What is the range of monthly sublease payments required for a Cost Cutters Family Hair Salon?
Cost_Cutters_Family_Hair_Salon Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee(1) | Amount | Date Due | Remarks |
|---|---|---|---|
| Sublease payments(5) | Amount due under lease which ranges from $2,500 - $9,600 | Monthly at least 10 days before date Cost Cutters or its affiliate must pay rent to landlord | See Note (5) |
| Lease Renewal Fee(6) | $1,500 | Immediately upon execution of the lease renewal | See Note (6) |
| Lease Guaranty Fee(7) | The amount by which twelve percent (12%) of your monthly Gross Revenues exceed your monthly lease payments for as long as such guaranty is in effect. | Monthly | Cost Cutters reserves the right to charge this fee if you request and Cost Cutters agrees to guarantee your lease ob |
Source: Item 6 — OTHER FEES (FDD pages 26–30)
What This Means (2024 FDD)
According to Cost Cutters Family Hair Salon's 2024 Franchise Disclosure Document, franchisees may be required to sublease their store location from Cost Cutters Family Hair Salon or its affiliate. The amount due under the lease ranges from $2,500 to $9,600, payable monthly, at least 10 days before the date Cost Cutters Family Hair Salon or its affiliate must pay rent to the landlord.
In addition to the base sublease payment, Cost Cutters Family Hair Salon also offers the option for franchisees to have Cost Cutters Family Hair Salon guarantee their lease obligations. If a franchisee requests this and Cost Cutters Family Hair Salon agrees, Cost Cutters Family Hair Salon reserves the right to charge a monthly Lease Guaranty Fee. This fee is the amount by which 12% of the franchisee's monthly Gross Revenues exceeds their monthly lease payments, and it remains in effect for as long as the guaranty is in place.
Prospective franchisees should note that the actual sublease payments can vary significantly. It is important to carefully review the lease agreement and consider potential gross revenues to understand the full scope of potential costs, especially if a lease guaranty is involved. Understanding these costs is crucial for assessing the financial viability of a Cost Cutters Family Hair Salon franchise.