Supercuts 2005 Annual Report Download - page 15

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The average initial capital investment required for a new Promenade Salon within this group typically ranges from $65,000 to
$85,000, excluding average opening inventory costs of approximately $7,000. Average annual salon revenues in a Promenade Salon
which has been open five years or more are approximately $250,000. During fiscal year 2006, the Company plans to open approximately
90 new Promenade Salons.
Other Franchise Concepts. This group of franchise salons includes primarily First Choice Haircutters, Magicuts, Pro-Cuts and
Haircrafters. These concepts function primarily in the high volume, value-priced hair care market segment, with key selling features of
value, convenience, quality and friendliness, as well as a complete line of professional hair care products. In addition to these franchise
salons, the Company operates company-owned First Choice Haircutters and Magicuts salons, as previously discussed above under
Promenade Salons. During fiscal year 2006, the Company anticipates that franchisees will open approximately 30 new franchise strip
center salons.
International Salons. The Company’s International Salons are comprised of company-owned and franchise salons operating in Europe
primarily under the Jean Louis David, St. Algue, Supercuts, Regis, Trade Secret and Vidal Sassoon concepts. Nearly 80 percent of the 2,018
international salons are franchised under the Jean Louis David and St. Algue concepts. The International Regis, Trade Secret and Supercuts
salons operated in the United Kingdom and are company-owned. These salons offer similar levels of service as the North American salons
previously mentioned. However, the initial capital investment required is typically £100,000 for a Regis Hairstylists salon, £50,000 for a
Supercuts UK salon and £100,000 to £125,000 for an international Trade Secret salon. Average annual salon revenues for a salon which has
been open five years or more typically range from £300,000 to £600,000 in a Regis Hairstylists salon, £150,000 to £
300,000 in a Supercuts UK
salon and £500,000 to £600,000 in an international Trade Secret salon. During fiscal year 2006, the Company plans to open approximately
30 new company-owned international salons, as well as approximately 105 new international franchise salons. Certain International salon
concepts are further described below.
Vidal Sassoon. The Company’
s International Vidal Sassoon salons are located in the United Kingdom and Germany. Vidal Sassoon
is one of the world’s most recognized names in hair fashion and appeals to women and men looking for a prestigious full-service hair
salon. Salons are usually located on prominent highstreet locations and offer a full range of custom hairstyling, cutting, coloring and
permanent wave, as well as hair care products. The initial capital investment required is typically over £250,000. The Company does not
plan to build any new salons in fiscal 2006. For a mature Vidal Sassoon salon, the average annual revenues are typically in excess of
£550,000.
Jean Louis David (JLD). These franchise salons offer full-
service hair care without an appointment. Salons are located in European
cities, with populations of more than 20,000 in town centers, high-traffic areas and shopping centers. Jean Louis David salons are located
in France, Italy, Spain, Poland, Belgium and Switzerland.
St. Algue. This concept represents fashion-forward, full-service franchise salons known for creativity and an emphasis on personal
style. No appointment needed. Salons are located in European cities with populations of more than 20,000 in town centers, high-traffic
areas and shopping centers. Salons are located mainly in France, with some locations in Switzerland, Portugal, Italy, Germany and Poland.
Salon Franchising Program:
General. The Company has various franchising programs supporting its 3,902 franchise salons as of June 30, 2005, consisting mainly of
Supercuts, Cost Cutters, First Choice Haircutters, Magicuts, Haircrafters, Pro Cuts, St. Algue and JLD. These salons have been included in the
discussions regarding salon counts and concepts on the preceding pages.
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