Supercuts 2003 Annual Report Download - page 15

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Table of Contents
Mall Locations.
The Company is the largest shopping mall tenant operating hair care salons in North America. Mall owners and developers
typically seek retailers such as Regis due to the Company’s financial strength, successful salon operations and status as a national mall tenant.
In the United States, there are approximately 1,500 enclosed malls which meet the Company’
s size and performance criteria with six to ten new
shopping malls being developed each year. Because the Company’s different salon concepts target different mass-market customer groups,
more than one of the Company’s salon concepts may be located in the same mall. As a result, there are numerous leasing opportunities in
shopping malls for its Regis Salons, MasterCuts, Trade Secret and Mia & Maxx Hair Studio salons.
The Company generally locates its mall based salons in fully enclosed, climate-
controlled shopping centers having 400,000 or more square feet
of leasable area and at least two full-line department store or mass merchant anchor tenants. For existing malls, the Company evaluates the
current sales per square foot of selected tenants, the stature and strength of the anchor stores and the other major tenants, the location and traffic
patterns within the mall, and the proximity of competitors. In addition, the Company may conduct site surveys and physical observations to
assess the location, traffic patterns and competitive environment.
Several trends have enabled the Company to continue to lease high-profile space in existing malls. Leasing velocity and turnover have
increased providing the Company with appropriate leasing opportunities. Also, many existing malls are being expanded, renovated and
remerchandised. Because of these factors, the Company believes that it has sufficient expansion opportunities and therefore can be selective in
establishing new mall locations.
Franchising Program
General
The Company has various franchising programs supporting its 4,054 franchised salons as of June 30, 2003, consisting mainly of Supercuts,
Cost Cutters, First Choice Haircutters, Magicuts, Haircrafters, Pro-Cuts and franchisees operating under the Company’s European franchising
operations.
The Company provides its franchisees with a comprehensive system of business training, stylist education, site approval and lease negotiation,
professional marketing, promotion and advertising programs, and other forms of support designed to help the franchisee build a successful
business.
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