Cost Cutters Franchise Cost, Revenue & Review 2026
- Investment
- $181K – $342K
- Disclosed sales
- $280K
- gross sales, not profit
- SBA charge-off
- Under 10 loans (9)
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Cost Cutters is a value hair-salon franchise offering affordable cuts, color, and styling for the whole family. Franchisees run salons managing stylists, walk-in and appointment service, and retail products.
FranchiseVerdict summary · 2026
A Cost Cutters franchise requires a total initial investment of $181K – $342K, including a $13K – $40K franchise fee and an ongoing 4.0% royalty[2]. Per the 2025 FDD, average unit revenue was $280K[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2025 filing · Data extracted: · Last cited check: · Staleness risk: medium - a newer filing may exist
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $181K – $342K
- 18th pct Personal Care…
- Avg gross sales
- $280K
- 1st pct Personal Care…
- Royalty
- 4.0%
- 1st pct Personal Care…
- Units
- 405
- 55th pct Personal Care…
- SBA charge-off
- N/A
Quick verdict · Personal Care & Beauty · color = vs category peers
Green = favorable by >10% vs Personal Care & Beauty median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $181K – $342K including a $40K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $280K/year (median $261K).
- RISKVerdict B (Above average), verdict score 46/100 (higher is better).
- GROWTHNegative: net -134 franchised outlets in the latest year (2 opened, 136 closed); 3 signed but not yet open (Item 20).
- LEGAL16 litigation matters disclosed in Item 3, higher than typical. Of the 15 listed on this page, 1 names the franchisor itself, 14 its parent, affiliates or predecessor. Pending claims are allegations, not findings.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- The Barbers, Hairstyling for Men & Women, Inc.
- Parent company
- Regis Corporation
- FDD Item 1, page 9 of the 2025 FDD
- CEO title
- Interim President and Chief Executive Officer, Regis Corporation
- Jim Lain
- Incorporated in
- MN
- HQ
- 3701 Wayzata Boulevard, Suite 600, Minneapolis, MN 55416
- Auditor
- Not specified in extracted text (PCAOB-registered firm)
- Audited financials
- Franchisor revenue
- $210.1M
- vs $203.0M prior year
Same owner · FDD Item 1, page 9
3 other brands on this site name Regis Corporation as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Jim Lain
- Headquarters
- MN
- Founded
- 1968
- FDD year
- 2025
- States available
- 31
Can you afford it, and what does the money buy?
Entry cost runs 35% below the typical personal care & beauty franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $40K | $40K |
| Working capital (3–6 mo) | $15K | $45K |
| Equipment, build-out, other | $126K | $258K |
| Total initial investment | $181K | $342K |
Source: Cost Cutters 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $181K – $342K
- Top 40% of category vs category
- Liquid capital req'd
- $15K – $45K
- Top 40% of category vs category
- Franchise fee
- $13K – $40K
- Top 40% of category vs category
- Royalty
- 4.0%
- Tiered by sales volume · typical 6–8%
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 4.0% of gross sales |
| Technology fee | $500 |
| Transfer fee | $3K |
| Renewal fee | $0 |
| Inventory (initial) | $5K – $10K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 47% below the personal care & beauty norm.
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Cost Cutters until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$292K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Cost Cutters unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
- Avg gross sales
- $280K
- Per unit, per year
- Median gross sales
- $261K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Gross Sales by performance tier (top/mid/bottom)
- Sample size
- 323 outlets
- vs category median 38 · large
- Range (low → high)
- $8K→$1.1MCited, not corroborated — printed on page 65 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $148K→$432K
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2025
- The FDD edition these figures were read from
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 177 Personal Care & Beauty brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $280K/year in gross sales. Revenue-to-investment ratio: 1.1x.
Fee burden
Total ongoing fee load of 8.0% (near the Personal Care & Beauty median).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -36.9% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Personal Care & Beauty medians
How Cost Cutters Compares
Category median of published Personal Care & Beauty brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 405
- Opened
- 2
- Last reporting year
- Closed
- 136
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 16.1%
- Company-owned
- 76
- Corporate units in the system
- % franchised
- 81%
- vs corporate-owned
- Net growth (3-yr)
- -36.9%
- Net unit change over 3 years
- 3-yr CAGR
- -36.9%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 63
- Reacquired
- 81
- Franchisor bought back
- Signed, not yet open
- 3
- 0.01 per open outlet · Item 20 Table 5
- Projected new
- 3
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 9 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
78 current owners across 9 states.
- AZ 20
- IA 17
- CO 16
- CT 12
- AL 4
- DE 4
- WI 3
- FL 1
- WY 1
Counts only, from the list the franchisor prints in Item 20; 307 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 9 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 9
- Loan volume
- $5.5M
- Median loan
- $641K
- 50th percentile
- Charge-off rate
- Under 10 loans (9)
- Insufficient SBA coverage: 9 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (9)
- 5-yr charge-off
- Under 10 loans (9)
- Loans approved 2021+
- Active lenders
- 7
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
11 cases involving affiliated entities (Supercuts, RPC, The Barbers, Regis); mix of collection/counterclaim arbitrations, misrepresentation claims, a trade secrets suit (Propoint), and a consumer class action (Delamarter); majority settled with payments to franchisees; one current matter (Aboukoura) in process of settlement documentation.
Largest disclosed settlement: $300,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Not specified in extracted text (PCAOB-registered firm)
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Financial statements are those of parent Regis Corporation (consolidated), not the franchisor The Barbers, Hairstyling for Men & Women, Inc. Reported in thousands. FY2025 total revenue $210,134K = Royalties $58,163K + Fees $9,717K + Advertising fund $21,924K + Franchise rental income $76,599K + Company-owned salon revenue $43,731K.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 46 / 100 verdict
- 01MEDSevere unit decline of 28.9% YoY indicates systemic franchisee distress and system contraction
- 02HIGHMultiple fraud and misrepresentation litigation claims including build-out costs and financial performance misstatements undermine credibility
- 03MINORUnprotected territory creates direct competition risk between franchisees and cannibalization within existing market
- 04MINOREscalating royalty structure (4% to 6%) after year one increases burden during critical cash flow periods when franchisees are most vulnerable
- 05HIGHClass action litigation regarding credit card data security on receipts indicates operational/compliance failures and liability exposure
- 06HIGHCollections litigation against franchisees with counterclaims of fraud suggests adversarial franchisor-franchisee relationship and potential predatory practices
Severity inferred from the FDD text · not a regulatory classification
Litigation case detail16 matters · Item 3
Litigation cases
The franchisor
Concluded (1)
Joseph and Elizabeth Sims, Big Hair Salons, LLC v. The Barbers, Hairstyling for Men & Women, Inc.
settledBrought by a franchisee · filed 2021-02-16 · AAA · 01-21-0001-9146
“Joseph and Elizabeth Sims, Big Hair Salons, LLC v. The Barbers, Hairstyling for Men & Women, Inc., AAA Case No. 01-21-0001-9146 (filed February 16, 2021). A Smartstyle franchisee (“Franchisee”) and its owners (collectively with the Franchisee, the “Sims”) filed an arbitration with the AAA against The Barbers, Hairstyling for Men & Women, Inc. , Regis Corporation, and Regis Corp.”Page 18 of the 2025 FDD, Item 3
Outcome:“This matter was settled on August 9, 2022, for $210,000.00 to be paid by The Regis Entities to the Sims.”
Parent, affiliates and predecessor
Pending (1)
Supercuts, Inc. v. Mohamed Aboukoura and iEndeavor, LLC
pendingBrought against a franchisee · Supercuts, Inc. (with parent Regis Corporation) · filed 2021-01-26 · AAA · 01-21-0000-3502
“Supercuts, Inc. v. Mohamed Aboukoura and iEndeavor, LLC (AAA Case No. 01-21-0000-3502, filed January 26, 2021). This case was a collections matter against a franchisee; the franchisee asserted counterclaims for violation of the Virginia Franchising and Consumer Protection Acts, the Minnesota Franchise Act, and common law fraud claims.”Page 18 of the 2025 FDD, Item 3
Outcome:“The parties have agreed to a resolution and documentation of settlement agreement are in process, with Aboukoura agreeing to pay Supercuts and Regis $95,000.00.”
Concluded (13)
Supercuts, Inc. v. Court Curneen and Quartz, LLC
settledBrought against a franchisee · Supercuts, Inc. (claimant; Regis Corporation joined in the settlement) · filed 2021-01-26 · AAA · 01-21-0000-3506
“Supercuts, Inc. v. Court Curneen and Quartz, LLC (AAA Case No. 01-21-0000-3506, filed January 26, 2021). This case was a collections matter against a franchisee. The franchisee asserted counterclaims for violation of the Virginia Franchising and Consumer Protection Acts, the Minnesota Franchise Act, and common law fraud claims.”Page 19 of the 2025 FDD, Item 3
Outcome:“This matter was settled on March 3, 2022, with Supercuts, Inc. and Regis Corporation agreeing to pay the franchisee $29,500.00.”
Supercuts, Inc. v. Daniel C. Negussie, Grimt Habtermariam, and DnG, LLC
settledBrought against a franchisee · Supercuts, Inc. (claimant) · filed 2021-01-26 · American Arbitration Association · 01- 21-0000-3507
“Supercuts, Inc. v. Daniel C. Negussie, Grimt Habtermariam, and DnG, LLC, AAA Case No. 01- 21-0000-3507 (Filed January 26, 2021). Supercuts filed an arbitration with the AAA against Daniel C. Negussie, Grimt Habtermariam, and DnG, LLC (collectively, “Negussie”), for past due royalties, advertising fund contributions and rent in the amount of $105,721.13.”Page 18 of the 2025 FDD, Item 3
Outcome:“This matter was settled on April 12, 2022, for $150,000.00 to be paid by Supercuts to Negussie”
Supercuts, Inc. v. Keith and Marie Shaffer, KeiMar LLC, KieMar II LLC, and KeiMar III LLC
settledBrought against a franchisee · Supercuts, Inc. (claimant; Regis Corporation joined in the settlement) · filed 2021-01-26 · AAA · 01-21-0000-3504
“Supercuts, Inc. v. Keith and Marie Shaffer, KeiMar LLC, KieMar II LLC, and KeiMar III LLC (AAA Case No. 01-21-0000-3504, filed January 26, 2021). This case involved a collections matter against franchisee. Franchisee asserted counterclaims for violation of the Virginia Franchising and Consumer Protection Acts, the Minnesota Franchise Act, and common law fraud claims.”Page 19 of the 2025 FDD, Item 3
Outcome:“This matter was settled on June 16, 2022, with Supercuts Inc. and Regis Corporation agreeing to pay the franchisee and its principals $280,000.00.”
Supercuts, Inc. v. Scott and Vicki Furber and Dawg Concepts, Inc.
settledBrought against a franchisee · Supercuts, Inc. (claimant) · filed 2021-01-26 · American Arbitration Association · 01-21-0000- 3512
“Supercuts, Inc. v. Scott and Vicki Furber and Dawg Concepts, Inc., AAA Case No. 01-21-0000- 3512 (Filed January 26, 2021). Supercuts filed an arbitration with the American Arbitration Association (“AAA”) against Scott and Vicki Furber and Dawg Concepts, Inc. (collectively, “Furber”), for past due royalties, advertising fund contributions and rent in the amount of $656,725.96.”Page 18 of the 2025 FDD, Item 3
Outcome:“This matter was settled on April 12, 2022, for $110,000.00 to be paid by Supercuts to Furber.”
Propoint Solutions, LLC v. Regis Corporation, Chad Kapadia, et al.
settledThird-party plaintiff · Regis Corporation ('The Franchisor's parent') and its Chief Technology Officer Chad Kapadia · filed 2020-03-31 · N.D. Cal. · 3:20-cv-2181-MMC
“Propoint Solutions, LLC v. Regis Corporation, Chad Kapadia, et al. Case No. 3:20-cv-2181-MMC (N.D. Cal. Filed March 31, 2020). The Franchisor’s parent, Regis Corporation (“Regis”) and Regis’s Chief Technology Officer were sued by Regis’s point of sale and back office system supplier, ProPoint Solutions,”Page 19 of the 2025 FDD, Item 3
Outcome:“Regis and Propoint entered into a settlement agreement, effective June 25, 2021, that provided for the dismissal of the lawsuit and set forth a commercial services agreement” (page 20)
Sea Fever Ventures, Inc., John Lovegrove, and Judith Lafleur-Lovegrove v. Regis Corporation and Supercuts, Inc.
judgmentBrought by a franchisee · Supercuts, Inc. and its parent Regis Corporation · filed 2020-11-18 · American Arbitration Association · 01-20-0015-7648
“Sea Fever Ventures, Inc., John Lovegrove, and Judith Lafleur-Lovegrove v. Regis Corporation and Supercuts, Inc. (AAA Case No. 01-20-0015-7648, filed November 18, 2020). A Supercuts franchisee and its owners filed an arbitration with the American Arbitration Association”Page 19 of the 2025 FDD, Item 3
Outcome:“On November 23, 2021, the Arbitrator issued his final award and found that Supercuts’ sale of the franchise to the franchisee violated the FTC Rule, the VRFA, and the VCPA and awarded a total amount to the franchisee of $1,015,104.83, representing damages for the aforementioned claims, together with interest,”
Delamarter v. Supercuts, Inc.
settledThird-party plaintiff · Supercuts, Inc. · filed 2019-11-19 · Hennepin County District Court, Minnesota · 27-cv-19-19280
“Delamarter v. Supercuts, Inc. (Case No. 27-cv-19-19280, Hennepin County District Court, Minnesota). This case was filed as a class action against Supercuts on November 19, 2019, on behalf of Plaintiff and a putative class of consumers”Page 21 of the 2025 FDD, Item 3
Outcome:“During a mediation on January 6, 2023, the Parties reached a settlement that requires third-party ProPoint’s insurance carrier, CNA, to pay $285,000 total, which includes $5,000 each for Plaintiffs Delamarter and Cone, with the balance being payable to Plaintiff’s counsel. The case has now been dismissed pursuant to the settlement agreement.”
North Star Solutions, Inc. v. Supercuts, Inc. a Division of Regis, Inc.
settledBrought by a franchisee · Supercuts, Inc. and Regis, Inc. (n/k/a Regis LLC) · filed 2018-05-04 · AAA · 01-18-0001- 6461
“North Star Solutions, Inc. v. Supercuts, Inc. a Division of Regis, Inc. (AAA Case No. 01-18-0001- 6461, filed May 4, 2018). A Supercuts franchisee filed an arbitration against Supercuts, Inc., the franchisor, and its affiliate, Regis, Inc. (n/k/a Regis LLC), alleging violation of the Minnesota Franchise Act,”Page 21 of the 2025 FDD, Item 3
Outcome:“Supercuts and Regis denied the allegations and settled the matter in October 2018 without admitting liability by refunding $25,000 to the franchisee”
Kevin Waters, Mary Jane Waters, and Salon Waters, Inc. v. RPC Acquisition Corp. and Regis Corporation
settledBrought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2016-03-25 · AAA · 01-16-0001-0283
“Kevin Waters, Mary Jane Waters, and Salon Waters, Inc. v. RPC Acquisition Corp. and Regis Corporation (AAA Case No. 01-16-0001-0283, filed March 25, 2016)”Page 20 of the 2025 FDD, Item 3
Outcome:“$115,000 to Kevin and Mary Jane Waters, and Salon Waters, Inc. and assumed their remaining lease liabilities;” (page 21)
Chad Schwinghammer, Andrea Woodley Schwinghammer, and Schwings Centennial Lakes, Inc. v. RPC Acquisition Corp., Regis Corporation, and Pro-Cuts Corporate Shops, Inc.
settledBrought by a franchisee · RPC Acquisition Corp., Pro-Cuts Corporate Shops, Inc. (affiliates of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-12-18 · American Arbitration Association · 01-15-0006-0307
“Chad Schwinghammer, Andrea Woodley Schwinghammer, and Schwings Centennial Lakes, Inc. v. RPC Acquisition Corp., Regis Corporation, and Pro-Cuts Corporate Shops, Inc. (AAA Case No. 01-15-0006-0307, filed December 18, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome:“Regis and its affiliates paid $300,000 to Chad and Andrea Schwinghammer and Schwings Centennial Lakes, Inc. and assumed their remaining lease liabilities;” (page 21)
David Williams, Shelly Williams, and Look Sharp, LLC v. RPC Acquisition Corp. and Regis Corporation
settledBrought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-07-10 · American Arbitration Association · 01-15-0004-2079
“David Williams, Shelly Williams, and Look Sharp, LLC v. RPC Acquisition Corp. and Regis Corporation (AAA Case No. 01-15-0004-2079, filed July 10, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome:“$300,000 to David and Shelly Williams and Look Sharp, LLC;” (page 21)
Jason Link and Link JAS, Inc. v. RPC Acquisition Corp and Regis Corporation
settledBrought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-10-06 · American Arbitration Association · 01-15-0005-2403
“Jason Link and Link JAS, Inc. v. RPC Acquisition Corp and Regis Corporation (AAA Case No. 01-15-0005-2403, filed October 6, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome:“$175,000 to Jason Link and Link JAS, Inc. and assumed their remaining lease liabilities;” (page 21)
Scott Carlson, Jacquelyn Carlson, and SKC Concepts, Inc. v. RPC Acquisition Corp. and Regis Corporation
settledBrought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-07-13 · American Arbitration Association · 01-15-0004- 2072
“Scott Carlson, Jacquelyn Carlson, and SKC Concepts, Inc. v. RPC Acquisition Corp. and Regis Corporation (AAA Case No. 01-15-0004- 2072, filed July 13, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome:“$215,000 to Scott Carlson, Jacquelyn Carlson and SKC Concepts, Inc.;” (page 21)
This list shows 15 of the 16 matters Item 3 discloses; the rest are in the filing.
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 15 years |
|---|---|
| Renewal term | 15 years |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 6 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 10 |
| Mandatory arbitration | Yes |
| Arbitration location | Minneapolis, Minnesota (Hennepin County) |
| Jury trial waiver | Yes |
| Governing law | State where franchised business is located |
| Litigation count | 16 |
View Item 3 litigation summary
11 cases involving affiliated entities (Supercuts, RPC, The Barbers, Regis); mix of collection/counterclaim arbitrations, misrepresentation claims, a trade secrets suit (Propoint), and a consumer class action (Delamarter); majority settled with payments to franchisees; one current matter (Aboukoura) in process of settlement documentation.
Items 10, 11
Training & Operations
- Classroom training
- 10 hrs
- On-the-job training
- 0 hrs
- Training location
- Online/virtual learning, Cost Cutters Corporate Office in Minneapolis MN, or other location designated by franchisor
- Ongoing training
- Required
- Time to open
- 2 mo
- From signing to launch
- Site selection
- Franchisor must approve proposed sites; franchisee identifies and proposes sites within franchisor criteria
- Franchisor financing
- Not offered
- Item 10
- POS system
- Zenoti (Soham, Inc.)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Zenoti (Soham, Inc.)
Item 20 · call current owners
Franchisee Contacts
385 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Cost Cutters franchise?
The total investment to open a Cost Cutters franchise ranges from $181K – $342K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Cost Cutters franchise owners earn?
According to Item 19 of the Cost Cutters FDD, the average gross sales per unit is $280K. The median is $261K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Cost Cutters?
Cost Cutters is franchised by The Barbers, Hairstyling for Men & Women, Inc.. Its parent company is Regis Corporation. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Cost Cutters FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Cost Cutters FDD and qualifies whose outlets they describe.
What is Cost Cutters's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Cost Cutters (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Cost Cutters franchise locations are there?
As of their most recent FDD filing, Cost Cutters has 405 total units in the United States, including 329 franchised units and 76 company-owned units. 2 new units were opened in the latest reporting year.
Is Cost Cutters a good franchise to buy?
FranchiseVerdict rates Cost Cutters as a B-grade franchise with a verdict score of 46 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Cost Cutters, you can request corrections or provide updated information.
Other Personal Care & Beauty franchises
Compare similar franchise opportunities in the Personal Care & Beauty category
Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.