Supercuts 2011 Annual Report Download - page 22

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Table of Contents
a hub and spoke strategy for hair transplants. As of June 30, 2011, 30 locations were equipped and staffed to perform the procedure.
Currently, a total of 69 hair restoration centers offer this service to their customers. The Company plans to add the capability to conduct
hair transplants to more centers in future periods.
Company-owned-and franchise hair restoration centers are located in markets representing 74 percent of all U.S. television (TV)
households. The Company's hair restoration centers advertise on cable TV to over 86 million households. There is an opportunity to add
a limited number of new centers in under penetrated markets.
Hair Restoration Acquisition Growth. The Company plans to supplement organic growth with opportunistic acquisition activity.
The hair restoration industry is comprised of a highly-fragmented group of 4,000 locations. This landscape provides an opportunity for
consolidation. Given the existing coverage of Hair Club locations, it is anticipated that transactions may involve the acquisition of
customer lists, rather than physical locations.
Affiliated Ownership Interests:
The Company maintains ownership interests in salons, beauty schools and hair restoration centers. The primary ownership interests are in
Provalliance, EEG and Hair Club for Men, Ltd., which are accounted for as equity method investments.
The Company maintains a 46.7 percent ownership interest in Provalliance. The fiscal year 2008 merger of the operations of the European
operating subsidiaries with the Franck Provost Salon Group created a newly formed entity, Provalliance. The Franck Provost Salon Group
management structure has a proven platform to build and acquire company-owned stores as well as a strong franchise operating group that is
positioned for expansion. In March of 2011, the Company acquired approximately 17 percent additional equity interest in Provalliance.
The Company maintains a 55.1 percent ownership interest in EEG. Contributing the Company's beauty schools in fiscal year 2008 to EEG
leverages EEG's management expertise, while enabling the Company to maintain a vested interest in the highly profitable beauty school
industry.
The Company maintains a 50.0 percent ownership in Hair Club for Men, Ltd. Hair Club for Men, Ltd. operates Hair Club centers in Illinois
and Wisconsin.
Corporate Trademarks:
The Company holds numerous trademarks, both in the United States and in many foreign countries. The most recognized trademarks are
"Regis Salons," "Supercuts," "MasterCuts," "SmartStyle," "Cost Cutters," "Hair Masters," "First Choice Haircutters," "Magicuts" and "Hair Club
for Men and Women."
"Sassoon" is a registered trademark of Procter & Gamble. The Company has a license agreement to use the Sassoon name for existing
salons and academies, and new salon development.
Although the Company believes the use of these trademarks is an element in establishing and maintaining its reputation as a national
operator of high quality hairstyling salons, and is committed to protecting these trademarks by vigorously challenging any unauthorized use, the
Company's success and continuing growth are the result of the quality of its salon location selections and real estate strategies.
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