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Great ClipsHair salons
- 2023 Franchise 500 Rank
#24 Ranked #23 last year
- Initial investment
$178K - $377K
- Units as of 2022
4,447 1.7% over 3 years
Great Clips Franchise
Certain businesses have the benefit of a repeat customer base. That includes the haircutting industry.
When you run a haircutting salon, you can count on the fact that people will need a trim from time to time in perpetuity, so you’ll never run out of customers provided you maximize your brand awareness and reputation.
It’s easier to do that by jumping into a Great Clips franchise as a new franchisee. Great Clips is the most popular and well-known hair salon franchise in North America, including the U.S. and Canada. It offers ample opportunities for aspiring business owners who have what it takes to lead talented teams to success.
Want to know more? Read on to discover everything you need to know about successfully starting and running a Great Clips franchise (and no, you don’t need to know how to cut hair to run one!)
Why should you start a Great Clips franchise?
Constant business is one big reason to start a Great Clips franchise as a business owner.
Simply put, so long as you run an attractive hair salon, you'll always have people coming in for haircuts. That means you'll be running a stable and recession-resistant organization. Few other industries can claim such resilience, especially in recent economic times.
However, starting a Great Clips franchise might be advantageous for a variety of other reasons:
- Great Clips as a brand brings lots of brand recognition to the table. Starting a hair salon is always tricky, but if you partner with Great Clips, you’ll immediately benefit from brand recognition and the variety of support resources corporate can provide to your location, ranging from training to tech support.
- Great Clips allows you to keep your day job while your salon is being built. Since you don’t have to cut hair while working as a Great Clips franchise owner, you don’t need extensive training to succeed.
- Compared to other franchise investments, Great Clips requires a relatively low investment, especially considering the long-term success you could enjoy once your business is up and running.
Ultimately, Great Clips is a 30-year brand that has only grown over its lifespan. Whether you have a lot of business and managerial experience or are just starting, it may be smarter to take advantage of the Great Clips brand than to create a hair salon brand from scratch.
As mentioned above, you don’t have to cut hair at Great Clips as a franchisee.
In fact, according to Great Clips itself, approximately 95% of all franchisees don’t know how to cut hair when they join the system. Even after managing stores, many franchisees still don’t know how to cut hair.
That’s because, as a Great Clips franchisee, your job is primarily to lead and grow your team, not to trim hair. However, you can choose to undergo stylist training if you so desire. It all depends on how much of a direct role you want to play in your salon.
If you choose not to learn to style hair, you will still be “in the office” a lot. However, you’ll mostly be in the back of your salon instead of interacting with customers.
Related: #8 on the Franchise 500: Great Clips Reinvents the Haircut Experience
What resources and support does Great Clips offer franchisees?
Great Clips provides its franchisees with many marketing and other ongoing support resources. These include access to a corporate newsletter and regular meeting and convention attendance options.
On top of that, franchisees will be trained in security and safety procedures, will receive assistance with lease negotiation and will have Great Clips' support for the grand opening of their location.
If you’re unsure where to set up your salon, Great Clips will assist with site selection so that your salon can succeed immediately. Great Clips will ensure that your location is good for business and help negotiate the lease if necessary.
Regarding marketing support, Great Clips offers co-op advertising deals, advertisement templates and search engine optimization/SEO help.
Social media, national media and regional advertising campaigns and materials will be provided to your store so you can focus more on managing and leading your team effectively instead of coming up with marketing materials.
Furthermore, all Great Clips franchisees can use the Great Clips loyalty program and app. This is a great way to build up your customer base and reputation, plus keep people coming back to your salon for repeat haircuts so they can earn points and rewards.
Given all of these advantages, Great Clips franchisees feel supported and enabled in their partnerships.
How much territory is granted to Great Clips franchises?
Should you decide to open a Great Clips franchise, you can open and operate only the salon provided in your franchise agreement.
However, Great Clips is a unique franchisor in that it grants each franchisee a specific area (three-quarters of a mile from the salon's primary customer entrance) of exclusive territory.
That means you’ll gain access to that territory without worrying about another Great Clips salon or franchisee cutting in on your business.
Related: How Do You Innovate a Barbershop? Ask Great Clips Franchisees.
How much does starting a Great Clips franchise cost?
Before you start your own Great Clips franchise, you’ll need to know the financial requirements and total investment for this business model and full-time operation. That way, you’ll be approved for a franchised location immediately.
You’ll need an initial franchise fee of $20,000, due when you sign the paperwork to begin your official partnership. On top of that, you’ll need to secure an initial investment ranging from $178,400 to nearly $400,000 in total.
The initial investment fee can vary depending on how much equipment is needed and the location of the real estate.
To ensure that all franchisees have the money necessary to thrive in this business, Great Clips requires aspiring franchisees to have a net worth minimum between $300,000 and $1 million. Again, this depends on the estimated costs of the location you wish to open. You'll need to scrape together $75,000-$250,000, too.
Once you have the requisite money gathered and paid, remember that Great Clips charges regular 6% royalty fees for all your profits.
You’ll also have to pay a 5% ad royalty fee, as Great Clips will take care of most of your marketing for your location. These franchise costs will be in the Franchise Disclosure Document (FDD).
Does Great Clips offer franchising discounts?
On the plus side, Great Clips does offer particular discounts and financing assistance.
For example, veterans can use a $5,000 rebate for their first franchised stores. Thus, opening a Great Clips franchised location might be a great idea if you are a veteran looking to become a business owner.
Even if you already have a franchised location or aren’t a veteran, you can use the third-party relationships that Great Clips has cultivated over the years. These financing relationships can help you cover startup, inventory and equipment costs as needed.
Related: Why This Franchisor Doesn’t Look for the ‘Perfect’ Franchisee
What training is required to start a Great Clips franchise?
Every Great Clips franchisee has to complete a dedicated training program. That involves 56 hours of classroom training and 13 hours of on-the-job training. The on-the-job training occurs at the Great Clips, Inc. training center in Minneapolis, Minnesota.
Note that this does not include hair care training, which is more akin to a college course than a management class. Great Clips franchisees can usually complete all the training requirements within a few weeks.
Training is comprised of four primary components:
- The QuickConnect training program.
- The Great Clips Academy training program.
- LEADS for management staff.
- In-Salon training that teaches you what you need to know when running your day-to-day salon operations.
In addition to these training requirements, Great Clips will ensure you can train your staff members to operate your store location capably.
Great Clips provides resources to ensure you only hire trained and knowledgeable stylists and salon experts. That's vital for ensuring that your salon builds a reputation of quality, which can keep your customers returning.
Related: Great Clips Brand Spotlight Partner
Start a Great Clips franchise today
The right Great Clips franchise opportunity could help you reach your business goals and thrive.
Use the above information to decide whether Great Clips franchising is right for you.Explore Entrepreneur’s other guides and resources for more information about Great Clips and other franchise opportunities.
About Great Clips
- Personal-Care Businesses
- Related Categories
- Hair Care, Salon & Spa Services
- Parent Company
- Great Clips Inc.
- Steve Hockett, CEO
- Corporate Address
4400 W. 78th St., #700
Minneapolis, MN 55435
More from Great Clips
Haircare is a $70Billion dollar industry, and still growing. Great Clips is in the convenient, no appointment haircutting segment of the industry, and is the largest and fastest growing haircutting brand in the world. It is a simple, recession resistant business model- we do not offer color, waxing, tanning, or nail services because we want to keep the business simple and focus on the service that we do best- cutting hair. And, no matter what the economy looks like, people still need their hair cut, usually every 4-6 weeks.
Great Clips was founded in 1982, and has been franchising since 1983. With over 4200 locations in the US & Canada, we are still accepting new franchisees in over 75 markets in North America. Our salons are manager-run, so it is possible for franchisees who have a flexible full time job to keep that position and do the business on the side, knowing it’s kind of like a second full time job to start a new business! Great Clips franchisees are always involved and engaged in the success of their business- so whether it’s a husband/wife partnership or that flexible full time position, Great Clips franchisees are aware that they are the driver of their positive results. Haircare experience is not necessary to become a franchisee- rather, solid business backgrounds and people management skills are the traits we see in our successful franchisees.
Great Clips has a support network that is outstanding- from assistance during the site selection process, build out, hiring, grand opening marketing strategies, ongoing growth plans- all the way to helping franchisees who are ready to sell their salons- Great Clips is dedicated to the success of our franchisees. With 100% of our salons franchisee-owned, Great Clips’ success depends on the success of our franchisees. On average, after 5 years in business, our franchisees own between 5-6 salons. Plus, all franchisee's stylists and managers are trained in the Great Clips system by Great Clips corporate staff at our local training centers.
“Great Clips improves my ability to grow profitably. I also benefit from working with other franchisees and the hard working and knowledgeable Great Clips Corporate employees. The biggest benefit is the culture of Great Clips. Their actions consistently show that they really do care about you.” Keith C, owns 5 locations.
“Initially I anticipated opening just one or two stores, but the business grew to be so successful that it made sense for me to leave my existing job as vice president!” Jim H, owns 9 locations
From a Staggering Decline to a Remarkable Recovery: One Franchisor's Surviving-to-Thriving Story
- Franchising Since
- 1983 (40 years)
- # of employees at HQ
- Where seeking
This company is offering new franchisees throughout the US.
This company is offering new franchisees in the following international regions: Canada
- # of Units
- 4,447 (as of 2022)
Information for Franchisees
Here’s what you need to know if you’re interested in opening a Great Clips franchise.
Financial Requirements & Ongoing Fees
Here’s what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.
- Initial Franchise Fee
Definition: The initial fee paid to a franchisor to join their system
What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.
- Initial Investment
- $178,400 - $376,900
Definition: The total amount necessary to begin operation of the franchise
What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.
- Net Worth Requirement
- $300,000 - $1,000,000
Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company
What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.
- Cash Requirement
- $75,000 - $250,000
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
- Veteran Incentives
- $5,000 rebate on first-store franchise fee
Definition: A discount or other incentive offered to military veterans who buy a franchise with this company.
- Royalty Fee
Definition: A ongoing fee paid to the franchisor on a regular basis.
What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.
- Ad Royalty Fee
Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts.
What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.
- Term of Agreement
- 10 years
Definition: The length of time your franchise agreement will last.
What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.
- Is franchise term renewable?
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
- Third Party Financing
- Great Clips has relationships with third-party sources which offer financing to cover the following: startup costs, equipment, inventory
Training & Support Offered
Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.
- On-The-Job Training
- 13 hours
- Classroom Training
- 56 hours
- Ongoing Support
NewsletterMeetings & ConventionsToll-Free LineGrand OpeningSecurity & Safety ProceduresLease NegotiationField OperationsSite SelectionProprietary SoftwareFranchisee Intranet Platform
- Marketing Support
Co-op AdvertisingAd TemplatesNational MediaRegional AdvertisingSocial MediaSEOEmail MarketingLoyalty Program/App
Additional details about running this franchise.
- Is absentee ownership allowed?
Definition: Absentee ownership means that the franchisee does not actively work in the franchise business or manage day-to-day operations.
- Can this franchise be run from home/mobile unit?
Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.
- Can this franchise be run part time?
Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.
- # of employees required to run
- Are exclusive territories available?
Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened.
What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.
Franchise 500 Ranking History
Compare where Great Clips landed on this year’s Franchise 500 Ranking versus previous years.
Curious to know where Great Clips ranked on other franchise lists? Find out below.
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