Great Clips Successfully Pivoted During the Pandemic. Now, It’s On Track for a Successful Year of Franchise Growth.

After a year of lockdowns, shutdowns and curfews, Great Clips, the world’s largest hair salon brand with nearly 4,400 locations throughout 180 markets in the U.S. and Canada, is back in a growth mindset in 2021. 

The brand was immediately impacted by the COVID-19 pandemic in 2020; on March 4 of last year, it had 4,501 open salons, but just a month later, only 17 were open. As a brand known for its dedication to its franchisees, Great Clips navigated the pandemic by doubling down on its franchisee support structure by temporarily reducing or removing some fees, investing in targeted marketing efforts, ramping up regular communications with franchisees through different channels and more.

“As the franchisor, our primary goal is to support franchisees in key aspects of their business, and they, in turn, depend on the survival of Great Clips, Inc. and the Great Clips brand for their livelihood, as do the 40,000 stylists they employ,” said CEO Steve Hockett. “We’ve worked closely with our franchisees over the last year to take viable, reasonable steps to ensure the viability of their businesses and the overall brand.”

How 2020 Impacted the Hair Care Industry

The COVID-19 pandemic significantly impacted the salon industry as a whole due to mandated closures in most of the U.S. and Canada. Hair salons, however, were well-prepared for a pandemic environment because of the strict licensing requirements they must meet.

“It wasn’t new this past year for salon professionals to have an intense focus and understanding of their personal health and safety and that of their customers,” said Beth Nilssen, director of franchise development for the brand. “All hair salons and all licensed hair professionals in the U.S. and Canada have been extensively trained and have deep experience in delivering safety and sanitization as an important aspect of their jobs for decades. This decades-long platform of strong cleaning and sanitization practices continues to help ensure that Great Clips and our industry endure.”

How Great Clips Persevered Through COVID-19

When Great Clips began experiencing salon closures in 2020, it decided to take action, not only for its franchisees but also for its customers.

The brand’s GreatCare Promise™ initiative, for example, took steps towards helping customers and salon staff feel as safe and comfortable as possible. Launched in August 2020, it included a mask requirement for all franchisee-owned Great Clips salons.

Additionally, Great Clips invested in customer-facing technology by introducing ReadyNextTM text alerts in the summer of 2020. As a part of the Online Check-In® process, customers can sign up to receive notification texts once their estimated wait time reaches 15 minutes, so they can head to the salon. 

How Great Clips Will Thrive in 2021

Now, with a goal of maintaining itself as the leader in the hair salon industry, Great Clips will remain dedicated to its franchisees, further invest in its technology strategy and expand its presence into more markets.

“All day, every day, we focus on working together with our nearly 1,200 franchisees,” said Nilssen. “And while our core business is delivering great haircuts, we will continue to innovate around the core with technology features to enhance the customer experience and better deliver our brand.”

The pandemic didn’t stop the brand’s expansion plans, either. Great Clips is always seeking opportunities for salon unit growth across the U.S. and Canada.

“Great Clips has always been strong in the heartland markets,” said Hockett. “Our biggest opportunities available for expanded presence are in markets in California, the Gulf Coast, the Northeast and across Canada.”

Why Great Clips Franchisees Continued to Invest in the Brand During the Pandemic

Despite COVID-related lockdowns and closures, many Great Clips franchisees saw the pandemic as an opportunity to further invest in the brand.

Great Clips’ largest franchisee Clara Osterhage, who recently opened her 81st salon during the pandemic, didn’t let the economic uncertainty of last year slow her down. As a 25-year franchising veteran, she had already seen the brand thrive in trying times.

“After 25 years in business, I’ve seen the economy from all sides,” she said. “This time, it [was] about having faith, believing in ourselves and planning to come back just as strong as we were.”

Multi-unit franchisee Mike Martin says he felt empowered by the brand to stay the course in 2020. Instead of playing it safe, he opened three additional salons. He knew he was going to get all the support and training he needed from a professional, flexible franchisor who understood his needs. 

“Great Clips is a tremendous franchisor,” said Martin. “They give you all the tools that you need to be a successful franchisee. They’ll do whatever they can for you and help you out in any way possible. The support from Great Clips and my own experience made me confident that, yes, opening a new salon in the pandemic is going to be hard for probably a year, but the pandemic is going to end at some point. It’s going to get better. There’s going to be more certainty and more confidence in the future, so let’s get started so that we’re positioned to benefit from people having higher confidence of being out and getting their hair cut in the near future. I’ll be positioned to take advantage of this demand and already have the hard work behind me when the pandemic is over.”

Start-Up Costs and Fees

The total investment to open a Great Clips salon ranges from $146,750 to $302,400 in the U.S.

The cost of a single franchise agreement is $25,000, royalties are 6% of gross sales and ongoing advertising fees are 5% of gross sales. 

Franchisees are required to have a net worth of at least $300,000 (in most markets) and a minimum of $75,000 in liquid funds (select markets have increased requirements of up to $1,000,000 net worth and $250,000 in liquid funds to qualify).