Hammer & Nails Franchise Cost, Revenue & Review 2026
- Investment
- $694K – $944K
- Disclosed sales
- $929K
- gross sales, not profit
- SBA charge-off
- Limited · 50 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Hammer & Nails is a men's grooming franchise offering haircuts, hot-towel shaves, manicures, and pedicures in a lounge setting. Franchisees run the shops, managing licensed groomers, appointments, and retail products.
FranchiseVerdict summary · 2026
A Hammer & Nails franchise requires a total initial investment of $694K – $944K, including a $60K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $929K[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
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
- $694K – $944K
- 56th pct Personal Care…
- Avg gross sales
- $929K
- 24th pct Personal Care…
- Royalty
- 6.0%
- 12th pct Personal Care…
- Units
- 59
- 36th 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 $694K – $944K including a $60K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $929K/year (median $862K), with an estimated 8% cash-on-cash return (based on EBITDA7 $123,411).
- RISKVerdict B (Above average), verdict score 61/100 (higher is better).
- GROWTHNegative, pipeline stalled: 70 agreements signed but not yet open against 59 open outlets (Item 20).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- The Hammer & Nails Salon Group, LLC
- Predecessor
- and Affiliates
- Prior franchisor entity
- CEO title
- Chief Financial Officer, Board Member and Managing Member
- John Choi
- Incorporated in
- CA
- HQ
- 101 Parkshore Drive, Suite 100, Folsom, California 95630
- Auditor
- V H Velez Hardy CPAs and Advisors
- Audited financials
- Franchisor revenue
- $5.3M
- vs $4.0M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- John Choi
- Headquarters
- CA
- Founded
- 2015
- FDD year
- 2026
- States available
- 17
Can you afford it, and what does the money buy?
Entry cost runs 104% above the typical personal care & beauty franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown17 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $60K | $60K | |
| Construction and Leasehold Improvements | $278K | $383K | |
| Shop Site Plans and Designs | $10K | $22K | |
| Lease Deposits - Three Months | $24K | $36K | |
| Furniture, Fixtures and Equipment | $178K | $196K | |
| Signage | $10K | $13K | |
| Computer, Software and Point of Sale System | $3K | $5K | |
| Grand Opening Marketing | $23K | $30K | |
| Pre-Sales Member Acquisition | $9K | $18K | |
| Initial Inventory | $35K | $50K | |
| Utility Deposits | $7K | $14K | |
| Insurance Deposits - 12 Months | $2K | $8K | |
| Travel for Initial Training | $3K | $10K | |
| Professional Fees | $2K | $6K | |
| Licenses and Permits | $2K | $9K | |
| Liquor License Administrative Review Fee | $0 | $10K | |
| Additional Funds - Three Months | $50K | $75K | |
| Total initial investment | $694K | $944K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $694K – $944K
- Middle of category vs category
- Liquid capital req'd
- $50K – $75K
- Middle of category vs category
- Franchise fee
- $60K – $60K
- Middle of category vs category
- Royalty
- 6.0%
- typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
- Payback period
- 12.1 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $750 |
| Transfer fee | $17K |
| Renewal fee | $20K |
| Inventory (initial) | $35K – $50K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 76% above the personal care & beauty norm.
Source: FDD 2026 · 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 Hammer & Nails 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
$882K
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
FDD-reported earnings
The FDD reports $123K as EBITDA7 $123,411. This is a disclosed figure, not our estimate — we publish no modelled profit for Hammer & Nails.
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 Hammer & Nails 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: 2026 FDD
Financial Performance
- Avg gross sales
- $929K
- Per unit, per year
- Median gross sales
- $862K
- Avg ebitda7 $123,411
- $123K
- Reported as EBITDA7 $123,411 in FDD Item 19
- Cash-on-cash
- 8.3%
- Based on EBITDA7 $123,411 / investment midpoint
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 cohort; individual outlet EBITDA data; quartile analysis
- Sample size
- 43 outlets
- vs category median 38
- Range (low → high)
- $307K→$2.1MCited, not corroborated — printed on page 56 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 8 / 10
- vs category median 4 / 10 · above
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 $929K/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 8/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 90.3% CAGR over 3 years across 59 units — operators are staying and new ones are joining.
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 Hammer & Nails 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 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 59
- Opened
- 17
- Last reporting year
- Closed
- 1
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.7%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +90.3%
- Net unit change over 3 years
- 3-yr CAGR
- +90.3%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 1
- Not renewed
- 0
- Transferred
- 1
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 70
- 1.19 per open outlet · Item 20 Table 5
- Projected new
- 34
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 17 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
17
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 50
- Loan volume
- $23.0M
- Median loan
- $487K
- 50th percentile
- Charge-off rate
- Limited · 50 loans
- Limited SBA coverage: 50 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 50 loans
- 5-yr charge-off
- Limited · 50 loans
- Loans approved 2021+
- Active lenders
- 20
- Defaults
- 2
- Typical loan rate
- 9.0%
- avg rate to borrowers
- Franchised industry avg
- 6.0%
- n=861 loans
- Jobs supported
- 1,012
- 4.4 per loan
- Lender concentration
- 50%
- top lender's share
Borrower mix: 98% went to startups / new businesses, 2% to established operators
Franchise vs independent — in barber shops, franchised businesses charge off at 6.0% vs 18.7% for independents — franchising is associated with 68% lower SBA default risk in this category.
Top lenders financing Hammer & Nails franchisees
Showing 3 of 20 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Hammer & Nails from SBA 7(a) FOIA data.
- Principal loss rate
- 2.0%
- Avg SBA guarantee
- 69%
- Avg interest rate
- 9.00%
- Avg chargeoff amount
- $227K
- Lender concentration
- 50.0%
- Job velocity
- 4.4 per $100K
- NAICS benchmark
- 6.3%
- NAICS 812111
- Jobs supported
- 1,012
Top SBA lendersTop lender holds 50% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 25 | $9.0M | N/A |
| 2 | Citizens Bank | 4 | $2.7M | N/A |
| 3 | Wells Fargo Bank National Association | 2 | $720K | 0.0% |
| 4 | Bank of Clarke | 2 | $1.9M | N/A |
| 5 | Georgia's Own Credit Union | 2 | $548K | N/A |
| 6 | Citizens Business Bank National Association | 1 | $310K | 0.0% |
| 7 | CDC Small Business Finance Corp. | 1 | $250K | 100.0% |
| 8 | Cadence Bank | 1 | $350K | 100.0% |
| 9 | New York Business Development Corporation | 1 | $300K | N/A |
| 10 | Wilmington Savings Fund Society FSB | 1 | $653K | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| OHOhio | 15 | 0 | -- |
| CACalifornia | 6 | 1 | 25.0% |
| TXTexas | 5 | 1 | 100.0% |
| CTConnecticut | 4 | 0 | -- |
| GAGeorgia | 4 | 0 | -- |
| FLFlorida | 2 | 0 | -- |
| NVNevada | 2 | 0 | -- |
| PAPennsylvania | 2 | 0 | -- |
| UTUtah | 2 | 0 | -- |
| COColorado | 1 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
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
Hammer & Nails presents moderate risk with strong growth momentum offset by high capital requirements, thin margins, and unvalidated franchisee profitability claims.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
0 case reference(s): 0 pending, 0 settled.
Bankruptcy (Item 4)
Subject: the company or an affiliate. Disclosed (Item 4 covers the last 10 years)
Area Representative Nathanael Anderton filed Chapter 11 Subchapter V bankruptcy on September 2, 2025 (Case 2:25-bk-53836, Southern District of Ohio), later converted to ordinary Chapter 11 reorganization. Franchisor itself has not filed bankruptcy.
Audited financials (Item 21)
Yes · V H Velez Hardy CPAs and Advisors
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Item 21 audited Statements of Income (Velez Hardy). Revenue line $5,335,724 (FY2025) is operating revenue; FY2024 $3,967,297. Other income (rebates, interest, dividends, unrealized investment gains) of $323,505 reported separately below operating income. Net income FY2025 $162,506. Members' deficit (negative net worth) of ($2,488,478) reflects large deferred franchise fee liabilities.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 61 / 100 verdict
- 01MINORHigh initial investment ($694k-$944k) against modest net income ($123k avg) creates 5.6-7.6 year payback period without accounting for royalties
- 02MINORRapid unit growth (37.2% YoY) may indicate aggressive recruitment outpacing organic demand; sustainability unclear
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| 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 | 25 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles County, California |
| Jury trial waiver | No |
| Governing law | CA |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 30 hrs
- On-the-job training
- 56 hrs
- Training location
- Online (courses/Zoom) plus franchisee's Shop Location for on-site pre-opening training
- Ongoing training
- Required
- Field support
- 96 hrs/yr
- On-site visits per year
- Time to open
- 10 mo
- From signing to launch
- Site selection
- Franchisee selects, franchisor must approve
- Franchisor financing
- Not offered
- Item 10
- POS system
- Zenoti
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Zenoti
Item 20 · call current owners
Franchisee Contacts
90 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 Hammer & Nails franchise?
The total investment to open a Hammer & Nails franchise ranges from $694K – $944K, with an initial franchise fee of $60K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Hammer & Nails franchise owners earn?
According to Item 19 of the Hammer & Nails FDD, the average gross sales per unit is $929K. The median is $862K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Hammer & Nails?
Hammer & Nails is franchised by The Hammer & Nails Salon Group, LLC. The FDD names no parent company. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Hammer & Nails 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 Hammer & Nails FDD and qualifies whose outlets they describe.
What is Hammer & Nails's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Hammer & Nails (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 Hammer & Nails franchise locations are there?
As of their most recent FDD filing, Hammer & Nails has 59 total units in the United States, including 59 franchised units and 0 company-owned units. 17 new units were opened in the latest reporting year.
Is Hammer & Nails a good franchise to buy?
FranchiseVerdict rates Hammer & Nails as a B-grade franchise with a verdict score of 61 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
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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.