Supercuts 2004 Annual Report Download - page 22

Table of Contents
The Company has a customer service training program to improve the interaction between employees and customers. Staff members are trained
in the proper techniques of customer greeting, telephone courtesy and professional behavior through a series of professionally designed video
tapes and instructional seminars.
The Company also provides regulatory compliance training for all its field employees. This training is designed to help supervisors and stylists
understand employee regulatory requirements and compliance with these standards.
Staff Recruiting and Retention:
Recruiting quality managers and stylists is essential to the establishment and operation of successful salons. In search of salon managers, the
Company’s supervisory team recruits or develops and promotes from within those stylists that display initiative and commitment. The
Company has been and believes it will continue to be successful in recruiting capable managers and stylists. The Company believes that its
compensation structure for salon managers and stylists is competitive within the industry. Stylists benefit from the Company’s high-traffic
locations and receive a steady source of new business from walk-in customers. In addition, the Company offers a career path with the
opportunity to move into managerial and training positions within the Company.
Salon Design:
The Company’s salons are designed, built and operated in accordance with uniform standards and practices developed by the Company based
on its experience. Salon fixtures and equipment are generally uniform, allowing the Company to place large orders for these items with
attendant cost savings.
The size of the Company’s salons ranges from 500 to 5,000 square feet, with the typical salon having about 1,200 square feet. At present, the
cost to the Company of constructing and furnishing a new salon, including inventories, normally ranges from approximately $40,000 to
$200,000, depending on the size of the salon and the concept. Less than ten percent of all salons constructed fall within a higher bracket and
will cost between $200,000 and $400,000 to construct. Of the total construction costs, approximately 70 percent of the cost is for leasehold
improvements and the balance is for salon fixtures, equipment and inventories.
The Company maintains its own design and construction department, which designs and supervises the constructing, furnishing and fixturing
of all new company-
owned salons and certain franchise locations. The Company has developed considerable expertise in designing salons. The
design and construction staff focuses on visual appeal, efficient use of space, cost and rapid completion times.
Management Information Systems:
The Company utilizes a point-of-sale (POS) information system in all its company-owned salons which collects data daily from each salon.
The data is consolidated into several management systems maintained at the corporate office. Salon employees deposit cash receipts into a
local bank account on a daily basis. The POS system then sends the amount expected to be deposited to the corporate office, where the amount
is reconciled with local depository balances transferred into a centralized corporate bank account on a daily basis. Point-of-sale information is
also used to generate payroll information, monitor salon performance, and to generate customer data for use in identifying and anticipating
industry trends for purposes of pricing and staffing. The Company has expanded the corporate information systems to deliver on-line
information of product sales to improve its inventory control system, including monthly replenishment recommendations for a salon.
Management believes that its information systems provide advantages in planning and analysis which are generally not available to a majority
of its competitors.
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