Fantastic Sams Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$169,000 - $301,000
Franchise Fee
$10,000
Total US Locations
565
Business Summary
Fantastic Sams Franchise Corporation grants franchises to own and operate Fantastic Sams haircare salons. Fantastic Sams salons provide a full range of haircare products and services to men, women and children, including cuts, shampoos, styles, perms, and color. These salons are specifically restricted from offering manicure or pedicure services, tanning, body piercing, tattooing, eyelash extensions, or body massage services. Franchisees must ensure their salon is open for business at least six days per week during normal operating hours.
Corporate History
Fantastic Sams Franchise Corporation's brand history dates back to 1974 when the first Fantastic Sams Salon opened, and the company began offering franchises in 1976. The current entity, Fantastic Sams Franchise Corporation, was formed in August 2015 through a consolidation. This involved merging 'Fantastic Sams Salons Corporation,' 'Old FSFC' (another Delaware entity previously known as Fantastic Sams Franchise Corporation), and 'Fantastic Sams Distribution Corporation,' with the current entity being the survivor of this merger. The principal business address for Fantastic Sams Franchise Corporation is located in Maple Grove, Minnesota.
Financial Overview
Investment Range
$169,000 - $301,000
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$30,000
Royalty %
6%
Equipment Costs (Low)
$76,000
Equipment Costs (High)
$165,000
Working Capital
$40,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Fantastic Sams Franchise Corporation's financial statements show a net loss of $1,208,112 in 2022, following a net income of $970,254 in 2021. Despite the net loss, Fantastic Sams Franchise Corporation maintained a strong working capital position in both 2021 and 2022, with current assets significantly exceeding current liabilities. The independent auditors issued an unqualified opinion on the financial statements, indicating no substantial doubt about Fantastic Sams Franchise Corporation's ability to continue as a going concern. Management acknowledges that future operations could be affected by general risks such as significant competition, dependence on key individuals, and market fluctuations.
Financing Details
Fantastic Sams Franchise Corporation does not offer any direct or indirect financing to its franchisees. Fantastic Sams Franchise Corporation also does not guarantee any notes, leases, or other financial obligations for franchisees.
Performance Metrics
Total US Locations
565
Franchised Units
565
Corporate Units
0
Avg Square Footage
1,200
Franchising Since
1976
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
6
Litigation Summary
Fantastic Sams Franchise Corporation's legal history details six past lawsuits, all of which have been resolved and none are currently ongoing. In 2012, Francounsel Group sued the franchisor and its affiliates for an alleged broker's fee, claiming over $5 million. This case was settled in October 2014 for $258,776. Also in 2012, former subfranchisees, Envision Investments and R.U.T. 13, sued for damages exceeding $300,000 each, alleging fraud and breach of contract related to disclosure deficiencies. This case was settled in October 2014 for $296,000 paid by the franchisor's predecessor. In 2017, Fantastic Sams Franchise Corporation initiated an arbitration against Eridon Enterprises, Inc. and Eric Hardaway for closing a salon in default, with counterclaims of alleged misrepresentations about a minority franchise program. This was settled confidentially in July 2017, with the Eridon defendants agreeing to pay $90,000. Another 2017 arbitration involved Fantastic Sams Franchise Corporation suing HopeWorks, LLC, Asha Vasant, and Umar Latif for salon closure, leading to HopeWorks counter-suing in state court over alleged misrepresentations of salon profitability and support. Both actions were settled confidentially in March 2018, with HopeWorks defendants agreeing to pay $50,000. In 2018, Sharon Halter and CMH Ventures One, LLC filed arbitration to challenge a post-expiration noncompetition covenant. This was resolved in October 2018 with a confidential amendment to their franchise agreement, a $25,000 payment to Fantastic Sams Franchise Corporation, and the elimination of certain post-expiration covenants. Finally, in August 2018, Fantastic Sams Franchise Corporation took action against F.S. Salons Sandy Springs, LLC and its guarantors for violating noncompetition covenants, with counterclaims alleging material breaches by the franchisor. This case was settled confidentially in December 2018 for $53,500, including the termination of remaining agreements and waiver of noncompetition covenants.
Bankruptcy History
Fantastic Sams Franchise Corporation has no bankruptcy history to report. Item 4 of the FDD explicitly states that no bankruptcy information is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew a Fantastic Sams franchise, franchisees must provide written notice of their intention to renew at least 180 days before the existing agreement expires. They must be in full compliance with all provisions of their current Franchise Agreement and pay all outstanding monetary obligations owed to Fantastic Sams Franchise Corporation or its affiliates. Franchisees are also required to modernize their salon to reflect the then-current brand image and complete any new or refresher training programs that Fantastic Sams Franchise Corporation reasonably requires. Additionally, they must sign Fantastic Sams Franchise Corporation's then-current form of franchise agreement, which may have materially different terms, including different fees and a potentially reduced or eliminated Protected Area, and sign a general release of claims. A non-refundable renewal fee of $5,000 is also required.
Training & Support Program
Franchisor Assistance
Fantastic Sams Franchise Corporation provides pre-opening assistance to franchisees by offering site selection criteria and approving the chosen salon location. They also help in developing the Grand Opening Marketing Plan and deliver initial training to the franchisee owner and a designated Salon Manager. Franchisees receive access to the confidential Operations Manual, and their salon must be approved for opening by Fantastic Sams Franchise Corporation. After the salon opens, Fantastic Sams Franchise Corporation continues to provide support through additional training sessions, including conventions, seminars, and meetings. They offer operational advice and assistance on various aspects such as approved products and services, marketing programs, purchasing requirements, and establishing administrative systems for bookkeeping, accounting, and inventory control. Fantastic Sams Franchise Corporation also manages the National Advertising Fund (NAF) and Regional Advertising Funds (RAF), and reviews and approves local marketing efforts by franchisees.
Initial Training Hours
56
Training Location
Maple Grove, MN or virtually
Ongoing Support
After opening, Fantastic Sams Franchise Corporation provides ongoing support through additional training programs, which may include conventions, seminars, and meetings for owners, Designated Salon Managers, and other designated employees. They offer operational advice and assistance on various business aspects, including recommended products and services, marketing and sales promotion programs, purchasing requirements, and establishing and administering bookkeeping, accounting, and inventory control systems. Fantastic Sams Franchise Corporation also administers the National Advertising Fund (NAF) and Regional Advertising Funds (RAF) which are utilized for marketing and advertising activities to benefit the system.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
limited
Territory Size Requirements
Fantastic Sams Franchise Corporation designates a limited protected area for each salon. In most areas, this 'Protected Area' is defined as a half-mile radius around the salon's location. However, in certain urban, densely populated areas, franchisees may be assigned a smaller Protected Area.
Staffing Notes
Fantastic Sams Franchise Corporation requires each salon to maintain a Designated Salon Manager, who can be an owner or an employee, and this manager must successfully complete initial training. The franchisor mandates that all employees performing haircare services must be licensed cosmetologists in the state where the salon is located. For franchisees owning six or more Fantastic Sams salons, Fantastic Sams Franchise Corporation may require them to hire a full-time technical educator to train their employees and designate an existing salon as a training center.