Supercuts 2007 Annual Report Download - page 14

Other Franchise Concepts. This group of franchise salons includes primarily First Choice Haircutters, Magicuts and Pro-Cuts.
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 2008, the Company anticipates that franchisees will open approximately 32 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 2,055
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 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 between £105,000 and £115,000 for a Regis Hairstylists
salon, between £50,000 and £55,000 for a Supercuts UK salon and between £125,000 and £135,000 for an international Trade Secret salon.
Average annual salon revenues for a salon which has been open five years or more are approximately £257,000 in a Regis Hairstylists salon,
£183,000 in a Supercuts UK salon and £416,000 in an international Trade Secret salon. During fiscal year 2008, the Company plans to open
approximately 19 new company-owned international salons, as well as approximately 86 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 high-street locations and offer a full range of custom hairstyling, cutting, coloring and
waving, as well as professional hair care products. The initial capital investment required typically ranges between £400,000 and
£500,000. The Company is exploring suitable locations for potential new salons in fiscal year 2008.
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. JLD salons are located in
France, Italy, Spain, Poland, and Switzerland.
St. Algue. This concept represents fashion forward, full service franchise salons known for creativity and an emphasis on personal
style, and focusing on the walk-in customer. 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 and Belgium.
Salon Franchising Program:
General.
The Company has various franchising programs supporting its 3,742 franchise salons as of June 30, 2007, consisting mainly of
Supercuts, Cost Cutters, First Choice Haircutters, Magicuts, Pro Cuts, St. Algue and JLD. These salons have been included in the discussions
regarding salon counts and concepts on the preceding pages.
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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