDD requires these but states no amount (e.g. billed at "then-current" rates). They are never modeled as $0. If you have a quote or estimate, enter an annual amount to include it as your own assumption:
- Insurance Coverage (Property & Public Liability) (Item 6, p. 21) — requires an amount the FDD does not state — enter your own figure
- Salon Upgrades (periodic remodel) (Item 6, p. 22) — Treat as periodic capex, or amortise $20,000-$80,000 over seven to 10 years (roughly $2,000-$11,400 per year).
- Global Payments Per-Transaction Processing Fee (Item 11, p. 41) — Requires a transaction-count assumption. A separate one-time $15 per-salon set-up fee is carried as payment-terminal-setup-fee.
Every figure in this table is a model estimate built on the disclosed fee schedule plus labeled assumptions. Excluded: income taxes, owner draw, working-capital swings, capital expenditures, ramp-up losses in year one, one-time and per-event fees (transfer, renewal, audit), and the undisclosed-amount fees listed above. Read AUV vs. EBITDA vs. owner income before using this.
Sources and provenance
Primary source: 2026 Franchise Disclosure Document — Great Clips, Inc. · issued 2026-03-30. Find the FDD at Wisconsin Department of Financial Institutions — Franchise Registration Search. We cite source pages and do not redistribute PDFs.
View all sources, provenance and verification notes
| Document | Obtained from | Dates | Status |
|---|---|---|---|
| 2026 Franchise Disclosure Document — Great Clips, Inc. Registry file 640577 · 413 pages Registered in Wisconsin with a registration effective date of March 30, 2026. Financial and outlet data cover fiscal years 2023 through 2025. | Wisconsin Department of Financial Institutions — Franchise Registration Search | Issued 2026-03-30 Retrieved 2026-08-29 | Newest available at retrieval |
AI-assisted extraction from the archived FDD text, independently machine-verified against the cited source (two passes plus tie-break); not human-reviewed. Extracted 2026-08-29. Last updated 2026-09-05. AI-assisted extraction independently machine-verified against the cited source document (2026-09-02): two independent AI reading passes plus tie-break re-inspection of every disagreement; 73 of 77 material fields confirmed (69 with the exact page citation re-confirmed), 0 corrected, 1 unresolved, 3 confirmed not disclosed. No human has reviewed this profile. Fiscal year covered: FY2025 (Dec 31, 2025). See how we use AI and verify data.
Fields flagged as uncertain (4)
- investment.franchise_fee_low / investment.franchise_fee_high — recorded as $25,000, the sum of the two mandatory initial payments to Great Clips for a standard single unit ($20,000 Initial Franchise Fee plus the $5,000 non-refundable Initial Advertising Contribution to the MDAF, both due on signing the first Franchise Agreement). A reader looking only for the line item labelled 'Initial Franchise Fee' will see $20,000.
- investment.additional_funds_months — Item 7 states a 3 to 6 month range; 6 is recorded as the upper bound because the schema takes a single integer.
- operations.owner_involvement — recorded as manager_permitted. Item 15 calls the system owner-operated and requires the franchisee's best efforts and completion of franchisee training, but expressly allows the salon to be managed on a regular basis through a Designated Operator or a trained salon management team member, so the owner need not be on site full time. A stricter reading would classify this as owner_operator_required.
- item19.population_share_of_system — 93.6% is 4,158 Table 1 salons divided by the 4,441 salons eligible to be open at December 31, 2025, as both figures are stated in Item 19.
Extraction notes (9)
- Item 20 counts cover the United States and Canada together (Alberta, British Columbia, Ontario and Saskatchewan appear alongside U.S. states) and Great Clips publishes no U.S.-only subtotal, so item20.us_only and units.us_only are false rather than true.
- All three years of Item 20 Table No. 3 foot exactly (start + opened − terminations − non-renewals − reacquisitions − ceased other = end), and Table No. 1 franchised end-of-year figures match Table No. 3. The Item 7 total row also foots exactly to its line items at both ends of the range.
- The 'ceased operations — other' column in Table No. 3 includes salons closed while being relocated under the Great Clips Relocation Policy; 23 salons closed and reopened after relocating within 2025. Item 19 separately states 108 salons closed permanently during 2025, so the 103 figure in Table No. 3 is not a clean count of permanent exits.
- Item 19 amounts include Canadian salons, with Canadian-dollar figures converted to U.S. dollars at a fixed 0.71 rate, and none of the data was audited or independently verified.
- fees.local_marketing records the 1–3% figure Great Clips gives as the incremental local spend a franchisee will likely need to stay competitive; Item 6 requires local advertising activity but sets no contractual percentage minimum.
- fees.technology records the $250 monthly point-of-sale software licence from Item 11 rather than the $750 annual Recruiting Technology Fee from the Item 6 table, which is listed under other_recurring.
- No minimum liquid-capital or net-worth requirement appears anywhere in the cover pages or Items 1 through 20 of the reviewed document.
- The reviewed document is the 2026 FDD issued March 30, 2026 and registered in Wisconsin on the same date, so it is treated as current.
- Verification 2026-09-02: flag_unresolved /investment/additional_funds_months
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