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Great Clips

Established in 1982, Great Clips is the largest brand in the $55 billion hair care industry. Great Clips salons are conveniently located in strip malls in more than 130 markets throughout the U.S. and Canada, and no appointments are necessary for men, women, and children to get quality haircuts and perms at competitive prices. With an extensive support system, Great Clips will undoubtedly continue to capture significant market share in the value haircut segment of the hair care industry.

Great Clips satisfies a built-in demand that is stable and immune to recessions. Serious franchisees are allowed to purchase multiple units to increase their market penetration. Great Clips is efficiently run as a cash business with no receivables and little inventory. Salons can be operated by managers and franchisees can maintain their corporate positions while opening multiple units.

Operating Units	12/31/2006	12/31/2007	12/31/2008
Franchised	2,566	2,646	2,738
% Change	--	3.1%	3.5%
Company-Owned	4	1	0
% Change	--	-75.0%	-100.0%
Total	2,570	2,647	2,738
% Change	--	3.0%	3.4%
Franchised as % of Total	99.84%	99.96%	100.00%

Investment Required

The fee for a Great Clips franchise is $20,000.

Great Clips provides the following range of investments required to open your initial franchise. The range assumes that all items are paid for in cash. To the extent that you choose to finance any of these expense items, your front-end investment could be substantially reduced.

Item	Established Low Range	Established High Range
Franchise Fee	$20,000	$20,000
Initial Advertising Contribution	$5,000	$5,000
Training Expenses (per participant)	$1,500	$2,500
Architecture Fees	$500	$3,000
Leasehold Improvements, including Labor	$20,000	$50,000
Rent and Security Deposits	$1,000	$8,000
Fixtures, Signage and Furnishings, including Computer	$30,000	$40,000
Freight	$1,200	$2,200
Sales Tax on Fixtures, Signage and Furnishings	$0	$1,500
Opening Inventory and Supplies	$4,700	$6,400
Opening Advertising	$12,000	$12,000
Insurance	$1,500	$2,400
Lease Liability Fee	$0	$3,000
Lease Review Fee	$0	$1,500
Additional Funds (6-12 months)	$12,000	$45,000
Total Investment	$109,400	$202,500

On-going Expenses

Great Clips franchisees pay a continuing franchise fee equal to 6% of gross sales and a continuing advertising fee equal to 5% of gross sales. Other fees payable by the franchisee include monthly local co-op dues and software license and support fees.

What You Get—Training and Support

Great Clips provides comprehensive training to the franchisee, salon manger and stylists. Franchisees begin with a four-day New Franchisee Orientation and Training session in Minneapolis, MN, and then receive marketing training and ongoing support at area training centers. Professional Stylist Training and employee training are also given at area training centers, reducing costs. Great Clips focuses on recruitment and provides a range of custom recruiting tools to gain quality staff.

In addition to constantly updated operating manuals, forms, brochures, tools and handbooks that assist in everyday operations, Great Clips provides an informative newsletter for franchisees, management staff and stylists. Annual meetings, conventions and leadership conferences take place to provide further educational opportunities and exchange news and ideas.

Great Clips promotes the Great Clips brand in print, radio and television. Great Clips devotes itself to consumers’ needs, and assists franchisees in maintaining local public relations, community relations, and marketing and advertising efforts.

Territory

Great Clips grants protected areas with a radius ranging from ¹/₁₀ to ¾ of a mile depending on population density.



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