Year Business Began: 1993
Franchising Since: 1995
Headquarters: Georgetown, Texas
Estimated Number of Units: 1,900
Franchise Description: Sport Clips, Inc. is the franchisor. The services and products of Sport Clips stores are offered to all segments of the public, and the businesses are generally located in strip center locations. Sport Clips franchisees sell, primarily to men and boys, hair cutting services and hair care products in an environment with a sports theme and multiple televisions featuring sports programming. Sport Clips franchisees operate the franchise pursuant to the franchisor’s system, which includes the franchisor’s standards, specifications, approved products, methods and procedures. The system also includes the use of the trademark and trade name “Sport Clips.”
Training Overview: The training program is mandatory for all new franchisees. It is conducted at the franchisor’s office in Georgetown, Texas. Training is usually one or two weeks in duration, depending on the skill level and experience of the manager. In addition to the classroom and field training, the initial training program will also include self-paced activities and eLearning modules that will take approximately 30 hours to complete. During the week before the franchisee’s first store opens and for three to five days after the store opens, the franchisor or area developer will provide on-site assistance to franchisees at their store location. The franchisor holds an annual national meeting and area meetings to discuss sales techniques, merchandising, and advertising programs.
Territory Granted: Franchisees will receive an exclusive territory during the initial five-year term of the Franchise Agreement. The territory is the lesser of a one-mile radius around the franchisee’s location or a radius around the franchisee’s location that encompasses a population of 25,000 people. After the initial five-year term, franchisees do not have an exclusive territory, but Sport Clips will give the franchisee the first right of refusal to open a location with the territory as long as the franchisee is not in default of the Franchise Agreement.
Obligations and Restrictions: The franchisor does not require that franchisees personally supervise the franchised business, but it is recommended. The business must be directly supervised “on-premises” by a manager who has successfully completed the training program and approved by the franchisor to manage the location. Each individual who owns a 5% and greater interest in the franchisee entity, and his or her spouse, must sign an agreement assuming and agreeing to personally discharge all obligations of the “franchisee” under the Franchise Agreement. Franchisees may offer and sell only those goods and services that the franchisor has approved. Franchisees must offer products and services that the franchisor designates as required for all franchisees. The required products and services are haircuts, hair care services, hair care products, and specified hair care accessories.
Term of Agreement and Renewal: The length of the franchise term is five years. Every five years, if franchisees are in good standing and meet the franchisor’s terms and conditions, they can add an additional term of five years.
Financial Assistance: In some cases, the franchisor will guarantee the franchisee’s lease with a third party if the franchisee has acceptable credit and that is the only way to obtain an exceptional location. In some cases, the franchisor may guarantee the franchisee’s loan with a third party lender for a second or other additional stores if the franchisee has acceptable credit and the franchisee has identified a location that the franchisor believes is an exceptional location. This program is not available for the first Sport Clips location owned by the franchisee. Except as disclosed, the franchisor does not offer financing or guarantee a franchisee’s obligations to third parties.
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $30,000 | $69,500 |
| Travel and Living Expenses while Attending Initial Training | $1,000 | $2,000 |
| Real Estate | Varies | |
| Opening Inventory | $4,000 | $6,000 |
| Fixtures and Equipment (Including Computer Equipment) | $58,000 | $68,000 |
| Leasehold Improvements | $90,000 | $150,000 |
| Supplemental Services Fee | $3,000 | $5,000 |
| Professional Fees | $1,000 | $5,000 |
| Permits and Licenses | $1,000 | $3,500 |
| Lease Deposit | $0 | $10,000 |
| Signage | $4,000 | $8,000 |
| Miscellaneous Opening Costs | $3,000 | $5,000 |
| Insurance | $1,300 | $2,500 |
| Grand Opening Advertising | $30,000 | $30,000 |
| Additional Funds-6 Months | $40,000 | $75,000 |
| ESTIMATED TOTAL (does not include real estate costs, royalties, or marketing fund contributions) | $266,300 | $439,500 |
| Type of Fee | Amount |
|---|---|
| Royalty | 6% of net sales. |
| Advertising | $300 per week, or 5% of net sales, whichever is more. |
| Training Fee | Base training fee of $25 per week, plus a percentage training fee of $60 per week or 1 % of net sales, whichever is more. |
| Stylist Recruitment Fee | 1% of net sales. |
| Technology Fee | 1% of net sales. |
| Local Advertising Co-op Fee | Up to $300 per week. |
| Local Stylist Recruiting Co-op Fee | Up to $100 per week, or 1% of net sales, whichever is greater. |
| Sport Clips Eric Gozur - Wayne McGlone Memorial Relief Fund Contribution | $10 per week. |
| Computer Software Monthly Maintenance Fee | $165 per month currently. |
| Accounting Software Maintenance Fee | Not to exceed $75 per month. |
| IT Security Solution Firewall System | $60 per month |
| Supplemental Services Fee | $5,000 for the first store, $4,000 for the second store, and $3,000 for the third store and any additional stores. |
| Meeting Registration Fees | Currently between $720 and $845 per person for the annual meeting. Subject to change, but will not exceed $1,000 during the term of the Franchise Agreement. |
| Renewal Fee | $5,000 if franchisee owns fewer than 3 open franchised Sport Clips; $3,500 if franchisee owns 3 or more open franchised Sport Clips. |
| Audit | Cost of audit plus 10% interest on underpayment. |
| Transfer Fee | $5,000 for the first store transferred, and $1,000 for each additional store or license transferred if the transfers are in one transaction. |
| Fee for Failure to Maintain POS Computer System Communication | $100 per week for each week, or portion of a week, that the POS computer system is not maintained with the current approved or required internet connection. |
| Fee for Failure to Timely Submit Financial Statements and Reports | $100 per week for each week, or portion of a week, that franchisees fail to submit financial statements or reports required under the Franchise Agreement. |
| Indemnification | All losses and expenses incurred. |
| Interest | Maximum permitted by law, on late royalties and advertising fees. |
| Confidential Operating Manual Replacement Fee | $250 per volume, or $1,000 per set of volumes. |
| Extension Fee | $5,000 per Franchise Agreement to extend the time by 1 year to open the stores as stated in the development schedule attached to the Franchise Agreement. |
| Store Resale Assistance Fee | 5% of sales price, with a minimum fee of $5,000 and a maximum fee of $10,000. |
| Store Resale Broker Fee | Currently $22,500 |
| Product Review Fee | The franchisor's out-of-pocket cost. |
The above information has been compiled from the FDD of Sport Clips. Year of FDD: 2023.
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