How to Finance a Great Clips Franchise: Salon Costs and Fees
By Chris Cornella
A Great Clips franchise loan typically funds something smaller and simpler than a restaurant or hotel: a leased storefront of a few stations, a build-out, a grand opening campaign and enough cash to carry payroll while a new salon earns its regulars. That modest footprint is part of the appeal, but it also means the details of the budget, the lease and the staffing plan carry a lot of weight with lenders.
This guide walks through what it costs to open or buy a Great Clips salon, the fees that continue after opening, what the franchisor expects from new owners and how SBA, conventional and equipment financing may fit. It is general information only. US Professional Funding is not affiliated with, sponsored by or endorsed by Great Clips; the name is used only to describe the business. Figures drawn from the franchisor’s disclosure document and franchise materials can change, loan programs vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Great Clips Franchise Loan at a Glance
The figures below come from the investment summary and answers to common questions that Great Clips publishes on its franchise website as of 2026. The company notes that a franchise offer can be made only through its Franchise Disclosure Document (FDD), so always confirm these figures against the current FDD for your market.
- Franchise fee: the company’s FAQ describes the franchise fee as $20,000; its US investment chart shows a range of $20,000 to $35,000
- Initial advertising contribution: $5,000 to the Market Development Advertising Fund for each franchise agreement
- Royalty: 6% of gross sales
- Estimated initial investment (US): $187,800 to $419,900
- Minimum net worth and liquid assets: $500,000 and $100,000 in most markets, or $1,000,000 and $250,000 in high-cost markets
- Credit: a credit score of at least 675, plus a clean background
- Franchise term: 10 years
- System size: more than 4,400 salons owned by more than 700 franchisees across the US and Canada
- Franchisor financing: Great Clips states that it does not provide financing
- SBA Franchise Directory: listed as “Great Clips,” code S0743, with no special directory notes
What Is Great Clips?
Great Clips, Inc. was established in 1982 in Minneapolis, Minnesota, by David Rubenzer and Steve Lemmon, who opened the first salon near a local university campus. The first franchised location opened in the summer of 1983, the first Canadian salon followed in 1993, and by 2020 the brand had salons in all 50 states. The company describes itself as 100 percent franchised and reports more than 4,400 salons and roughly 30,000 stylists across the US and Canada.
The concept is a walk-in haircut salon built around convenience, with customers able to use the Great Clips app, which the company says passed 20 million total downloads in 2022. According to the franchisor, the average salon runs about 900 to 1,200 square feet, typically in leased retail space rather than a freestanding building the owner buys.
Two features shape how lenders view the brand. First, the salon is a small-box, lease-based concept with no real estate purchase in the typical deal, so the loan is mostly about build-out, opening costs and working capital rather than land. Second, the franchisor describes the business as manager-run but not absentee: a salon manager handles daily operations, while the owner stays consistently involved in hiring, coaching and growth. That appeals to buyers who keep their current job at first, but lenders will look hard at the management plan. Our article on financing a manager-run franchise covers how lenders approach owners who are not behind the chair themselves.
Training matters too. The company says Great Clips University offers more than 300 courses available around the clock, which helps answer the question every salon underwriter asks: who will cut the hair, and will they stay?
Great Clips Franchise Costs
The Great Clips franchise website publishes a US investment chart. The franchisor says the range covers construction, grand opening marketing and working capital. Here is how the pieces fit together.
Initial franchise fee
The investment chart lists the franchise fee at $20,000 to $35,000, while the company’s FAQ describes it as $20,000, with a $5,000 contribution to the Market Development Advertising Fund (MDAF) due with each franchise agreement. Because the two figures differ, confirm in Item 5 of the current FDD which fee applies to your market and agreement. These fees are generally paid when the franchise agreement is signed, often before a lender has closed on the build-out loan, so many buyers fund them from their own liquidity and count them toward their equity injection.
Leasehold improvements and site fees
The largest line in the chart is leasehold improvements and site fees, estimated at $119,800 to $289,400. This is the cost of turning a retail shell into a branded salon, from plumbing for shampoo areas to electrical, lighting and finishes, plus site-related fees. The range reflects local construction costs, landlord tenant-improvement allowances and the condition of the space. A generous allowance can reduce what you borrow, so negotiate the lease and the loan request together.
Equipment, fixtures and salon technology
The US summary chart does not break out styling stations, chairs, shampoo bowls, signage or salon technology as their own lines, so review the full Item 7 table to see where those costs sit. They are real costs either way, and they are the kind of long-lived, identifiable assets that some lenders will finance on their own or fold into a larger loan. More on equipment below.
Opening costs and working capital
The chart estimates grand opening advertising at $20,000 to $25,000 and additional funds for the first three to six months at $20,000 to $60,000. Training, travel and living expenses are listed at $1,500 to $2,500 per participant, and insurance at $1,500 to $3,000. The additional funds line is the cushion that pays stylists, rent and supplies while the client base builds, and lenders pay close attention to whether it is fully funded.
Total investment
Great Clips’ US investment chart lists these line items:
- Franchise fee: $20,000 to $35,000
- Initial ad fund contribution: $5,000
- Leasehold improvements and site fees: $119,800 to $289,400
- Additional funds for three to six months: $20,000 to $60,000
- Grand opening advertising: $20,000 to $25,000
- Training, travel and living expenses (per participant): $1,500 to $2,500
- Insurance: $1,500 to $3,000
- Total estimated initial investment: $187,800 to $419,900
Canadian salons follow a separate chart and disclosure documents.
Ongoing Fees and How They Affect Your Loan
After opening, Great Clips’ FAQ lists a royalty of 6% of gross sales. Item 6 of the FDD also describes any ongoing advertising contributions, technology charges, transfer and renewal fees and other recurring costs; the FAQ mentions national advertising but does not state an ongoing advertising percentage, so take that figure from the current FDD before you build projections.
Why this matters for a Great Clips franchise loan: royalties and advertising contributions come off gross sales before the owner pays stylists, rent or debt service, and lenders size the loan on cash flow after those fees. In a labor-heavy salon, a realistic projection subtracts every franchise fee first, then tests whether the remaining cash covers the proposed payment with room to spare.
Plan, too, for refresh costs over the 10-year term. Brand standards evolve, and the franchise agreement and FDD describe what updates to finishes, fixtures or technology can be required.
Franchisor Requirements for New Owners
Great Clips publishes clear financial thresholds. According to its franchise website, candidates generally need a minimum net worth of $500,000 and liquid assets of at least $100,000. In high-cost markets, the requirements rise to $1,000,000 in net worth and $250,000 in liquid assets. The company also lists a credit score of at least 675, a clean background and criminal record, and living in an open geographic market.
The residency point is unusual and worth noticing. Great Clips says that living in the same market where you plan to develop is crucial, and it defines its markets using standard media market areas. Some markets have only certain regions open for new development. A lender will want to see that your territory is actually available and that you live close enough to oversee the salon.
Prior salon experience is not required; the franchisor says its owners come from many professional backgrounds. What it does emphasize is consistent owner engagement and being well capitalized. The approval process starts with an inquiry and application through the franchise website, followed by conversations and review of the FDD before an agreement is signed.
Ways to Own a Great Clips
Opening a new salon. A new salon starts with an approved market, a site the franchisor accepts and a lease. Financing a new unit is a start-up loan: the lender relies on the franchise system, the budget, the location and your finances rather than an operating history. Our page on franchise start-up financing explains how lenders approach new units.
Buying an existing salon. Existing Great Clips salons change hands as owners retire, consolidate or sell part of a portfolio. A resale brings customer counts, a trained stylist team and tax returns a lender can underwrite. The franchisor must approve the transfer, and the landlord usually must consent to assigning the lease. See our page on franchise acquisition financing for how purchase loans are structured, and our guide to what drives price in a franchise resale for how sellers and lenders arrive at value.
Growing into multiple salons. Great Clips says its average franchisee owns five to six salons after five years, yet it is comfortable with, and often prefers, owners starting with one. Later units may be new builds, purchases of nearby salons or a mix. Financing a second or third salon looks different from the first, because the lender can lean on your track record.
Conversions. Great Clips does not publish a program for converting an independent salon to the brand, so buyers should plan around a new build-out or the purchase of an existing Great Clips salon.
Financing Options for a Great Clips Franchise
SBA 7(a) loans
For many first-time owners, an SBA 7(a) loan is the most flexible fit. A single 7(a) loan may cover leasehold improvements, fixtures, the franchise fee, opening costs and working capital, or the purchase price of an existing salon plus transition costs. Because Great Clips is a lease-based concept, the loan is usually secured by business assets and personal guarantees rather than real estate, and lenders may also look at personal assets as additional collateral, subject to program rules.
SBA 504 loans
SBA 504 loans are built for owner-occupied real estate and long-lived fixed assets. Most Great Clips owners lease their space, so 504 financing rarely fits a single salon. It may become relevant for an owner who buys a small retail building or condo unit and occupies most of it, or for significant long-lived fixed assets, depending on program rules and lender approval.
Conventional term loans
Experienced multi-unit owners with strong cash flow and liquidity may use conventional business loans for new salons or acquisitions. Terms vary widely, so compare the full structure rather than the rate alone.
Equipment financing
Styling stations, hydraulic chairs, shampoo bowls and backbar units, signage, point-of-sale and check-in hardware, washers and dryers for towels, and retail displays are tangible assets that can sometimes be financed separately from the main loan. Separating equipment can preserve room on the primary loan for leasehold improvements and working capital. Learn more about franchise equipment financing and leasing.
Working capital and lines of credit
A new salon often runs below its eventual pace while the neighborhood discovers it, and stylist payroll does not wait. Demand can also swing around holidays and school calendars. A line of credit or working capital loan can bridge those gaps and fund hiring ahead of growth. See our page on franchise business working capital.
Seller financing on resales
When buying an existing salon, a seller may agree to carry part of the price as a note. Seller notes are typically subordinate to the primary loan, and SBA program rules and individual lenders may limit how a seller note is structured, including whether it can count toward your equity. Raise the idea early so the lender can tell you what will work.
SBA Loans for Great Clips Franchisees
SBA lending to franchisees runs through banks and other approved lenders; the SBA guarantees a portion of the loan rather than lending directly. For franchise borrowers, the lender must confirm that the brand is eligible, and the SBA Franchise Directory is how that check is done. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
Great Clips is listed on the SBA Franchise Directory as “Great Clips,” code S0743, with no special notes attached to the listing. In plain English, the brand’s franchise agreement has been reviewed for SBA lending, and there is no added condition for a lender to resolve before using it. A listing does not approve any borrower or guarantee a loan; you still need to qualify on credit, equity, experience and cash flow.
A few tips help SBA applications for salons move smoothly:
- Give the lender the signed or near-final franchise agreement and the current FDD early
- Bring a lease or letter of intent, along with the landlord’s tenant improvement allowance and any contractor estimates for the build-out
- Show the source of your equity injection with bank statements, and avoid moving large sums without a paper trail
- Present a staffing plan that names, or describes how you will hire, the salon manager
Our SBA loan calculator can help you estimate payments while planning. Estimates are for planning only and are not an offer or approval.
How Lenders Evaluate a Great Clips Deal
Personal credit and financial history
Lenders review personal credit, tax returns and a personal financial statement for each guarantor. The franchisor and the lender look at the same history, so explain any blemishes up front.
Net worth and liquidity
The franchisor’s thresholds set a floor, but a lender also looks at how much cash remains after your equity injection. Meeting the minimums with little reserve left may prompt a request for more cash or a guarantor.
Industry and management experience
Great Clips does not require salon experience, so lenders focus on transferable skills: hiring, scheduling, coaching hourly staff and reading financial statements. If you keep a job at first, expect questions about who runs the salon day to day.
Business plan and projections
Credible projections for a Great Clips salon start with realistic assumptions about customer counts, average ticket, stylist hours and wages, the ramp-up period and percentage-of-sales fees, plus a plan for a slower ramp than expected. If the current FDD includes an Item 19 financial performance representation, a lender may compare your projections against it.
The FDD and franchise agreement
Lenders look at the franchise term, renewal rights, transfer provisions in Item 17, territorial protection and fees. Great Clips says a salon typically has a protected radius of 3/4 of a mile, depending on market density. The company’s FAQ confirms a 10-year term, and Item 10 is where any franchisor financing would be disclosed.
Site and lease
For a lease-based concept, the lease is nearly as important as the loan. Lenders look at rent and increases, a term and renewal options that line up with the franchise and loan terms, the tenant improvement allowance and assignment rights.
Historical financials for a resale
When you buy an existing salon, the lender underwrites its tax returns, monthly sales trends, customer counts, payroll as a share of sales, stylist turnover and the condition of the finishes. A salon with a stable manager reads stronger than one where the seller covers shifts personally.
Salon Build-Out, Equipment and Staffing: What Makes Great Clips Different
A Great Clips salon has no commercial kitchen and little heavy machinery. Most of the capital goes into the build-out of a small leased space and into the people who work there, which changes the financing conversation in three ways.
First, leasehold improvements stay with the building, so lenders treat them as weaker collateral than resalable equipment. That is one reason guarantees, adequate equity and a solid lease carry so much weight.
Second, when stations, chairs, shampoo areas and technology are financed separately, their useful life should roughly match the financing term so you are not still paying for a chair after replacing it.
Third, staffing is the operating engine. Wages for licensed stylists and a salon manager are the largest ongoing cost, so lenders want a hiring plan, realistic local wage assumptions and enough working capital to carry the team through the first months.
Multi-Unit Growth and Development Agreements
Great Clips’ growth pattern, with owners building to several salons over time, makes multi-unit financing an important topic even for first-time buyers. A second salon is often financed on the strength of the first salon’s results, and lenders will look at combined cash flow across all units as well as each salon individually, so one strong location cannot mask a weak one.
If you sign up to develop several salons in your market, map the timing of each opening against your liquidity. Each new salon needs its own build-out, grand opening campaign and working capital cushion, and the first salon must be stable enough to support the next. Some owners finance each unit separately as it opens; others work with a lender on a plan for the whole schedule. Our guide to multi-unit franchise financing walks through the options.
Buying nearby salons from retiring owners is another growth route; those acquisitions come with history a lender can underwrite.
Real-World Scenarios
A corporate manager opening a first salon. A professional with no salon background meets the franchisor’s thresholds and keeps her job while a hired manager runs daily operations. Her SBA 7(a) request bundles the build-out, opening costs and working capital, backed by a detailed recruiting plan.
An existing owner buying a neighbor’s salon. An owner with two salons learns that a nearby franchisee is retiring. The seller’s tax returns support the price, the franchisor approves the transfer and the landlord consents to assign the lease. The buyer finances the purchase with a term loan and asks the seller to carry a small subordinate note.
A couple building toward several salons. A married couple opens one salon, then plans two more in the same market. They finance chairs and stations for the second salon separately to keep the primary loan focused on build-out and working capital, and they time the third opening to begin only after the second salon reaches steady staffing.
A buyer in a high-cost market. A buyer subject to the franchisor’s higher thresholds budgets for higher rent and wages, negotiates a larger tenant improvement allowance to reduce the loan and keeps reserves beyond the minimum.
Common Mistakes to Avoid
- Treating the franchisor’s minimum liquidity as the whole budget, without reserves left after the equity injection
- Signing a lease before confirming that the term, renewal options and assignment rights work for the lender
- Underestimating how long it takes to hire and keep licensed stylists, and how wages affect cash flow
- Building projections on gross sales without subtracting the royalty and advertising contributions first
- Assuming a seller note will be accepted without confirming lender and program rules
- Opening a second salon before the first has stable staffing and steady results
For a deeper look, read about the franchise loan mistakes that cost owners the most.
Next Steps to Finance Your Great Clips Franchise
Step 1: Confirm your market and fit. Check that your area is open for development and that you meet the franchisor’s net worth, liquidity and credit thresholds for your market.
Step 2: Review the FDD with an attorney. Focus on Items 5, 6 and 7 for fees and costs, Item 17 for term and transfer, and Item 19 if it is included.
Step 3: Build a full budget. Start with the Item 7 ranges, add your local rent, build-out quotes and wage assumptions, and include a contingency.
Step 4: Talk with a financing specialist. Before signing a lease or purchase agreement, learn which loan structures fit and how much equity you will need.
Step 5: Line up the site and lease. Negotiate the tenant improvement allowance, term and assignment language with the loan in mind.
Step 6: Assemble your application. Gather tax returns, a personal financial statement, proof of equity, the franchise agreement, the lease or letter of intent, contractor bids and your business plan.
Step 7: Close and open. Coordinate loan closing, construction draws, hiring and grand opening marketing so the salon opens with staff trained and working capital in place.
Great Clips Franchise Loan FAQs
How much does it cost to open a Great Clips?
Great Clips’ US investment chart estimates a total initial investment of $187,800 to $419,900, covering the franchise fee, ad fund contribution, leasehold improvements and site fees, grand opening advertising, training, insurance and three to six months of additional funds.
What is the Great Clips franchise fee?
The company’s FAQ describes the franchise fee as $20,000, with a $5,000 Market Development Advertising Fund contribution per franchise agreement. The investment chart shows a franchise fee range of $20,000 to $35,000, so confirm the fee for your market in the current FDD.
What royalty does Great Clips charge?
According to the franchisor’s FAQ, the royalty is 6% of gross sales. Review Item 6 of the FDD for advertising contributions and other ongoing fees.
How much liquid capital and net worth do I need?
Great Clips lists a minimum net worth of $500,000 and liquid assets of at least $100,000 in most markets, rising to $1,000,000 and $250,000 in high-cost markets.
Is Great Clips eligible for SBA loans?
Great Clips is listed on the SBA Franchise Directory under code S0743 with no special notes, so its franchise agreement has been reviewed for SBA lending. Each borrower must still qualify, and every loan is subject to lender approval.
Does Great Clips offer financing?
No. Great Clips states that it does not provide financing, though it says it has relationships with third-party vendors that can help franchisees access funding. Check Item 10 of the FDD for the formal disclosure.
Can I get a Great Clips franchise loan with no salon experience?
Possibly. The franchisor does not require salon experience, and lenders often accept transferable management experience along with a strong plan for hiring a salon manager and stylists.
Can I buy an existing Great Clips salon instead of opening one?
Yes, when an owner is selling and the franchisor approves the transfer. Lenders generally underwrite the salon’s historical results, and the landlord usually needs to consent to the lease assignment.
How long is the Great Clips franchise term?
The company’s FAQ lists a term of 10 years. Review Item 17 of the FDD for renewal and transfer conditions.
Can I finance more than one Great Clips salon?
Yes. The franchisor reports that its average franchisee owns five to six salons after five years. Additional units are usually financed based on the performance of your existing salons, your liquidity and lender review.
Final Thoughts
A Great Clips salon is a small-footprint, lease-based franchise with published investment ranges, clear candidate requirements and an SBA Franchise Directory listing with no added conditions. Those features can make a well-prepared Great Clips franchise loan request straightforward, but the deals that close smoothly are the ones with a strong lease, a real staffing plan and enough working capital to carry the salon until regulars fill the chairs.
US Professional Funding helps franchise buyers and owners finance new units, acquisitions, equipment and working capital. Learn more about our franchise financing options.
