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Below is an in-depth analysis and side-by-side comparison of Merle Norman Cosmetics vs Hair Cuttery including start-up costs and fees, business experience requirements, training & support and financing options.
Start-Up Costs and Fees |
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Investment | $39,471 - $180,888 | $120,500 - $283,000 |
Franchise Fee | N/A | $15,000 - $25,000 |
Royalty Fee | 0 | 4.5-5% |
Advertising Fee | - | - |
Year Founded | 1931 | 1974 |
Year Franchised | 1989 | 2004 |
Term Of Agreement | Open-ended | 10 years |
Term Of Agreement | Open-ended | 10 years |
Renewal Fee | - | 25% of franchise fee |
Business Experience Requirements |
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Experience | - | - |
Financing Options |
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In-House/3rd Party | In-House/3rd Party | |
Franchise Fees | No/No | No/Yes |
Start-up Costs | No/Yes | No/Yes |
Equipment | Yes/No | No/Yes |
Inventory | Yes/No | No/No |
Receivables | No/No | No/No |
Payroll | No/No | No/No |
Training & Support |
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Training | Field training classes, field visits, advanced home office training and point-of-sale software training Classroom Training: 40 hours Additional Training: Online training | - |
Support | Purchasing Co-ops Newsletter Meetings/Conventions Toll-Free Line Grand Opening Online Support Security/Safety Procedures Field Operations Proprietary Software Franchisee Intranet Platform | - |
Marketing | Co-op Advertising Ad Templates National Media Regional Advertising Social media Email marketing | - |
Operations |
Number of employees needed to run franchised unit: 2 Absentee ownership of franchisee is allowed.
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Expansion Plans |
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US Expansion | Yes | - |
Canada Expansion | No | No |
International Expansion | Yes | No |
Even before she opened her first studio in Santa Monica in 1931, Merle Norman's philosophy of "Try Before You Buy" was being carried out as she offered free samples of her products to neighbors, hoping they'd discover the benefits and return as paying customers. And return they did. Many even opened their own studios and the company now has studios throughout the United States and Canada. Carrying on the Merle Norman tradition, franchisees now offer skin care, from cleansers and toners to sun defense, and a full line of cosmetics.
NO LONGER FRANCHISING
For franchisees that enter into a
Development Agreement for the establishment of multiple SALONS, the initial
franchise fee is as follows:
*
First SALON $25,000
*
Second to Fifth SALON $20,000
*
Sixth or more SALONS $15,000
The fee for the first SALON is paid
to us when you sign the Development Agreement. The fees for the additional
SALONS are paid when you sign the Franchise Agreement for each SALON.
In addition to the initial franchise
fee for each SALON, you must also pay us, when you sign the Development
Agreement, a multiple unit development fee of $5,000 multiplied by the number
of SALONS to be developed under the Development Schedule.
For illustrative purposes only, if
you enter into a Development Agreement for ten SALONS, the initial ''franchise
fee and development fee payable to us at the time you enter into the agreements
will be as follows:
Initial Franchise Fee $25,000
Units Two through Ten $45.000 (9 x $5,000)
Total Fees Due $70.000
Multiple unit franchisees can expect
to have additional capital and operating expenses which single unit franchisees
may or may not incur. For example, we may provide our multi-SALON franchisees a
continuing royalty credit of V2 of one percent. To qualify for this credit you
will likely require an office, training capabilities, multi-unit management and
other support personnel. We have not included these additional costs in the
above projections as they will likely not occur with the opening of your first
SALON, nor are they reasonably estimated due to the uniqueness of each
multi-SALON franchisee''s independent business determinations.
Unless otherwise noted above, all of
the above fees are uniform and none of the above fees are refundable to you.