Cost Cutters
Cost Cutters offers value-priced hair care services and products in Walmart stores and select locations, known for affordability and convenience in the beauty salon industry.
Cost Cutters franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a new COST CUTTERS in a Walmart store or other location ranges from $180,990 to $342,340. This includes a payment of $41,500 to $43,500 that must be paid to the franchisor or affiliate [p.1].
What is the initial franchise fee?
The initial franchise fee structure depends on whether you are a new or existing franchisee, but this specific amount is not detailed in the provided excerpts. [p.23] mentions that there is a schedule for the franchise fee structure, which isn't elaborated upon here.
What are the ongoing royalty and advertising fees?
Ongoing royalties are sales-based and recognized as revenue in the period of sale, typically billed and collected monthly [p.96]. Franchisees must also spend at least 1% of their gross revenues on approved local media advertising and promotion each quarter, with any shortfall required to be deposited with Cost Cutters for use in the franchisee's area [p.138].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
You cannot sell or transfer your franchise without the franchisor's consent. According to [p.163] and [p.200], any assignment or transfer is only effective if Cost Cutters receives a completely executed copy of all transfer documents and consents in writing to the transfer. This restriction is in place to protect the Cost Cutters Business System, marks, reputation, and image, as well as for the protection of other franchisees.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if there is good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and failing to cure such failure after being given written notice and a reasonable opportunity to do so [p.5]. Additionally, under Virginia law, a franchisor cannot cancel a franchise without reasonable cause [p.371].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD excerpts do not detail specific financial requirements such as net worth or liquid capital needed to qualify for a franchise.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other Cost Cutters franchises, outlets owned by Cost Cutters, or other competitive brands controlled by Cost Cutters [p.52, p.132].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training through virtual learning and other electronic means, as well as at a designated location such as their corporate headquarters or an existing Cost Cutters Salon. This includes training you and your managerial employees to operate a Cost Cutters Salon [p.49]. Additionally, the franchisor offers the Design Team Program to train your Design Team member in facilitating educational programs for the salon and stylists [p.51]. Training staff is overseen by Ms. Keelee MacDonald, who has experience in various operations roles within the company [p.50]. Ongoing support includes proportional release of franchise fees after meeting pre-opening obligations and being open for business [p.376-383].
How many franchised outlets are there, and how many have closed or been terminated?
There were 329 franchised outlets in the system during the period from July 1, 2024, through June 30, 2025. Among these, a large number of franchised outlets (277 - more than 50%) were terminated, not renewed, re-acquired by the franchisor, or ceased operations for other reasons during the last three years [p.4]. Additionally, there were 6 franchised outlets that did not report sales in each month of and were not open during the 12-month period from July 1, 2024, through June 30, 2025 [p.65].
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations, nor authorize its employees or representatives to do so. However, if purchasing an existing outlet, actual records of that outlet may be provided. Any other financial performance information should be reported to specific entities as outlined in the FDD [p.65].
What am I restricted to selling, and where must I buy supplies?
You are not specifically restricted to selling any particular products, but all Operating Assets and other products and services used or sold in the Salon must meet minimum standards and specifications set by the franchisor. You must buy or lease these items from approved suppliers, which may include the franchisor or its affiliates [p.35, p.37]. This isn't specified in the excerpts for all supplies, but you are required to use only approved sources for certain key assets and services [p.37, p.43].