Verified — real FDD extraction
SBA-eligible · directory code S0743 since 2017
GREAT CLIPS
Beauty & Personal Care · independent · est. —
Great Clips is one of the largest hair salon chains in North America, offering walk-in, no-appointment haircuts for the whole family at affordable prices. A franchisee owns one or more salons, employing licensed stylists and managing scheduling, staffing, and daily operations.
GREAT CLIPS net unit count grew +0.3% from 2022–2024 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The standout in the record: owner turnover is low.
Exit rate · latest year
2.3%
vs 5.4% across 23 beauty & personal care systems
Cost to open
$188K–$420K
Item 7 total investment range
SBA loan defaults
5.0%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2022–2024
Survival record
FDD Item 20 · outlet status by year
In fiscal 2024, 103 of 4,427 franchised outlets left the system — a 2.3% annualized exit rate, vs 5.4% across 23 beauty & personal care systems. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Outlets at start | 4,447 | 4,427 | 4,427 |
| Opened | 116 | 98 | 115 |
| Transfers | 325 | 164 | 207 |
| Terminations | 4 | 3 | 4 |
| Non-renewals | 4 | 6 | 1 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 128 | 89 | 98 |
| Outlets at end | 4,427 | 4,427 | 4,439 |
| Net change | -20 | 0 | +12 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 609 SBA-backed loans to GREAT CLIPS franchisees since 1992. Of the 515 that have resolved, 5.0% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
5.0%
26 of 515 resolved defaulted
67.0%
avg. charged-off $ ÷ approved $
3.4%
default rate × loss severity
$889,583
what recent franchisees borrowed
41 mo
approval → charge-off, defaulted loans
24 vs 31
distinct banks still lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO GREAT CLIPS BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
Who finances it
Wells Fargo Bank National Association
16.3% of this brand's loans
That lender charges off 15.7% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
48.5%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
−2.0pp
multi-unit vs single-unit owners
Owners of multiple units default at 3.0%; single-unit owners at 5.0%.
Computed from 609 SBA 7(a)/504 loans to GREAT CLIPS franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $20K franchise fee (Item 5) and a total investment of $188K–$420K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$188K–$420K
all-in investment range
Franchise fee (Item 5)
$20K
upfront, one-time
Royalty (Item 6)
6%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$60K
6% of sales, before profit
Over a 10-yr term
$600K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for GREAT CLIPS with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 43 wage cases against operators of this system, recovering $43K in back wages for 164 workers, including 1 child-labor case. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
43
Back wages owed
$43K
Employees affected
164
Since 2020
1
1 of these cases involved child-labor violations, covering 1 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual GREAT CLIPS franchisees — separately owned businesses operating under the brand name — not GREAT CLIPS itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2024.
Modeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand looks safer than 87% of systems we score.
Risk percentile
13 / 100
Loan-corroborated
Modeled SBA charge-off
7.8%
Observed SBA charge-off
5.0%
Top drivers: System size (log units) (lowers) · Single-lender dependence (raises) · Share financed by high-loss lenders (lowers) · Item 20 exit rate (lowers). 15+ resolved loans stand behind this estimate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for GREAT CLIPS. That's a good sign — but it reflects news coverage, not a guarantee.
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing GREAT CLIPS's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →GREAT CLIPS franchise questions, answered from the filings
What percentage of GREAT CLIPS franchises closed last year?
In GREAT CLIPS's latest FDD Item 20 (fiscal 2024), 103 of 4,427 franchised outlets left the system — an annualized exit rate of 2.3% — compared with 5.4% across 23 beauty & personal care systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a GREAT CLIPS franchise cost?
Per GREAT CLIPS's 2025 FDD, buying in requires an initial franchise fee of $20K (Item 5) and a total initial investment of $188K–$420K (Item 7).
What royalty does GREAT CLIPS charge?
GREAT CLIPS charges an ongoing royalty of 6.0% of gross sales, per Item 6 of its 2025 FDD.
Does GREAT CLIPS disclose earnings (Item 19)?
Yes — GREAT CLIPS makes a financial performance representation in Item 19 of its 2025 FDD. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for GREAT CLIPS franchises default?
Across 609 SBA-backed loans to GREAT CLIPS franchisees since 1992, 26 of the 515 that have resolved were charged off — a 5.0% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.