Analyst Answer
Most hair salon franchises require $20,000 to $50,000 of working capital inside the total investment, with many lenders wanting additional liquid reserves beyond the franchise fee. Working capital covers payroll, rent, royalties, supplies, and marketing during the 12–24 month ramp before the unit stabilizes. Undercapitalization is a leading cause of franchise stress—even when build-out comes in on budget. Plan for slower-than-forecast bookings in months one through six and keep a cash cushion so you are not forced into expensive short-term borrowing.