Six ProCuts ‘Zees Settled With Regis, FDD Shows
Supercuts is among the many brands franchised by Regis Corp. of Minneapolis.
Whatever happened to the remaining ProCuts franchisees—six people who owned nine stores and invested more than $3 million into them—who sued Regis Corp., the franchisor of both Supercuts and ProCuts, back in 2015, saying they were owner/operators in a dead system?
They settled with the franchisor for $1.305 million in total, divided into amounts ranging from $115,000 on the low end and $300,000 on the high. Several franchisees also had their remaining lease liabilities assumed by the franchisor, and in return the franchisees released all claims related to the disputes.
That note showed up in Item 3 of the latest Supercuts franchise disclosure documents, which requires the disclosure of litigation, and I include it here to wrap up one item I wrote about before.
Their lawsuit, Ansari vs. Regis, claimed fraud, as detailed in the October 2015 edition of Franchise Times. “Many of them have lost all the money they have and all they can borrow. It’s a sin,” said Michael Dady, of Dady & Gardner in Minneapolis, at the time, about the franchisees he represented in the lawsuit filed in state court. The litigation ended up in arbitration and all claims were settled in March 2017 and April 2017.
The franchisees each claimed that during the franchise sales process Regis made illegal financial performance representations and misrepresented the expected growth of the Pro-Cuts brand in Minnesota and nationally.
In 2011, Regis Corp. was heavily promoting its newest brand, ProCuts Sports, “where men can be men, and look good doing it,” as the slogan went. ProCuts would hit 30 salons in Minneapolis-St. Paul, its headquarters market, by 2013, and 900 salons in the United States and Canada within 10 years, execs predicted at the time, according to the lawsuit filed in August of 2015.
By that time, Regis, also the franchisor of 2,400 Supercuts and more than 740 Cost Cutters that year, appeared to have abandoned the brand, with no franchises being offered in any state in the country.