Hair salons are essential to most people’s lives, and there is always a demand for these businesses. That’s why they are always a good opportunity for both beginner and experienced entrepreneurs. One of the biggest hair salon franchises in the United States is Sports Clips.
Have you ever considered owning a Sports Clips franchise, or are you wondering if it’s worth the time and effort? This boils down to your needs and what you want out of your business. We will give you the details of Sports Clips’s franchise system and what you can expect in costs, training, support, and other details.
About Sports Clips and Sports Clips History
Sports Clips is one of the most famous leading hair salon franchises in the United States, with over 1,800 locations nationwide.
Sports Clips focuses on a very simple business model, which allows them to grow aggressively through franchising. They were founded in 1993 and have been franchising since 1995 for faster growth.
Now, Sports Clips is the only hair salon franchise that has operations in all 50 states in the United States. Because of their long franchising history, they have established systems that help new franchisees to establish and grow quickly. This makes them a great opportunity for any kind of entrepreneur.
Franchise Model Table
| Cost Or Fee | Amount |
|---|---|
| Initial Investment | $266,300-$439,500 |
| Franchise | YES |
| Franchising Since | 1995 |
| Franchise-Fee | $30,000-$69,500 |
| Royalty-Fee | 6% |
| Liquidity | $200,000 |
| Estimated Outlets | 1,800+ |
How Much Does It Cost To Open A Sports Clips Franchise?
Opening a Sports Clips franchise could cost anywhere between $266,300 to $439,500. This is the average expected initial investment on average for one Sports Clips store. Franchise fees, equipment, renovations, real estate, and other similar startup costs are all included in this expected average cost.
Franchise Requirements
To become a Sports Clips franchisee, you need to have a minimum net worth of $400,000 and about $200,000 liquidity available. Additionally, you are also required to buy at least three store licenses and have the necessary finances to build three stores.
There is no experience requirement in your professional background. Having managerial experience in sales, communication, and management is preferable, but it is not a must.
Profit & Revenue
There is no official information about the company’s general profit and revenue. We can make some estimations by looking at the profit and revenue numbers per franchise store. Our estimations tell us that Sports Clips’ revenue is around $714.6 million and net profit is about $155 million.
These numbers are not confirmed, and they are only our estimations. Real numbers might be different.
Overall Sales
A Sport Clips franchised store makes $397,054 in overall sales on average annually. This is the revenue that the store gets before deducting any of the costs. The number comes from all the open Sports Clips franchise stores during the fiscal year 2021.
How Much Does A Sport Clips Franchise Owner Earn?
An average Sports Clips franchise store makes $87,351 in net profits annually once you remove all the costs and expenses.
If there is one sole owner of the store and no other shareholders, this becomes the franchise owner’s salary. This number shows a 22% profit margin and this is how we calculated this amount:
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 397054.00 |
| Rent | 9.75% | (38712.76) |
| Insurance | 4.88% | (19356.38) |
| Salaries | 19.50% | (77425.53) |
| Franchise Royalty Fees | 4.88% | (19356.38) |
| Utilities | 1.95% | (7742.55) |
| Cost of Goods Sold (COGS) | 24.38% | (96781.91) |
| Labor (Variable) | 12.68% | (50326.59) |
| Total (Expenses) | 78.00% | (309702.12) |
| Net Profit | 22.00% | 87351.88 |
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Payback Period Of Sport Clips
With a midpoint investment of $439,500 and considering that the average net profit per store is $87,351, we can calculate the payback period of Sports Clips.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Midpoint Investment / Yearly Profit = $439,500 / $87,351 = 5.08 years
Based on these figures, it will take approximately 3 to 5 years to pay back the initial investment for Sports Clips. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Failure Rate Of Sports Clips
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 1,703 | 1,750 | +47 |
| 2020 | 1,750 | 1,768 | +18 |
| 2021 | 1,768 | 1,778 | +10 |
For the Franchised outlets:
- In 2019, the growth rate was (47)/1,703×100≈2.75%
- In 2020, the growth rate was (18)/1,750×100≈1.02%
- In 2021, the growth rate was (10)/1,768×100≈0.56%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 69 | 70 | +1 |
| 2020 | 70 | 70 | 0 |
| 2021 | 70 | 72 | +2 |
For the Company-Owned outlets:
- In 2019, the growth rate was (1)/69×100≈1.44%
- In 2020, the failure rate was (0)/70×100≈0.00%
- In 2021, the growth rate was (2)/70×100≈2.85%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 1,772 | 1,820 | +48 |
| 2020 | 1,820 | 1,838 | +18 |
| 2021 | 1,838 | 1,850 | +12 |
For Total outlets:
- In 2019, the growth rate was (48)/1,772×100≈2.70%
- In 2020, the growth rate was (18)/1,820×100≈0.98%
- In 2021, the growth rate was (12)/1,838×100≈0.65%
According to the above-mentioned data, we can see that the franchised outlets for Sports Clips grew from 2019 to 2021, showing a growth rate between 2.75% and 0.56%.
On the other hand, for company-owned outlets, the growth rate of Sports Clips was lying in the range of 1.44% and 2.85% for 2019 and 2021.
Overall, when we combine the data of franchise and company-owned outlets, we can see that the Sports Clips franchise has expanded in the years 2019-2021, showing a total growth rate between 2.70% and 0.65%.
Training and Support
There is a mandatory initial training program for all new franchisees, no matter your experience. This training is on-site and happens in the headquarters in Texas. It lasts between one to two weeks and includes classroom and field training combined.
Once you open the store, there will be on-site assistance to all franchisees by the franchisor itself or by the area developer. There are also ongoing training and support models for the store manager as part of their post-opening support program.
Terms of Agreement and Renewal
The length of the initial franchise agreement is five years. At the end of each five years, if both sides are in good standing and the franchisor approves it, there could be a renewal. There is no limit to how many times you can renew, but every renewal is for five years.
Obligations and Restrictions
There is no obligation for the franchisees to be present in the store to oversee the daily operations. However, there has to be an appointed store manager who is approved by the franchisor to oversee the daily operations on-premises.
Franchisees are restricted to selling goods and services that the franchisor approves beforehand. Franchisees also have to offer any goods or services that Sports Clips asks them to.
Financial Assistance
Sports Clips doesn’t offer direct financial assistance to any franchisee. However, the company has active relationships with third-party financial lenders who can help you get the necessary assistance. Sports Clips doesn’t have any say in the process of this assistance. They only introduce you to their network.
Sports Clips Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Supercuts | $10,000-$39,500 | 4% | $150,906-$312,878 |
| Great Clips | $20,000 | 6% | $183,400-$394,400 |
| Sports Clips | $30,000-$69,500 | 6% | $266,300-$439,500 |
Conclusion
Sports Clips is the only hair salon franchise that has stores in all states in the United States. This means a huge brand awareness, which makes it easier for new franchisees to succeed in the market.
An average Sports Clips franchise store makes $397,054 in annual sales and $86,459 in net annual profit.
The risks are low, and the annual profits are high enough to be lucrative in the long run. You need to have the finances to open at least three stores because that’s what they require from franchisees.
If you have the necessary funds, having at least three stores could give you $300,000 in annual net profit, which is a huge amount compared to other franchise businesses.
FAQs
Is Sports Clips a franchise?
Yes, Sports Clips has been an active franchise since 1995 and has certain systems in place for new franchisees.
Can I open a single Sports Clips franchise store?
No, Sports Clips wants the new franchisees to buy at least three licenses and open a minimum of three stores. If you want to open less than three stores, you won’t be given any license.
What is the average cost to open a Sports Clips franchise?
On average, a single Sports Clips store costs between $266,300 and $439,500. This includes all the related startup costs like the franchise fee, equipment, real estate, and others.
Where is the headquarters of Sports Clips?
Sports Clips is headquartered in Georgetown, TX.
Who founded Sports Clips?
Gordan B. Logan is the founder and CEO of Sports Clips. In the early 1990s, Gordon Logan recognized the huge potential and relative lack of competition in the men’s and boys’ haircut market.
How Many Locations Does Sports Clips Has?
Sports Clips has locations in all 50 states in the U.S., with more than 1,850 open in the U.S. and Canada.