To whom is the construction management services fee paid for a Cost Cutters Family Hair Salon?
Cost_Cutters_Family_Hair_Salon Franchise · 2024 FDDAnswer from 2024 FDD Document
ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
| Type of Expenditure | Type of Expenditure Amount | Method Of | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Payment(8) | ||||
| Initial Franchise Fee(1) | $39,500-$39,500 | Per Agreement | at signing of Franchise Agreement | Cost Cutters See Note (1) |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 30–36)
What This Means (2024 FDD)
According to the 2024 Cost Cutters Family Hair Salon Franchise Disclosure Document, the construction management services fee, which ranges from $5,500 to $7,500, is paid to an independent supplier. This fee is due upon signing the construction management services agreement.
This fee covers the supervision and oversight of the store's construction process by Cost Cutters Family Hair Salon's approved vendor. Paying this fee is mandatory if the franchisee wants Cost Cutters Family Hair Salon's approved vendor to manage the construction or if the franchisee is converting an affiliated branded salon into a Cost Cutters Family Hair Salon.
If a franchisee chooses not to use Cost Cutters Family Hair Salon's approved vendor for construction, they must still use architects and contractors approved by Cost Cutters Family Hair Salon. In this case, they will pay Cost Cutters Family Hair Salon a separate fee of $500-$1,000 for reviewing the construction and design plan, and another fee of $1,500-$3,000 for a post-build review before opening the business. Therefore, it is important to consider whether to use Cost Cutters Family Hair Salon's approved vendor or manage the construction independently, as this decision affects the fees paid and to whom they are paid.