Great Clips FDD Item 19: Financial Performance Representations | What Franchisees Need to Know
What Is FDD Item 19 and Why Does It Matter for Great Clips?
Item 19 of the Franchise Disclosure Document is titled “Financial Performance Representations.” Under the FTC Franchise Rule (16 C.F.R. Part 436), a franchisor is not required to include financial performance data in its FDD. However, if it chooses to make any financial performance claims, those claims must appear in Item 19 and must have a reasonable basis.
For Great Clips, Item 19 matters because it is the only section of the FDD where you can find data about what existing locations actually earn. This data is essential for building a realistic financial model and determining whether the franchise investment can meet your return requirements.
What Financial Data Does Great Clips Disclose in Item 19?
Great Clips provides relatively comprehensive Item 19 data including average and median gross revenues for salons meeting specific criteria (open for full calendar year). The data includes breakdowns of service revenue versus product revenue.
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The average revenue per Great Clips unit is approximately $353,577. Item 19 data based on 4,171 Great Clips salons eligible and open during the entire 2023 calendar year.
Key metrics disclosed include: Average service sales, average product sales, average total sales, median total sales, high and low total sales.
What the Numbers Mean for Prospective Franchisees
Revenue figures alone do not tell you whether a Great Clips franchise is profitable. To assess profitability, you must subtract all franchise fees (disclosed in Item 6), operating expenses (labor, rent, supplies, insurance, utilities), and the cost of capital invested in the business.
Attorney’s note: Great Clips’ average revenue of approximately $354,000 must be evaluated against the franchise’s fee structure. With a 6% royalty and 5% advertising contribution totaling 11% of gross sales, approximately $38,900 of the average salon’s revenue goes directly to franchise fees. After accounting for rent, labor (stylists are typically paid 40% to 50% of service revenue as commissions), supplies, and other operating costs, the net income available to the franchisee on average revenue can be modest. The median figure is more informative than the average for planning purposes. At Lopes Law LLC, we always build three-scenario financial models when reviewing Item 19 data: optimistic, realistic, and conservative. Your financial plan must work at the conservative level.
What Does Great Clips Item 19 Not Tell You?
Great Clips Item 19 does not include expense data, operating margins, or owner compensation figures. Without this information, prospective franchisees cannot determine profitability from the Item 19 data alone.
Additional information typically absent from Item 19 includes ramp-up period economics (new locations typically underperform system averages for 12 to 24 months), geographic variability (system-wide averages mask significant market-to-market differences), closures and failures (data may exclude locations that closed during the measurement period, creating survivorship bias), and owner compensation (whether disclosed operating margins include or exclude a salary for the owner-operator).
How Should You Interpret Great Clips Item 19 Data?
At Lopes Law LLC, we advise clients to approach Item 19 with a specific analytical framework:
- Look at the median, not just the average. Averages can be skewed by outlier performers. The median tells you what a typical location earns.
- Model three scenarios. Optimistic (75th percentile), realistic (median), and conservative (25th percentile). Your investment must pencil at the conservative level.
- Subtract all Item 6 fees. Calculate net revenue after royalties, advertising, and technology fees to determine what you retain before operating expenses.
- Build your own expense model. Use local market data for labor, rent, insurance, and supplies. Do not rely on national averages.
- Account for the ramp-up period. New locations typically take 12 to 24 months to reach stabilized performance. Budget for below-average revenue during this period.
Why Franchise Validation Is Essential Alongside Item 19
Item 19 provides historical data reported by the franchisor. Franchise validation, the process of contacting existing franchisees to ask about their financial experience, provides essential real-world context. Contact at least 10 to 15 existing operators and ask about revenue trajectory, expense breakdown, ramp-up timeline, and overall satisfaction.
Item 21 of the FDD provides contact information for all current and recently departed franchisees. The franchisees who have left the system are often the most informative. For more on evaluating franchise opportunities, see our guide on franchise agreement red flags.
At Lopes Law LLC, our flat-fee FDD validation review is $3,000 and covers all 23 items, including detailed analysis of Item 19 and guidance on the validation process. For a complete overview, see our guide on what to expect from an FDD review. If you are evaluating an existing franchise, our franchise exit audit provides comprehensive analysis.
Important: The financial figures discussed in this article are based on publicly available FDD information and industry estimates provided for educational purposes. Actual financial performance varies significantly by location, market, and operating conditions. Always review the current FDD with a qualified franchise attorney before making any investment decision.
Frequently Asked Questions About Great Clips FDD Item 19
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Last updated: March 12, 2026
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