Sport Clips FDD Item 19 is the section of the Franchise Disclosure Document that contains Financial Performance Representations. This is the section that most prospective franchisees turn to first, because it is the closest thing to an answer to the fundamental question: how much money will I make if I buy a Sport Clips franchise? At Lopes Law LLC, we review Item 19 data regularly for prospective franchisees, and our analysis goes well beyond the headline numbers to help clients understand what the data actually means for their specific investment decision.

This guide explains what Sport Clips discloses in Item 19, how to interpret the financial performance data, what the numbers do and do not tell you about potential profitability, and how to use Item 19 data in conjunction with other FDD sections to make an informed investment decision. With total investment ranging from $289,000 to $475,000 and 1,754 locations in the system, understanding the financial performance data is essential to evaluating whether this franchise will deliver the return you need.

What Is FDD Item 19 and Why Does It Matter for Sport Clips?

Item 19 of the Franchise Disclosure Document is titled “Financial Performance Representations.” Under the FTC Franchise Rule (16 C.F.R. Part 436), franchisors are not required to include an Item 19 in their FDD. However, if a franchisor chooses to include financial performance data, the information must have a reasonable basis and the FDD must disclose the underlying assumptions.

For Sport Clips specifically, Sport Clips reported average sales of $419,485 and median sales of $409,206 across 1,669 franchised stores for calendar year 2024. Of these, 788 stores exceeded the average while 881 fell below it. The system had 1,754 total franchised stores at year-end 2024, excluding 83 company-owned locations. Top-quartile locations generated significantly higher revenue, while the bottom quartile generated under $300,000 in gross sales.

Many prospective franchisees treat Item 19 as a projection of what they will earn. It is not. Item 19 is a disclosure of historical performance by existing franchise locations. Your actual performance will depend on your location, your market, your management, your capitalization, and dozens of other variables that the historical data does not and cannot account for. Understanding this distinction is critical to using Item 19 data properly.

What Financial Data Does Sport Clips Disclose in Item 19?

Sport Clips’s Item 19 includes the following key data points for franchise locations meeting the reporting criteria:

The data is drawn from 1,669 reporting franchise locations, providing a substantial sample size for analysis.

Average Revenue Analysis

Sport Clips’s average gross revenue of $419,485 provides a useful starting point for financial analysis, but it requires careful interpretation. The average includes both top-performing and underperforming locations. If the system has a wide distribution of performance, the average may not be representative of what a typical location generates.

At Lopes Law LLC, we always ask: what percentage of Sport Clips locations actually achieve or exceed the reported average? If less than half of locations exceed the average (which is common when a few high-performing locations skew the average upward), then the average overstates the likely experience of a new franchisee. This is why the median, when disclosed, is often a more useful benchmark.

The median revenue for Sport Clips franchise locations is $409,206. The median is arguably a more useful figure than the average because it is not skewed by outlier locations. If the median is lower than the average, it means a small number of high-performing locations are pulling the average up. This is a common pattern in franchise systems, and it means that a typical Sport Clips franchisee is more likely to experience performance closer to the median than to the average.

How Should Sport Clips Franchisees Use Item 19 Data?

The most effective way to use Item 19 data is in conjunction with other sections of the FDD. Here is the framework we use at Lopes Law LLC when reviewing Sport Clips FDDs:

Step 1: Understand the Revenue Range

Look beyond the average and understand the full range of performance. What are the top-quartile locations generating? What about the bottom quartile? If Sport Clips’s Item 19 breaks down performance by quintile, quartile, or other segmentation, use those breakdowns to model best-case, moderate, and conservative scenarios.

Step 2: Apply Item 6 Fees

Take the revenue data from Item 19 and subtract the ongoing fees disclosed in Item 6. The royalty (6%), advertising contribution (5%), technology fees, and other Item 6 obligations reduce your gross revenue to a net revenue figure that more accurately reflects what is available for operating expenses and owner profit.

Step 3: Estimate Operating Expenses

The hair salon sector has typical operating expense ratios that can be applied to Sport Clips’s revenue data. Labor, rent (if not included in Item 6 fees), cost of goods sold, utilities, and other operating expenses typically consume 60% to 80% of gross revenue, depending on the specific business model. Apply these estimates to the post-fee revenue figure from Step 2.

Step 4: Calculate Owner Cash Flow

After subtracting Item 6 fees and estimated operating expenses from the revenue, the remaining amount is the pre-tax owner cash flow. Compare this figure to the total investment ($289,000 to $475,000) to calculate a return on investment. At Lopes Law LLC, we present this analysis at three scenarios: optimistic (top-quartile performance), moderate (average performance), and conservative (bottom-quartile performance).

What Does Sport Clips Item 19 NOT Tell You?

Understanding what Item 19 does not disclose is as important as understanding what it does disclose. Common gaps in Item 19 data include:

• Location-specific performance: Item 19 provides aggregate data. It does not tell you how a specific location in a specific market will perform.
• New location ramp-up: The data typically reflects mature locations. New locations may take 12 to 36 months to reach comparable performance levels, during which time the franchisee incurs full expenses with below-average revenue.
• Owner compensation: If the performance data includes an owner-operator’s salary as an expense, the reported profitability is after owner compensation. If it does not, you need to subtract a reasonable salary to understand the true return on investment.
• Debt service: Item 19 data does not account for the franchisee’s financing costs. If you borrow to fund the initial investment, your actual cash flow will be reduced by loan payments.
• Capital expenditure reserves: The data typically does not include reserves for equipment replacement, facility maintenance, or the mandated renovations that may be required at renewal.

A Client Scenario: When Item 19 Data Changed the Investment Decision

A prospective Sport Clips franchisee engaged Lopes Law LLC to review the FDD before committing to the franchise. The buyer was attracted to the reported average revenue of $419,485 and had calculated a projected return on investment based on that figure.

During our review, we identified several factors that changed the analysis. First, the average revenue included locations that had been operating for 10+ years with established customer bases. The buyer’s location would be new, with no existing customer base and a likely ramp-up period of 18 to 24 months. Second, when we applied the Item 6 fee burden (royalty of 6%, advertising of 5%, plus technology and other fees), the net revenue available for operating expenses was significantly lower than the buyer had modeled.

Third, the buyer had not accounted for the cost of financing the initial investment. With a total investment of $289,000 to $475,000 and 70% financed through an SBA loan, the annual debt service reduced the projected owner cash flow by approximately $40,000 to $60,000. When we combined the realistic ramp-up timeline, the full Item 6 fee burden, and the financing costs, the projected owner cash flow in years one and two was less than half of what the buyer had originally projected based on the headline Item 19 average.

The buyer ultimately decided to proceed but adjusted expectations for the first two years and secured additional working capital to cover the ramp-up period. This informed decision, based on a realistic analysis of Item 19 data in context, is exactly the kind of outcome our FDD validation review is designed to produce.

How Does Sport Clips’s Financial Performance Compare to Other Hair Salon Franchises?

When evaluating Sport Clips’s Item 19 data, it is useful to benchmark against comparable franchises in the hair salon sector. Key comparison points include average and median revenue, the ratio of EBITDA to revenue (the operating margin), the total investment required relative to the projected return, and the distribution of performance across the system (how wide is the gap between top performers and bottom performers?).

At Lopes Law LLC, when we review FDDs for clients considering Sport Clips alongside competing franchise opportunities, we build a side-by-side comparison that normalizes the financial performance data. This means adjusting for differences in fee structures, investment levels, and reporting methodologies so clients can make apples-to-apples comparisons between franchise systems.

How Sport Clips Item 19 Data Relates to Franchise Resale Value

Item 19 data does not just affect your initial investment decision. It also affects the resale value of your franchise when you eventually sell. Buyers of existing franchise locations use Item 19 data, along with your actual financial performance, to determine what they are willing to pay. If the system’s financial performance metrics are declining, the resale market for Sport Clips franchises may soften, reducing the value of your investment at the time of exit.

Conversely, if Sport Clips’s system-wide financial performance is improving, franchises in the system tend to command higher resale values. This is why monitoring Item 19 data year over year is important for existing franchisees planning a future sale. The FDD is updated annually, and comparing Item 19 data across multiple years can reveal trends in system performance that affect franchise valuation.

At Lopes Law LLC, we advise both buyers and sellers of Sport Clips franchises. For buyers, we analyze Item 19 data to validate the seller’s asking price. For sellers, we help position the franchise’s financial performance relative to the system average to support the highest defensible valuation. In both cases, understanding how to properly interpret and present Item 19 data is essential to achieving a fair transaction.

The Ramp-Up Period: What Sport Clips Item 19 Does Not Show New Franchisees

One of the most significant gaps in any Item 19 disclosure is the ramp-up period for new locations. Sport Clips’s reported average revenue of $419,485 is based on locations that have been operating for a period defined in the FDD’s reporting criteria. A brand-new Sport Clips location will not generate system-average revenue on day one. The ramp-up to steady-state performance typically takes 12 to 36 months, depending on the market, the location, and the franchisee’s execution.

During the ramp-up period, the franchisee incurs full operating expenses (rent, labor, supplies, insurance, technology fees, royalties, and advertising contributions) while generating below-average revenue. The cash flow gap during this period can be substantial, and it must be funded either from the franchisee’s reserves or from additional borrowing. Many franchisees who encounter financial difficulty in their first or second year are not underperformers in any absolute sense; they simply did not adequately plan for the ramp-up period.

At Lopes Law LLC, we always model the ramp-up period for new-location clients. We typically assume 50% to 60% of system-average revenue in month one, ramping to 70% to 80% by month six, and reaching system-average levels between months 18 and 30. These assumptions vary by sector and brand, but they provide a more realistic picture of first-year and second-year cash flow than applying the full system average from day one.

Using Item 19 to Compare Sport Clips Against Competing Franchise Opportunities

Many prospective franchisees evaluate multiple franchise systems before making a commitment. Item 19 data provides a basis for financial comparison, but comparing across systems requires normalization because different franchisors present their data differently.

Some Item 19 disclosures include only revenue data, while others include expense breakdowns, EBITDA, or other profitability metrics. Some exclude underperforming or recently opened locations, while others include the full system. Some report averages, while others report medians or quartile breakdowns. These differences make direct comparison challenging without adjustment.

At Lopes Law LLC, when we review multiple FDDs for a client comparing franchise opportunities, we normalize the data by adjusting for fee structure differences, investment level differences, and reporting methodology differences. This allows clients to make genuine apples-to-apples comparisons rather than being misled by differences in how the data is presented. A franchise that reports higher average revenue but charges higher fees and requires a larger investment may actually deliver a lower return on investment than a franchise with lower revenue but lower costs.

What Should Prospective Sport Clips Franchisees Focus on in Item 19?

When reviewing Sport Clips’s FDD Item 19, focus on these specific areas:

• Sample composition: What types of locations are included in the data? Are they all franchised locations, or are company-owned locations included? Company-owned locations may have different economics than franchised locations.
• Performance distribution: If the data is segmented by quartile or performance level, focus on the median and the bottom quartile, not the average. Your downside scenario matters more than your upside scenario for risk management purposes.
• Time period and currency: When was the data collected? If the data reflects performance during a particularly strong or weak economic period, it may not be representative of long-term performance.
• Exclusions: What locations were excluded from the data? Some Item 19 disclosures exclude locations that were open for less than 12 months, locations that closed during the period, or locations with incomplete data. These exclusions can make the reported performance look better than the full system’s performance.
• Cost data: Does Item 19 include any expense or profitability data, or only revenue? Revenue without cost data tells you nothing about profitability.
• Footnotes and assumptions: Read every footnote. The assumptions underlying the data are often as important as the data itself.

Why Legal Review of Sport Clips Item 19 Is Essential

Item 19 data is the foundation of your financial projections, and misinterpreting this data can lead to a materially flawed investment decision. A franchise attorney can analyze the data methodology to identify potential biases or limitations, integrate the Item 19 data with the fee structure in Item 6 to calculate realistic net revenue, model the financial impact of the ramp-up period for a new location, and compare the financial performance to competing franchise systems on a normalized basis.

At Lopes Law LLC, we review Sport Clips FDDs regularly. Our flat-fee FDD validation review is $3,000 and covers all 23 items, with particular attention to the financial performance data in Item 19 and its interaction with the fee structure in Item 6. For a complete overview of what that process involves, see our guide on what to expect from an FDD review. For concerns about franchise agreement terms, read our guide on franchise agreement red flags.

Frequently Asked Questions About Sport Clips FDD Item 19

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Last updated: March 12, 2026