Are you willing to invest in a salon franchise? If yes, then Supercuts must have entered your mind. So how much does a Supercuts franchise owner make?
In this article, you will find the answer to this many more questions related to the Supercuts franchise’s initial investment amount, revenue, payback period, and more.
Make sure to read till the end so that you do not miss on anything important.
About Supercuts
Supercuts is an American hair care and salon franchise that was founded by Geoffrey Rappaport and Frank Emmett in 1975 in Albany, California.
Supercuts was started to provide a great salon experience and services for an affordable price. The salon started flourishing when the founders came up with a hair-cutting technique that did not take more than 20 minutes, along with affordable pick-and-choose services.
Subsequently, in 1996, Supercuts was acquired by Regis, and since then, Supercuts has remained as number one haircare franchise in the U.S.
Today, there are over 2,600 Supercuts salons in the U.S., U.K., Canada, and Puerto Rico. And the company offers a franchise opportunity in the men’s haircut industry.
To own a Supercuts franchise, you do not need prior haircare industry experience, and the company offers training and support throughout.
To find out how much does it cost to start a Supercuts franchise, its profit-earning potential, and more, keep reading.
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How Much Does A Supercuts Franchise Owner Make?
The revenue or sales a Supercuts franchise owner makes may vary depending on various factors such as operating costs, location, staff, and advertisement expenses, among others.
However, on average, a Supercuts franchise owner makes a revenue of $263,000 annually. This data is based on the annual median sales of 1,938 Supercuts franchised salons operating between 2019-2020.
Supercuts Franchise Initial Investment Breakdown
| Franchise fee | $20,000 |
| Marketing fee | 5.0% |
| Royalty fee | 6.0% |
| Investment (mid-point) | $222,000 |
| Revenue per unit | $263,000 |
| Minimum net worth | $1,000,000 |
| Minimum liquid capital | $250,000 |
How Much Does Supercuts Employee Earn?
According to Indeed, The average hourly pay for Supercuts employees ranges from $7.25 per hour to $25.00 per hour.
If we look at the annual pay of Supercuts employees, then someone with the job title of Manager gets paid as much as $14,500 per year on average, and someone with the job title of Supply Chain Manager gets paid as much as $120,418 per year on average.
Since this is an average number, you should note that a Supercuts employee’s salary may vary depending on their job title, location, department, skills, etc.
Pros And Cons Of Supercuts Franchise
Pros of Supercuts Franchise
- Hands-on pre-opening training.
- Site selection and construction assistance.
- Ongoing support.
- Offers third-party financing.
- Profitable business.
- Comparatively lower initial investment cost.
Cons of Supercuts Franchise
- No absentee-ownership.
- No exclusive territory protection.
- External competition.
Supercuts Franchise Average Revenue & Profit
As per the performance of 1,938 franchised Supercuts salons operating in the year 2019-2020, Supercuts franchise owners make a revenue of $263,000 annually on average.
If we look at the revenue details closely, then it was found that the top third Supercuts franchised salons made as much as $409,000 annually while the lower third made $167,000 annually.
And if we take a 27% EBITDA margin, then on average, Supercuts franchise owners make $71,000 in profits annually.
Here’s the calculation for this conclusion:
| Profit and loss | Amount | % revenue |
|---|---|---|
| Revenue | $263,187 | 100% (as per FDD) |
| Marketing | $(13,159) | 5% |
| COGS | $(7,896) | 3% |
| Rent | $(31,582) | 12% (as per FDD) |
| Staff | $(105,275) | 40% |
| Royalties | $(15,791) | 6% (as per FDD) |
| Other Opex | $(18,423) | 7% |
| EBITDA | $71,060 | 27% |
Supercuts Franchise Failure Rate
| Outlet type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2018 2019 2020 | 1,714 2,318 2,449 | 2,318 2,449 2,376 | +604 +131 -73 |
| Company-Owned | 2018 2019 2020 | 891 374 199 | 374 199 34 | -517 -175 -165 |
| Total Outlets | 2018 2019 2020 | 2,605 2,692 2,648 | 2,692 2,648 2,410 | 87 -44 -92 |
As we can see from the table above, the failure rate of Supercuts franchise is 18%, which we think is pretty high, but it should be noted that a lot of company-owned outlets closed.
Although Supercuts offer high revenue and lower investment, its high failure rate is something that you should consider.
Supercuts Franchise Payback Period
To find out the Supercuts franchise payback period, let us do some calculations:
| AVERAGE INVESTMENT | $222,000 |
| AVERAGE REVENUE PER OWNER | $263,000 |
| AVERGAGE PROFIT PERCENTAGE | 27% |
| AVERGAGE PROFIT PER YEAR | $71,000 |
| AVERAGE PAYBACK PERIOD | 3 Years |
PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR
= 222000/71000 = 3.1 = 3 Years based on median
The average investment for a Supercuts Franchise is $222,000 and the average revenue per owner is $263,000.
With an average profit percentage of 27%, the average profit per year is $71,000.
This means that the average payback period for a Supercuts franchise is 3 years, as the total average investment of $222,000 would be recovered within this period.
What is Supercuts Best known for?
Supercuts offer no-appointment service and is known for its “consistent, quality haircuts” that last for only 20 minutes. Their stylists take pride in their skills and the attention-to-detail factor that customers look for.
Supercuts offer a range of hair care services, including haircuts for men, women, and children, waxing and color services, etc. And after each haircut, they also give Hot Towel Refresher service so that their customers are ready on the go.
Another factor that sets them apart from their fellow competitors is their affordable pricing which can fit almost anyone’s preference and budget.
Is Supercuts Franchise Profitable?
Supercuts franchise is definitely a profitable investment, and you can make $70,000 per year on average with this franchise.
The best part about this franchise is that it is a low-cost investment franchise, and by putting in anywhere between $156,000 and $289,000, you can easily make average yearly revenue of $263,000 or even more.
Another great thing is since the ratio between investment and revenue is less, you can recover the initial investment you put in as less as 3 years and then get to enjoy profit entirely.
Supercuts Franchise Earning Potential
The earning potential of any franchise may be different and might vary from outlet to outlet based on their marketing skills, service, location, etc.
Although Supercuts franchises make $263,000 in revenue per year on average, the top third of all Supercuts franchises have made as much as $409,000 in revenue.
This shows that Supercuts has high earning potential in spite of heavy competition, and so as a Supercuts franchise owner, you can also make this kind of amount.
Wrap Up
Supercuts is America’s number one hair salon, and with a very low investment of $156,000 and $289,000 and zero salon industry experience, you can get started with them.
In spite of heavy competition, Supercuts makes a good amount of profit, and it even has a low pay-back period of three-four years.
Having said that, the 18% failure rate of Supercuts is concerning, so make sure you review all points carefully before deciding if you would like to open a Supercuts franchise.
We hope this article on how much does a Supercuts franchise owner make was useful to you.
FAQ
What is the eligibility for owning a Supercuts franchise?
In order to be eligible for owning a Supercuts franchise, you must have the following:
- Minimum net worth of $1,000,000.
- Minimum liquid capital of $250,000.
- Successful multi-unit business owner.
How much royalty and marketing fees do Supercuts charge?
Supercuts charge a royalty fee of 6% and a marketing fee of 5%.
What is the initial investment for Supercuts franchise?
The initial investment for the Supercuts franchise is between $156,000 and $289,000, which is less than the industry average of $400,000.