Supercuts 2003 Annual Report Download - page 23

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Table of Contents
Financial and other information can be accessed in the Investor section of the Company’
s website at www.regiscorp.com. The Company makes
available, free of charge, copies of its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after
filing such material electronically or otherwise furnishing it to the SEC.
Item 2. Properties
The Company’s corporate offices are headquartered in a 170,000 square foot, three building complex in Edina, Minnesota owned by the
Company. As of June 30, 2003, the Company utilizes 135,000 square feet of the available office space and the remainder is either leased to
third parties or available to be leased. Should the Company require additional office space in the future, the Company could remove or relocate
existing tenants at the end of their lease term in order to provide additional administrative office space for its own purposes.
The Company also operates small offices in Toronto, Canada, Coventry, England and Paris, France. These offices are occupied under long-
term leases.
The Company has distribution centers located in Chattanooga, Tennessee and Salt Lake City, Utah. The Chattanooga facility currently utilizes
250,000 square feet while the Salt Lake City facility utilizes 210,000 square feet. The Salt Lake City facility was originally leased, but was
purchased by the Company during the fourth quarter of fiscal 2003. The Salt Lake City facility may be expanded to 290,000 square feet to
accommodate future growth.
The Company operates all of its salon locations under leases or license agreements. Substantially all of its North American locations in regional
malls are operating under leases with an original term of at least ten years. Salons operating within strip centers and Wal-Mart Supercenters
have leases with original terms of at least five years, generally with the ability to renew, at the Company’s option, for an additional five years.
Salons operating within department stores in Canada and Europe operate under license agreements, while freestanding or shopping center
locations in those countries have real property leases comparable to the Company’s domestic locations.
The Company also leases the premises in which certain franchisees operate and has entered into corresponding sublease arrangements with the
franchisees. These leases have a five-year initial term and one or more five-year renewal options. All lease costs are passed through to the
franchisees. Remaining franchisees, who do not enter into sub-lease arrangements with the Company, negotiate and enter into leases on their
own behalf.
None of the Company
’
s salon leases are individually material to the operations of the Company, and the Company expects that it will be able to
renew its leases on satisfactory terms as they expire. See Note 6 of “Notes to Consolidated Financial Statements.”
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