About Cost Cutters Franchise
Cost Cutters is a value priced hair salon franchise under parent company Regis Corporation, offering franchise opportunities since 1982.
Each salon provides professional haircuts, styling, and coloring services at affordable prices, serving individuals and families who want quality hair care without a premium price tag.
The brand maintains a welcoming, no appointment needed walk in format.
Cost Cutters Franchise Cost & Fees
Minimum Investment
$150K
Average Investment
$230K
Maximum Investment
$309K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $39,500 | One-time payment upon signing |
| Royalty Fee | 6% of Gross Revenues or $100 per week, whichever is greater (after first 52 weeks) of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 4% of Gross Revenues | National brand fund |
| Total Investment Range | $150,466 – $308,558 | Includes build-out, inventory, working capital |
The investment range of $150K–$309K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (6% of Gross Revenues or $100 per week, whichever is greater (after first 52 weeks)) and marketing fee (4% of Gross Revenues) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $12,500 | $39,500 |
| Leasehold Improvements | $60,000 | $120,000 |
| Furniture, Equipment and Supplies | $25,000 | $50,000 |
| Construction Management Services Fee | $5,500 | $7,500 |
| Construction and Design Plan Review | $500 | $1,000 |
| Post Build Review | $1,500 | $3,000 |
| Computer Software (Point of Sale System) | $2,040 | $2,040 |
| Computer Hardware/Installation and Onsite Training | $1,876 | $2,418 |
| Opening Inventory | $5,000 | $10,000 |
| Travel and Living Expenses during Orientation Training | $2,050 | $4,500 |
| Rent and Security Deposit | $2,500 | $9,600 |
| Grand Opening Advertising | $5,000 | $5,000 |
| Signs | $6,000 | $12,000 |
| Professional Fees | $6,000 | $12,000 |
| Additional Funds – 3-6 Months | $15,000 | $30,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | 1 store: $2,500; 2 stores: $4,500; 3 stores: $6,000; 4 stores: $7,000; 5 stores: $7,500; Each store after: $500 |
| Technology Fee | Up to $500 per year (Electronic Communications Fee); $170 per month (Computer Software Point of Sale System) |
| Audit Fee | Reimbursement of costs for examination (including legal fees, independent accountants’ fees, compensation and travel expenses for employees) if audit is necessary due to franchisee failure or understatement exceeding 2%. |
| Tax Reimbursement | Reimbursement of COST CUTTER’S tax payments |
| Annual Conventions | Up to $1,000 per person attending |
| Sublease payments | $2,500 - $9,600 Monthly |
| Lease Guaranty Fee | Amount by which 12% of monthly Gross Revenues exceed monthly lease payments |
| Interest Charges & Late Fees | 1.5% per month or highest commercial contract interest rate allowed by law, whichever is less; plus $100 administrative fee |
| Gift Card Transactions | $45 per download software download fee; $15 per terminal annual software maintenance fee; per transaction fees range from $.0225 to $.07; non-sufficient funds recovery fee of $.05 per card |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Approximately 20 hours, 42 minutes of classroom training. |
| Classroom Training | 20 hours, 42 minutes |
| On-the-Job Training | 0 hours |
| Training Location | Online or virtual learning, Cost Cutters Corporate Office in Minneapolis, MN, or other designated location. |
| Additional Training | Optional online technical training in Customer service, Haircutting, Color, Textured hair services, Styling, Back Bar services, Waxing and Retail. An annual Design Team Training event is also available. Other optional programs include Franchise Orientation, Situational Management Training, and Customized Workshops. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Non-exclusive |
| Exclusive Territory | No |
| Territory Size | Typically a city, cities, counties, or specific zip codes, as identified in the Development Agreement. |
| Description | Franchisees operate a Cost Cutters Store at an approved location, which may be in a Walmart store. No territorial rights are granted, and the franchisee may not relocate the store. Franchisees may face competition from other franchisees, company-owned outlets, or other distribution channels/competitive brands controlled by the franchisor or its affiliates. Development agreements may grant rights for multiple stores within a specific, non-exclusive territory. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 15 Years from the date your salon opens |
| Renewal Term | Under terms offered to other franchisees at the time of reacquiring the franchise |
| Renewal Conditions | Give 180 days notice; satisfy all material requirements of current Franchise Agreement; pay all amounts due to Cost Cutters; modernize Franchised Location; be in a position to occupy Franchised Location for at least 3 years; and sign a new Franchise Agreement. |
| Transfer Fee | 1 store: $2,500; 2 stores: $4,500; 3 stores: $6,000; 4 stores: $7,000; 5 stores: $7,500; Each store after: $500 |
| Transfer Conditions | Franchisor approval is required and will not be unreasonably withheld. Conditions include: all money owed to franchisor paid; compliance with franchisor's right of first refusal; written agreement satisfactory to franchisor; transferee's shareholders personally bound; transferee meets current standards and modernizes location (if store is over 7 years old and not remodeled in past 5 years); transferee acquires location; transferee signs current Franchise Agreement; transferee completes training; transfer fee paid. Franchisor may require original franchisee to remain liable if transferee does not meet net worth requirements. |
| Termination for Cause | Franchisor may terminate for curable defaults (e.g., failure to open within 180 days, material violation of agreement, failure to pay fees, insolvency, lease termination, abandonment) with 30 days to cure. Non-curable defaults (e.g., conviction of felony related to business, abandonment, conduct materially impairing marks/system not corrected within 24 hours, failure to comply with audit, termination of another franchise agreement with franchisor) may result in immediate termination. |
| Non-Compete Period | 2 years |
| Non-Compete Details | During the term of the franchise, the franchisee may not participate in any competing business. After termination or expiration, the franchisee may not participate in any business that competes with (including over the Internet) or is within six miles of any Cost Cutters Business for two years. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | No |
| Participation Details | The franchisee (or an approved managing partner or owner) must supervise the development and operations of franchised Cost Cutters Stores but is not required to be engaged in day-to-day operations. A District Manager, approved and trained by the franchisor, is required for every 6 Cost Cutters Stores owned by the franchisee, responsible for their operation and supervision. Each store must have at least one on-site manager. |
| Required Suppliers | Yes, for Operating Assets (furniture, fixtures, signs, equipment, software licenses), Point of Sale and Back Office System (Zenoti), and initial inventory of hair care products, merchandise, and supplies. |
| Supply Restrictions | Franchisor restricts types, models, and brands of required items; designates and approves manufacturers, suppliers, and distributors (which may include franchisor or affiliates); requires use of Zenoti System for POS; requires approval for all marketing materials; mandates adherence to construction guidelines and specifications (Plans); and requires specific signs, emblems, and logos. |
| Franchisor Revenue from Suppliers | Regis and/or its affiliates may derive revenue (promotional allowances, volume discounts, commissions, rebates, etc.) from designated, approved, or recommended suppliers. For Fiscal Year 2022, Regis' total revenue was $279,778,286. Revenue from required purchases included: Computer point-of-sale and back-office system: $628,615.00 (0.22%); Construction management and FF&E coordination services: $0 (0.00%); Hair Care Products and Supplies: $1,067,030.40 (0.38%); Lease $300 up charge: $229,161.16 (0.08%). The approved supplier of store build-out coordination services pays Regis 20%-80% of revenue from franchisee purchases. The designated hair care product supplier pays Regis 6% of sales price for private label products and 3% for other products. The credit card processor paid Regis $.0065-$.0315 per authorization and 2%-6% of eligible revenue in the last fiscal year, but the current processor does not pay incentives or rebates. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | Yes |
| Description | Cost Cutters and its agents and affiliates do not offer direct or indirect financing or guarantee notes or obligations, except that Cost Cutters reserves the right to lease directly from the landlord and require the franchisee to sublease the Franchised Location from Cost Cutters or an affiliate. If Cost Cutters agrees to guarantee lease obligations, it reserves the right to charge a monthly fee equal to the amount by which 12% of monthly gross sales exceeds monthly lease payments (Walmart locations are subject to a $300 up charge). |
Cost Cutters Franchise Earnings — Item 19
Average Revenue
$233K
Median Revenue
$221K
Revenue Range
$16K – $1.1M
Sample Size
573 units
Past financial performance does not guarantee future results. Individual results will vary.
Cost Cutters Litigation & Risk Flags
2 Pending Actions ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Cost Cutters System Growth
Total Units
605
Franchised
604
Company-Owned
1
Cost Cutters currently operates 604 franchised locations and 1 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2020 | 200 | 31 | 547 |
| 2021 | 141 | 51 | 638 |
| 2022 | 6 | 40 | 604 |
Transfers: 52 | Closures: 40
State Registrations
Registered in 36 states: AL, AZ, CA, CO, CT, DE, FL, ID, IA, IL, IN, KY, MA, MI, MN, MO, MT, NE, NV, NJ, NM, NY, NC, ND, OH, OR, PA, SC, SD, TN, TX, VA, WA, WI, WV, WY
Franchisor Financials (Item 21)
Revenue
$276.0M
Net Income
$-85,857,000
Total Assets
$769.3M
Audited by Grant Thornton LLP for year ending June 30.
Cost Cutters Franchise — FAQ
The total investment to open a Cost Cutters franchise ranges from $150,466 to $308,558, per their Franchise Disclosure Document. This includes the initial franchise fee of $39,500. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Cost Cutters charges a royalty fee of 6% of Gross Revenues or $100 per week, whichever is greater (after first 52 weeks) of gross sales, plus a 4% of Gross Revenues contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Cost Cutters Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Cost Cutters to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Cost Cutters franchise owners report average revenue of $233K and median revenue of $221K. This is based on a sample of 573 units. Past performance does not guarantee future results.
Cost Cutters has been franchising since 1982. The FDD shows an investment range of $150,466-$308,558, a 6% of Gross Revenues or $100 per week, whichever is greater (after first 52 weeks) royalty, and includes an Item 19 earnings disclosure. There are 2 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $39,500 and the total investment ranges from $150,466 to $308,558 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Cost Cutters and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Cost Cutters or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com