In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Cost Cutters franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Cost Cutters franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Cost Cutters outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Cost Cutters franchise opportunity

Section V – Presentation and analysis of Cost Cutters’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• fiscal year 2024 average, median, maximum, and minimum sales for the top third, middle third, bottom third, and all 451 franchised Cost Cutters stores that were open during that fiscal year and located throughout the United States with sales in all 12 months of the fiscal year

Section VI – Key ratios, comparables, computations, and analyses for the Cost Cutters franchise opportunity (exclusive content for Platinum subscribers)

Section I – Cost Cutters Franchise Costs

• Initial Franchise Fee:  $39,500
• Leasehold Improvements:  $60,000 to $120,000
• Furniture, Equipment, and Supplies:  $25,000 to $50,000
• Construction Management Services Fee:  $5,500 to $7,500
• Construction and Design Plan Review:  $500 to $1,000
• Post Build Review:  $1,500 to $3,000
• Computer Software (Point-of-Sale System):  $2,040 ($170 per month)
• Computer Hardware/Installation and Onsite Training:  $400 to $2,000
• Opening Inventory:  $5,000 to $10,000
• Travel and Living Expenses During Orientation Training:  $2,050 to $4,500
• Rent and Security Deposit:  $2,500 to $9,600
• Grand Opening Advertising:  $5,000
• Signs:  $6,000 to $12,000
• Professional Fees:  $6,000 to $12,000
• Additional Funds (3 to 6 months):  $15,000 to $45,000
• Total Estimated Cost Cutters Franchise Costs:  $175,990 to $323,140

Section II – Cost Cutters’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise/Development Fees:  $39,500 to $99,500, plus $10,000 for each additional Store over 6 Stores

• Continuing Fees:  weeks 1 through 52: 4% of Gross Revenues; week 53 through end of Franchise Agreement term: 6% of Gross Revenues or $100 per week, whichever is greater

• Advertising Fees:  4% of Gross Revenues (currently 1% is collected and 3% is uncollected)

• Local Advertising Expenditure:  the difference by which 1% of Gross Revenues for the preceding quarter exceeds your actual expenditure toward local advertising for the preceding quarter. Currently this is not collected.

Section III – Number of Franchised and Company-Owned Cost Cutters Outlets

Franchised

2021

• Outlets at the Start of the Year:  638
• Outlets at the End of the Year:  604
• Net Change:  -34

2022

• Outlets at the Start of the Year:  604
• Outlets at the End of the Year:  521
• Net Change:  -83

2023

• Outlets at the Start of the Year:  521
• Outlets at the End of the Year:  463
• Net Change:  -58

Company-Owned

2021

• Outlets at the Start of the Year:  6
• Outlets at the End of the Year:  1
• Net Change:  -5

2022

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  0
• Net Change:  -1

2023

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section IV – News Updates on the Cost Cutters Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Cost Cutters Franchise (Item 19, 2024 FDD)

Average, Median, and Max/Min Store Gross Revenues Information for the Fiscal-Year Period from July 1, 2023 Through June 30, 2024

• The average, median, maximum, and minimum Salon Gross Revenues information for the fiscal-year period from July 1, 2023 through June 30, 2024 shown below includes franchised Cost Cutters Salons that were open during that period (“Fiscal Year 2024”) and located throughout the United States with sales in all 12 months as shown in Item 20 of the Disclosure Document.

• There were 463 franchised outlets in the system during the period from July 1, 2023 through June 30, 2024. The data includes only those salons that reported sales in each month of the 12-month period July 1, 2023 through June 30, 2024.

Top Third

• Total Salon Count:  150
• Average Sales:  $404,817
• Median Sales:  $369,867
• Maximum Sales:  $1,188,831
• Minimum Sales:  $293,890
• Number of Salons Exceeding Average:  56
• Percentage of Salons Exceeding Average:  37.33%

Middle Third

• Total Salon Count:  150
• Average Sales:  $244,850
• Median Sales:  $247,024
• Maximum Sales:  $292,708
• Minimum Sales:  $198,226
• Number of Salons Exceeding Average:  77
• Percentage of Salons Exceeding Average:  51.33%

Bottom Third

• Total Salon Count:  151
• Average Sales:  $142,058
• Median Sales:  $147,241
• Maximum Sales:  $197,185
• Minimum Sales:  $11,342
• Number of Salons Exceeding Average:  82
• Percentage of Salons Exceeding Average:  54.30%

Totals

• Total Salon Count:  451
• Average Sales:  $263,638
• Median Sales:  $246,912
• Maximum Sales:  $1,188,831
• Minimum Sales:  $11,342
• Number of Salons Exceeding Average:  192
• Percentage of Salons Exceeding Average:  42.57%

• The products and services offered by each franchised Salon covered in this financial performance representation are essentially the same, and the franchised Salons whose gross sales numbers appear in this financial performance representation are substantially similar to the franchises that Cost Cutters currently offers in all states.

• These Salons receive substantially the same services from Cost Cutters. However, Cost Cutters does not provide services to franchisees that a Salon’s owner normally provides, such as financing, accounting, legal, personnel, construction, and management services.

• This financial performance representation does not reflect the cost of sales, operating expenses, or other costs or expenses that must be deducted from gross revenue or gross sales figures to obtain your net income or profit.

• “Gross Sales” includes all sales whether made for cash or on credit or by the redemption of gift certificates or gift cards including, but not limited to, those sales charged or made for orders placed or deliveries from the franchised Salon, including orders placed or filled, or services provided at a location other than the franchised Salon, including mail order.

• “Gross Sales” does not include any sales, use, or gross receipts tax imposed by any federal, state, municipal, or governmental authority directly upon sales, if: (i) the amount of the tax is added to the selling price and is expressly charged to the customer; (ii) a specific record is made at the time of each sale of the amount of such tax; and (iii) the amount thereof is paid over to the appropriate taxing authority by you.

• Some Cost Cutters Salons have sold this amount. Your individual results may differ. There is no assurance that you will sell as much.

Section VI – Cost Cutters Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️