PRESANTATION ON GREAT CLIPS

HAIR SALOON

SUBMITTED TO- SUBMITTED BY-

PROF HERSH SHARMA SHAILESH PATEL
 INTRODUCTION

Established in 1982, Minneapolis, Minnesota USA

Great Clips started franchising in 1983 and now has locations throughout the United
States and Canada. Usually located in strip malls

Great Clips® salons are specialized and distinctive retailers of hair care and personal
grooming services

The salons offer consistent, high quality, affordable, limited hair care services and a
limited selection of products designated by Great Clips to men, women and children in a
distinctive retail environment.
 Franchise Offer 
The franchise described in this disclosure document is a license to develop and operate a
single Great Clips® salon offering a required line of hair care services and products from a
designated location, customarily in a shopping center, identified by trademarks licensed by
the franchisor and using distinctive trade dress and business methods prescribed by Great
Clips.

Development agreement – offered to qualified individuals, where the franchisee commits

to open a minimum number of Great Clips® salons in a specified area within a given period
of time.
Financial Assistance
Neither Great Clips, its agents, nor its affiliates offer financing arrangements for the
purchase of the Great Clips® salon.

Great Clips, at its sole and absolute discretion, may guaranty a lease for a franchisee. In
consideration for such a guaranty, the franchisee will be charged a $3,000 non-refundable
lease liability fee which will be included in the equipment order placed with Great Clips for
the salon.
 Training and Assistance
 
Great Clips provides training to the franchisee, stylists and management staff of the Great
Clips salon.

Franchisee Orientation and Training is currently held in Minneapolis, Minnesota, where new
franchisees are scheduled to attend after their Franchise Agreement is accepted by Great Clips.

There is 33 hours of classroom training included in the orientation.

The franchisee, management staff and stylists must attend and complete all Great Clips
Academy for Hair training requirements. This includes 24 hours of classroom training at the
nearest available training facility. There is no fee to train the franchisee or first 15 stylists
(including three initial management staff).

The LEADS for Management Staff training modules are compulsory for both franchisee and
management staff, and include 42 hours of classroom training.
 Territory
The franchisee will receive a protected area consisting of a circular area defined by a
radius of three-quarters of a mile from the primary customer entrance of the salon.

Term of Agreement and Renewal

The term of the Franchise Agreement is 10 years from date of opening of the salon, and
provides for consecutive additional renewal terms of 10 years each.

Obligations and Restrictions:

The franchisee must devote their best efforts to the management and operation of the
Great Clips® business, but are not required to personally manage the salon.
Expenditures Low High
Initial Franchise Fee $20,000 $20,000

Initial Advertising -Contribution $5,000 $5,000

Travel and Living Expenses While

Training $1,500 per participant $2,500

Architecture Fees $500 $3,000

Leasehold Improvements, including
Labor $20,000 $50,000

Rent and Security Deposits $1,000 $8,000

Fixtures, Signage and Furnishings,
including Computer $30,000 $40,000
Freight $1,200 $2,200
Sales Tax on Fixtures, Signage and
$0 $1,500
Furnishings

Opening Inventory and Supplies $4,700 $6,400

Grand Opening Advertising $12,000 $12,000

Insurance $1,500 $2,400
Lease Liability Fee $0 $3,000

Lease Review Fee $0 $1,500

Additional Funds (6-12 Months) $12,000 $45,000
Total $109,400 $202,500
 Ongoing Fees:
Name of Fee Amount
Continuing Franchise Fee 6% of the franchisee's Gross Sales

Sales or other taxes due on Continuing Franchise Fee As imposed by state or local government

Continuing Advertising Contribution to the North American

Advertising Fund 5% of the franchisee's Gross Sales

Additional Training:
1)    The Great Clips Academy for Hair $40 per participant
$100 per participant
2)    LEADS for Management Staff: Module 1
3)   LEADS for Management Staff: Module 2 $125 per participant

Renewal Fee $1,750

Assignment Fee $1,500 per salon
Local Co-op Dues Average of $100 per month
Insurance Coverage $1,500-$2,400 per year
Software License and Support Fee $89.50 per month
Gift Card Processing Fee $0.12 per transaction
Lease Liability Fee $0 - $3,000
Out-of-Pocket Expenses Related to Lease or Sublease As incurred
Assignment

Real Estate Commission As incurred

Accrued interest of 18% per annum or the highest interest

Late Charges
allowed by law in the state where the salon is located

Audit or Inspection Cost Cost of audit

Taxes, Business Debts or Liens As applicable

The Resale Program Service Fee is the greater of $5,000 or 5%

Resale Program Service Fee of the selling price of the Great Clips business, not to exceed
$20,000; or a Broker Fee of $17,000

Salon Upgrades Approximately $40,000

Ongoing Maintenance Costs Approximately $2,500
 FRANCHISE UNITS

Year U.S. Franchises Canadian Foreign Company Owned

Franchises Franchises

2010 2,787 64 0 1

2009 2,682 56 0 0

2008 2,633 55 0 0

2007 2,544 56 0 0
THANK YOU