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Fantastic Sams Franchise ProfileHealth & Beauty Franchises > Hair Salons |
What Are the Initial Investment Requirements for a Fantastic Sams Franchise?
To open a Fantastic Sams franchise, you will need to consider a total initial investment ranging from $169,000 to $301,000. This includes a franchise fee of $30,000. Additionally, you should have liquid cash available between $30,000 and $50,000 and meet a net worth requirement of $250,000 to $300,000. These financial benchmarks are essential for ensuring you can support the startup and operational phases of your business.
What Are the Ongoing Fees Associated with a Fantastic Sams Franchise?
Fantastic Sams franchisees are required to pay a royalty fee of 6% on gross sales, along with an additional marketing fee of 6%. These ongoing fees contribute to the brand's collective marketing efforts and support services that help maintain brand quality and customer engagement. Understanding these costs is crucial for planning your financial strategy and ensuring the long-term profitability of your franchise.
What Is the Average Revenue Potential for a Fantastic Sams Franchise?
The average annual revenue per unit for a Fantastic Sams franchise is approximately $290,089, with a median annual revenue reaching $502,056. The revenue can vary significantly, with the lowest annual revenue recorded at $66,780 and the highest at $1,083,950. This potential for revenue highlights the importance of location, management, and marketing in achieving financial success in the franchise system.
How Quickly Can You Expect to Break Even with a Fantastic Sams Franchise?
Franchisees can anticipate a breakeven time of around 12 months, with an investment payback period of approximately 10 months. This relatively quick return on investment can be attractive for aspiring entrepreneurs looking to enter the franchise market. However, achieving this timeline requires effective operational management and a strong customer base from the outset.
Fantastic Sams Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Fantastic Sams Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 702 | 614 | 565 |
| Net Change YoY | -88 | -49 | |
| Franchised Units | 701 | 614 | 565 |
| Net Change YoY | -87 | -49 | |
| Corporate Units | 1 | 0 | 0 |
| Net Change YoY | -1 | 0 |
Investment Overview
Fantastic Sams offers a compelling investment opportunity for aspiring franchisees with a low initial investment range of $169,000 to $301,000. The initial franchise fee is set at $30,000, while ongoing royalty and marketing fees each stand at 6%. To qualify, franchisees need a cash reserve of $30,000 to $50,000 and a net worth between $250,000 and $300,000.
Revenue Potential
The average annual revenue per unit for Fantastic Sams is approximately $290,089, with a median revenue of $502,056. Revenue can vary widely, with the lowest reported annual revenue at $66,780 and the highest at $1,083,950. This indicates a significant potential for profitability, depending on location and management.
Breakeven and Payback Period
Franchisees can expect to reach breakeven within 12 months of operation, which is a favorable timeline for new business owners. Additionally, the investment payback period is estimated at just 10 months, allowing franchisees to recoup their initial investment relatively quickly if operations are managed effectively.
Franchise Growth
Fantastic Sams has seen a decline in total units from 702 in 2021 to 565 in 2023, with franchised units dropping from 701 to 565 during the same period. This trend highlights the importance of strategic market entry and operational optimization for potential franchisees looking to invest in the brand.
Operating Expenses
The average operating expenses for Fantastic Sams are significant, totaling approximately $10,471,345 annually. This includes sales and marketing costs of $450,105, general and administrative expenses of $7,328,435, and depreciation and amortization at $2,692,805. Understanding these costs is essential for managing profitability.
Financial Performance
Fantastic Sams maintains a gross profit margin of 100%, with EBITDA reported at $1,316,983, which is about 11.16% of revenue. This strong financial performance indicates the potential for healthy returns, but franchisees must remain vigilant in managing their operating expenses to maximize profitability.
Frequently Asked Questions
The initial investment for a Fantastic Sams franchise ranges from $169,000 to $301,000, which includes the franchise fee of $30,000 and other startup costs.