Merle Norman Cosmetics Franchise Cost, Revenue & Review 2026
- Investment
- $134K – $263K
- Disclosed sales
- not disclosed
- SBA charge-off
- 20.0%
- on 158 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Merle Norman Cosmetics franchise requires a total initial investment of $134K – $263K. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. SBA 7(a) loans show a 20.0% charge-off rate across 158 loans[1]. FranchiseVerdict grade: D (Below 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 scored2 of 2 headline figures on this page cite a page of the filing.
Overview
- Investment
- $134K – $263K
- 14th pct Retail
- Avg gross sales
- N/A
- Royalty
- Not extracted
- Units
- 757
- 42nd pct Retail
- SBA charge-off
- 20.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Retail · color = vs category peers
Green = favorable by >10% vs Retail 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 $134K – $263K.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict D (Below average), verdict score 36/100 (higher is better). SBA loan charge-off rate of 20.0% across 158 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -40 franchised outlets in the latest year (4 opened, 44 closed) (Item 20).
- DECLINESystem contracting at -11.8% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Merle Norman Cosmetics, Inc.
- Predecessor
- Various companies conducting the Merle Norman business since 1931
- Prior franchisor entity
- CEO title
- Chairman of the Board of Directors
- Jack Boison Nethercutt
- Incorporated in
- California
- HQ
- 9130 Bellanca Avenue, Los Angeles, California 90045
Overview
About
Independently-owned retail "Studio" selling Merle Norman cosmetics, skin care and color products, with free individualized makeover/skin-care instruction; studios may also be operated within an existing business location.
- CEO
- Jack Boison Nethercutt
- Headquarters
- California
- FDD year
- 2026
Can you afford it, and what does the money buy?
Entry cost runs 41% below the typical retail franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown16 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Real Estate | — | — | |
| Initial Package of Inventory and Supplies | $25K | $47K | |
| Millwork Fixtures | $23K | $26K | |
| Acrylic Organizers | $4K | $5K | |
| Tables & Chairs | $1K | $1K | |
| Graphics | $350 | $620 | |
| Mirrors | $350 | $500 | |
| Merchandising Pieces | $653 | $738 | |
| Flooring | $3K | $5K | |
| Lighting | $2K | $3K | |
| Interactive Play Table | $3K | $3K | |
| Digital Compu Stick | $0 | $250 | |
| Exterior Signage | $4K | $6K | |
| Construction | $21K | $96K | |
| Computer (hardware/software) | $2K | $5K | |
| Working Capital, Deposits, Insurance, and Advertising | $46K | $64K | |
| Total initial investment | $134K | $263K |
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
- $134K – $263K
- Top 40% of category vs category
- Liquid capital req'd
- $46K – $64K
- Top 40% of category vs category
- Franchise fee
- N/A
- Paid to franchisor at signing
- Royalty
- No royalty is charged. Franchisee's ongoing payments to M…
- Ad fund
- No mandatory ad fund contribution; MNC operates a discret…
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Inventory (initial) | $25K – $47K |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Merle Norman Cosmetics makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Merle Norman Cosmetics 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 annual revenue, royalty rate, ad fund rate, 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.
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
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System contracting at -11.8% 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 Retail medians
How Merle Norman Cosmetics Compares
Category median of published Retail 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
- 757
- Opened
- 4
- Last reporting year
- Closed
- 44
- Turnover rate
- 5.8%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -11.8%
- Net unit change over 3 years
- 3-yr CAGR
- -11.8%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 11
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
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 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 158
- Loan volume
- $11.3M
- Median loan
- $56K
- 50th percentile
- Charge-off rate
- 20.0%
- on 158 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 80.0%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 87
- Defaults
- 31
- Typical loan rate
- 6.0%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 4461
- Jobs supported
- 316
- 2.8 per loan
- Lender concentration
- 9%
- top lender's share
Vintage analysis
Merle Norman Cosmetics charge-off rate by loan vintage
Top lenders financing Merle Norman Cosmetics franchisees
Showing 3 of 87 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 Merle Norman Cosmetics from SBA 7(a) FOIA data.
- Principal loss rate
- 11.8%
- Avg SBA guarantee
- 74%
- Avg interest rate
- 6.01%
- Avg chargeoff amount
- $43K
- Lender concentration
- 9.5%
- Job velocity
- 2.8 per $100K
- Jobs supported
- 316
Top SBA lendersTop lender holds 9% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | 15 | N/A | N/A | |
| 2 | 8 | N/A | N/A | |
| 3 | 7 | N/A | N/A | |
| 4 | 4 | N/A | N/A | |
| 5 | 4 | N/A | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 33 | 8 | 25.8% |
| FLFlorida | 9 | 4 | 44.4% |
| ILIllinois | 8 | 0 | 0.0% |
| LALouisiana | 7 | 0 | 0.0% |
| IAIowa | 6 | 2 | 33.3% |
| NCNorth Carolina | 6 | 1 | 16.7% |
| OKOklahoma | 6 | 0 | 0.0% |
| ARArkansas | 5 | 0 | 0.0% |
| GAGeorgia | 5 | 1 | 20.0% |
| INIndiana | 5 | 0 | 0.0% |
SBA 7(a) lending trend
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
A 20.0% charge-off rate means roughly 1 in 5 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 20.0% — 25% above the 16.0% national norm, i.e. higher lender-observed risk.
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)
None disclosed.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Item 19 discloses no financial performance representations of any kind (franchisor makes none, and prohibits employees/reps from making any); MNC's own company-wide revenue for FY2025 was approximately $50,719,000 (Item 8), not a per-unit franchisee figure.
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
What are you signing up for?
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 |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Mandatory arbitration | No |
| Governing law | California |
| Litigation count | 0 |
View Item 3 litigation summary
None disclosed.
Items 10, 11
Training & Operations
- On-the-job training
- 0 hrs
- Training location
- Virtual (on-line training modules plus live virtual training classes); no in-person on-the-job component in Initial Training.
- Ongoing training
- Required
- Time to open
- 8 mo
- From signing to launch
- Site selection
- franchisee
- Franchisor financing
- Offered
- Item 10
- POS system
- MN POS Software Program
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: MN POS Software Program
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Merle Norman Cosmetics franchise?
The total investment to open a Merle Norman Cosmetics franchise ranges from $134K – $263K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Merle Norman Cosmetics franchise owners earn?
Merle Norman Cosmetics makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Merle Norman Cosmetics?
Merle Norman Cosmetics is franchised by Merle Norman Cosmetics, Inc.. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Merle Norman Cosmetics 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 Merle Norman Cosmetics FDD and qualifies whose outlets they describe.
What is Merle Norman Cosmetics's franchise failure rate?
Based on SBA 7(a) loan data, Merle Norman Cosmetics has a charge-off rate of 20.0% across 158 loans, meaning 20.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Merle Norman Cosmetics franchise locations are there?
As of their most recent FDD filing, Merle Norman Cosmetics has 757 total units in the United States, including 757 franchised units and 0 company-owned units. 4 new units were opened in the latest reporting year.
Is Merle Norman Cosmetics a good franchise to buy?
FranchiseVerdict rates Merle Norman Cosmetics as a D-grade franchise with a verdict score of 36 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.