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Sport Clips Franchise ProfileHealth & Beauty Franchises > Hair Salons |
What is the Initial Investment for a Sport Clips Franchise?
To open a Sport Clips franchise, you should expect an initial investment ranging from $276,800 to $463,000. This includes a franchise fee of $30,000, which grants you access to the brand and its support. Additionally, you’ll need to have cash available between $100,500 and $165,000 to cover startup costs. Be prepared for ongoing costs as well, including a royalty fee of 6% of your revenue and a marketing fee of 5%.
What Are the Financial Performance Metrics for Sport Clips?
Sport Clips franchises show promising financial performance. The average annual revenue per unit is approximately $423,055, with a median of $406,876. Revenue can vary significantly, with the lowest annual revenue reported at $313,662 and the highest reaching $1,000,000. The breakeven time is typically around 12 months, and investment payback is expected within 18 months, making it an attractive opportunity for aspiring franchisees.
What Operational Costs Should You Expect as a Sport Clips Franchisee?
Operating a Sport Clips franchise involves several key expenses. Payroll is the largest cost, averaging $247,016 annually. Other significant expenses include occupancy costs at $74,987 and advertising expenses at $25,392. Overall, the total operating expenses are approximately $360,629, which is about 58% of the average annual revenue. Understanding these costs is crucial for effective financial management and profitability.
How Many Sport Clips Units Are Currently Operating?
As of 2023, Sport Clips has a total of 1,860 units, with 1,785 of those being franchised locations. The franchise has shown consistent growth, increasing from 1,768 franchised units in 2021 to 1,785 in 2023. Corporate-owned units have also grown slightly, indicating a stable expansion strategy. This growth trend reflects the brand's popularity and market presence in the competitive hair care industry.
Sport Clips 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:
Sport Clips 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 | 1,840 | 1,852 | 1,860 |
| Net Change YoY | 12 | 8 | |
| Franchised Units | 1,768 | 1,778 | 1,785 |
| Net Change YoY | 10 | 7 | |
| Corporate Units | 72 | 74 | 75 |
| Net Change YoY | 2 | 1 |
Initial Investment
The Sport Clips franchise requires a low initial investment ranging from $276,800 to $463,000. This investment includes the franchise fee of $30,000, which is essential for securing your franchise rights. It's important for potential franchisees to evaluate their financial readiness, as the cash required to start can range from $100,500 to $165,000, depending on various factors such as location and build-out costs.
Financial Performance
The average annual revenue per Sport Clips unit is approximately $423,055, with a median revenue of $406,876. The revenue can vary considerably, with the lowest reported at $313,662 and the highest reaching $1,000,000. These figures highlight the potential profitability of the franchise, making it an attractive option for aspiring entrepreneurs.
Ongoing Fees
Sport Clips franchisees are subject to ongoing fees, including a royalty fee of 6% of gross sales and a marketing fee of 5%. These fees contribute to the overall support provided by the franchisor, including national advertising and brand development, which can help drive customer traffic to individual locations.
Breakeven and Payback
Franchisees can expect to reach breakeven within approximately 12 months of operation. Additionally, the investment payback period is around 18 months, which indicates a relatively quick return on investment compared to other franchise opportunities. This timeline is crucial for new franchisees as they plan their financial strategies.
Franchise Growth
As of 2023, Sport Clips has shown consistent growth, with a total of 1,785 franchised units, up from 1,768 in 2021. This steady increase in franchised locations reflects the brand's popularity and market demand, providing potential franchisees with confidence in the brand's stability and growth trajectory.
Corporate Support
Sport Clips offers extensive support to its franchisees, including training programs, operational guidance, and marketing assistance. With a corporate structure that includes 75 company-owned units as of 2023, the franchise provides a robust support network that helps franchisees navigate the challenges of running a successful hair care business.
Frequently Asked Questions
The initial investment for a Sport Clips franchise ranges from $276,800 to $463,000. This includes the franchise fee, equipment, leasehold improvements, and other startup costs.