Fantastic Sams Franchise in 2024: Costs, Fee & FDD
Discover the potential of owning a Fantastic Sams franchise! Learn about its proven business model, strong brand presence, and key investment details that could make it an interesting franchise opportunity for aspiring salon owners though there are key risk metrics to consider before diving in.
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Fantastic Sams, founded in 1974 by Sam Ross, is a well-established name in the hair care industry. It was one of the first full-service hair salon franchises in the U.S., making it a pioneer in its field. Sam’s vision was to provide affordable, high-quality salon services in a convenient, family-friendly setting. Today, Fantastic Sams remains a trusted brand, offering franchise opportunities to entrepreneurs interested in the beauty industry.
The core services offered by Fantastic Sams include haircuts, color services, styling, and texturizing treatments. They also offer ancillary services like beard trims, conditioning treatments, and hair care product sales. The franchise caters to a broad market, with its target demographic ranging from families to individuals looking for quick yet quality salon experiences at reasonable prices.
Fantastic Sams has grown substantially, boasting over 1,000 locations across the U.S. Its scale has made it one of the largest full-service salon chains in the country. With a strong presence in suburban and urban areas alike, Fantastic Sams serves millions of customers each year, offering accessibility and reliability for regular and walk-in clientele.
As a franchisee, you’ll benefit from a robust support system, including comprehensive training programs that cover salon management, customer service, and product sales. Fantastic Sams also offers marketing support, operational assistance, and ongoing development opportunities to ensure franchisees can thrive. The combination of its established brand, proven business model, and support structure makes it an appealing investment for those interested in the beauty industry.
Fantastic Sams Franchise Insights
- Fantastic Sams is known for offering a wide range of services, from haircuts to color treatments, making it an all-in-one salon destination for families and individuals alike.
- The franchise stands out in the beauty industry by combining affordability with full-service offerings, attracting both budget-conscious customers and those looking for convenience.
- As a franchisee, you’ll have the opportunity to benefit from strong brand recognition, thanks to decades of proven success and customer loyalty.
- Fantastic Sams focuses heavily on marketing support, ensuring that franchisees can effectively reach their local markets and drive consistent traffic.
Fantastic Sams Franchise Key indicators
Growth YOY (%)
-7%
vs industry 5%
Total U.S. Franchised Units
565
3-Year Failure Rate
24%
vs industry 11%
Sales-to-Investment ratio
1.3:1
How much does it cost to open a Fantastic Sams franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Fantastic Sams franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Fantastic Sams franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Fantastic Sams below from the most recent Item 7 below:
Type of Expenditure
Minimum Investment
Maximum Investment
Initial Franchise Fee
$30,000
$30,000
Travel and Living Expenses For You and Your Employees During Training
$1,500
$3,000
Leasehold Improvements (including architectural fees)
$30,000
$100,000
Rent
$1,500
$7,000
Utility Deposit
$500
$1,500
Initial Haircare Product Inventory (3-month supply)
$8,000
$13,000
Salon Equipment
$35,000
$40,000
Other Equipment, Fixtures, and Furnishings
$6,000
$10,000
New Salon Signage
$5,000
$15,000
Salon Supplies - Non Technical (3-month supply)
$3,000
$4,000
Salon Identity and Graphics Kit (interior graphics)
$1,000
$3,000
Grand Opening Marketing Plan/Advertising (first 6 months)
$15,000
$18,000
Insurance
$3,500
$6,500
Additional Funds (3 months)
$30,000
$50,000
Total
$169,000
$301,000
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Fantastic Sams franchise, the required capital involves both the initial investment costs and a net worth requirement set by the franchise. Let’s take a closer look below:
- Initial Investment The total estimated initial investment for a Fantastic Sams franchise ranges from approximately $169,000 to $301,000. This includes costs such as the franchise fee, salon setup, equipment, inventory, and funds for initial operating expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Requirement Fantastic Sams generally requires franchisees to have around $100,000 in liquid assets. This ensures that franchisees have adequate funds to cover ongoing operating costs, unforeseen expenses, and maintain financial stability in the early stages of business.
- Net Worth Requirement The recommended net worth to open a Fantastic Sams franchise is typically around $500,000 or more. This figure includes the value of assets like property, investments, and savings, minus liabilities, to show overall financial health and ability to manage the franchise long-term.
How much does a Fantastic Sams franchise owner make?
Calculating the salary of a Fantastic Sam franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Fantastic Sam franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Fantastic Sams Revenue & Gross Sales
Based on the most recent analysis, Fantastic Sams franchises achieved a median gross sales of $316,349, showcasing the consistent demand for affordable, full-service salon experiences. This financial performance highlights the franchise’s potential for steady revenue generation within the beauty industry, supported by a strong brand presence and loyal customer base.
Which key factors impact the average revenue performance of Fantastic Sams franchisees?
The performance of U.S. franchisee median gross sales for Fantastic Sams this past year was likely influenced by several key factors. One major contributor is the ongoing demand for affordable and convenient hair care services, particularly as consumers seek cost-effective options in a challenging economic climate. Additionally, the brand’s adaptability to trends such as online appointment scheduling and expanded product offerings may have helped drive customer retention and new business. The growing emphasis on self-care and personal grooming, combined with Fantastic Sams’ family-friendly appeal, likely kept foot traffic steady, contributing to a solid year of sales compared to the prior year.
Fantastic Sams Franchise Operational Costs
Operational costs for a Fantastic Sams franchise are the ongoing expenses necessary for the smooth day-to-day operation of the salon. These costs ensure that the business remains functional and provides quality service to customers. For a Fantastic Sams franchise, operational costs include:
- Labor Costs Wages and benefits for your hairstylists, receptionists, and other staff members are a significant ongoing expense, as salons require skilled employees to provide services.
- Product Costs Regular inventory purchases for hair care products, shampoos, styling products, and color treatments, both for use during appointments and for retail sales, make up a key cost.
- Rent or Lease Payments The cost of leasing your salon space, including property taxes, insurance, and any common area maintenance fees required by the location.
- Utilities Expenses for water, electricity, heating, and internet services, all essential for keeping the salon operational and comfortable for clients.
- Maintenance and Repairs Routine maintenance for salon equipment such as styling chairs, hair dryers, and washing stations, as well as unforeseen repairs that may arise.
- Supplies Costs for everyday salon supplies, including towels, combs, capes, cleaning products, and sanitation materials to ensure a clean, professional environment.
- Insurance Various insurance policies, including liability insurance, property insurance, and workers’ compensation, to protect your business and employees.
By carefully managing these costs, franchisees can maintain the financial health of their Fantastic Sams salon.
Fantastic Sams Franchise Fees
When running a Fantastic Sams franchise, there are several important ongoing fees to keep in mind. These fees contribute to the continued operation of your business and support the franchise’s overall growth. Below are some key fees to consider:
- Weekly Franchise Fee For the first 26 weeks after opening, the fee is $150 per week. After that, it becomes the greater of $350 per week or 6% of your salon’s gross sales from the previous week. This fee is payable every Monday and helps cover the cost of ongoing franchise support.
- National Advertising Fund Fee (NAF Fee) Currently set at $146.49, this fee supports the national marketing and advertising efforts that benefit all franchisees by driving brand awareness and customer traffic.
- Additional Fees There may be other fees, such as renewal or transfer fees if you’re renewing your agreement or purchasing an existing salon. These fees are typically adjusted based on specific terms and conditions.
These costs are crucial for maintaining the brand’s strength and supporting your salon’s success within the franchise system. Always refer to your franchise agreement for specific details.
Fantastic Sams Franchise Earnings
As a Fantastic Sams franchisee, the median gross sales of $316,349 provide a solid foundation for potential earnings. This figure represents the average revenue that franchise owners can expect from their salon’s performance. However, it’s important to note that actual earnings can vary depending on factors such as location, operational efficiency, and customer demand. Franchisees who are able to optimize their salon operations, build a loyal customer base, and manage costs effectively can potentially exceed the median sales figure.
For owner-operators, the average income is around $56,943. This reflects the earnings franchisees can expect to take home after covering operational expenses. As an owner-operator, actively managing the business day-to-day allows for tighter control over costs and customer service, which can positively impact profits. However, these earnings are not guaranteed, and careful financial management is essential to maximize profitability.
How to Open a Fantastic Sams Franchise
Here’s an overview of the process and steps involved in becoming a Fantastic Sams franchisee, from initial inquiry to opening your salon:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application After the initial inquiry, you’ll fill out a formal franchise application. This includes providing financial details to ensure you meet the requirements for liquid assets and net worth.
- Meet the Team and Due Diligence You’ll be invited to meet the Fantastic Sams corporate team, tour existing salons, and ask questions. This step allows both parties to determine if the partnership is a good fit.
- Sign the Franchise Agreement If you decide to proceed, you’ll sign the franchise agreement and pay the initial franchise fee.
- Training Program Fantastic Sams provides an extensive training program covering salon operations, customer service, marketing, and management. This helps you prepare to run your own salon effectively.
- Salon Setup and Build-Out After training, you’ll begin the process of setting up your salon. This includes site selection, lease negotiations, and build-out to meet Fantastic Sams’ specifications.
- Grand Opening Preparation Before launching, you’ll work with the corporate team to develop a marketing plan and finalize preparations for your grand opening.
- Start Operations Once everything is in place, you’ll officially open your Fantastic Sams salon and begin operations, supported by ongoing assistance from the franchise team.
Pros & Cons
Pros
Established Brand: Fantastic Sams has a strong reputation in the salon industry, with decades of experience and loyal customer recognition.
Diverse Revenue Streams: The franchise offers multiple services, including haircuts, color treatments, and retail product sales, allowing for varied income sources.
Affordable Entry Point: Compared to other franchises, the initial investment is relatively affordable, making it accessible for first-time franchisees
Cons
Competition: The beauty industry is highly competitive, with many local and national salon chains vying for customers.
Labor-Intensive Business: Running a salon requires skilled employees and high labor costs, which can impact profitability.
Location-Dependent Success: The performance of your franchise may be heavily influenced by its location, and finding the right spot can be challenging.
Moderate Profit Margins: While the median gross sales are solid, the overall profit margin can be modest, particularly for owner-operators.
