FRANCHISE SALES SUCCESS SECRETS FROM THE HOTTEST FRANCHISE CONCEPTS
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2 FRANCHISE SALES SUCCESS SECRETS FROM THE HOTTEST FRANCHISE CONCEPTS
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4 HOW BAD DID IT GET? Establishments 770, , , , ,571 Percent change 0.4% -3.5% -0.8% -0.6% Employment ('000) 7,994 8,028 7,800 7,786 7,934 Percent change 0.4% -2.8% -0.2% 1.9% Output ($Billions) Percent change 4.2% -2.8% 3.6% 5.3% GDP ($Billions) Percent change 1.8% -1.2% 3.3% 4.9% Information provided by The Franchise Business Economic Outlook: 2012 IFA
5 GROWTH BY BUSINESS LINE Automotive 31,307 31,653 30,012 29,687 29,955 Percent change 1.1% -5.2% -1.1% 0.9% Business Services 102,370 96,289 89,691 89,147 90,035 Percent change -5.9% -6.9% -0.6% 1.0% Commercial & Residential Services 64,715 65,325 62,650 61,509 60,241 Percent change 0.9% -4.1% -1.8% -2.1% Lodging 25,830 26,572 25,588 25,410 24,817 Percent change 2.9% -3.7% -0.7% -2.3% Personal Services 107, , , , ,545 Percent change 3.0% -3.8% -0.4% -0.5% Quick Service Restaurants 150, , , , ,549 Percent change 1.1% -1.0% -0.5% -1.3% Real Estate 96,848 94,599 88,372 86,153 84,977 Percent change -2.3% -6.6% -2.5% -1.4% Retail Food 60,935 62,247 60,374 60,173 60,583 Percent change 2.2% -3.0% -0.3% 0.7% Retail Products & Services 94,966 98,527 97,519 96,921 96,504 Percent change 3.7% -1.0% -0.6% -0.4% Table/Full Service Restaurants 36,145 36,221 35,614 35,688 35,365 Percent change 0.2% -1.7% 0.2% -0.9% Total 770, , , , ,571 Information provided by The Franchise Business Economic Outlook: 2012 IFA
6 UNITS BY BUSINESS LINE Table/Full Service Restaurants 5% Automotive 4% Real Estate 12% Retail Food 8% Retail Products & Services 13% Business Services 12% Commercial & Residential Services 8% Quick Service Restaurants 21% Personal Services 14% Lodging 3% Information provided by The Franchise Business Economic Outlook: 2012 IFA
7 CREDIT ACCESS IMPACT Not Applicable 19% 31% No Impact 9% 19% Moderate Impact 19% 31% Significant impact 31% 41% 0% 10% 20% 30% 40% 50% Nov, 2010 March, 2011 Information provided by The Credit Access Survey March 2011 IFA
8 GROWTH PERCENTAGES % Change CAGR* CAGR* Franchising Overall 41% 3% 0.4% Batteries Plus 173% 11% 13% Batteries Sector 174% 11% 13% Retail Stores Industry 10% 1% -1% Great Clips 103% 7% 3% Hair Sector Sector 49% 4% 1% Beauty-Related Industry 63% 5% -11% Firehouse Subs 1638% 33% 8% Sub Shops Sector 90% 7% 1% Fast Food Restaurants Industry 35% 3% 2%
9 John Twist Vice President Franchise Development
10 OUR COMPANY Vertical retailer of batteries and bulbs Founded in 1988 in Green Bay, WI First franchise opened in stores in 46 states and Puerto Rico 467 franchise owned 33 company stores Markets of >75K population Initial investment about $250K 10
11 STORE DEVELOPMENT 11
12 WHAT WE DO Serve over 7 million customers annually Sell over 60 million batteries and light bulbs annually Access to over 60,000 SKUs Provide technical sales and service Stock it. Fix it. Make it. Source it. 12
13 5 YEAR SUMMARY 58% increase in store count System sales increased 90% Opened 200 stores, closed 15 AUV increased 23% Same store sales grew average 12%/year 13
14 3 YEAR SUMMARY 44% increase in store count Opened 161 stores, closed 10 System sales increased 54% AUV increased 10% Same store sales grew average 9.5 %/year 14
15 ACTIVITY HIGHLIGHTS Tripled field support team Expanded training staff & facility Improved category/product management & supply chain Introduced new complimentary product category (bulbs) Dedicated resources to manage B2C and Fran Dev. websites 15
16 Rob Goggins Sr. Vice President Real Estate & Development
17 GREAT CLIPS VISION Working together to build the most profitable salons by delivering the most powerful and enduring brand.
18 EXISTING SALONS
19 APP. SITES / SIGNED LEASES
20 FOCUS MARKETS
21 NUMBER OF FRANCHISEES
22 NUMBER OF SALONS
23 CONSUMER SALES
24 NUMBER OF NEW FRANCHISEES
25 SIGNED LEASES
26 LEAD SOURCES % 10% 10% Broker Advertising Organic/Referrals
27 LEAD SOURCES % 50% 30% Broker Advertising Organic/Referrals
28 ALL LEADS BY YEAR
29 ALL QUALIFIED LEADS BY YEAR
30 GREAT CLIPS UPDATES 29 Straight Quarters of Same Store Sales Increases Item 19 sales and profit increases 98.2% of Franchise Agreements Renewed Online/mobile check-in Fastest growing salon franchise
31 Don Fox Chief Executive Officer
32
33 446 locations in 26 states 481 locations in 28 States and 1 U.S. Territory
34 UNIT COUNT GROWTH
35 NET OPENINGS Number of Restaurants Opened Closed
36 UNIT LEVEL PERFORMANCE Average Unit Volume (000) AUV (K) Comp Sales %
37 Franchisee Keys to Success Marketing LSM Catering Public Safety Foundation Profitability Operational Excellence People & Culture
38 Franchisor Keys to Success Be Fair Involve the Franchisees Approve the Right Sites Select the Right Franchisees Protect the Core Financial Model Provide Excellent Service & Training Enforce Brand Standards & Expect Superior Performance
39 FRANCHISE SALES SUCCESS SECRETS FROM THE HOTTEST FRANCHISE CONCEPTS
40 WHAT DOES THE FUTURE HOLD?
41 UNIT COUNT BY BUSINESS LINE Automotive 29,687 29,955 30,376 Percent change -1.1% 0.9% 1.40% Business Services 89,147 90,035 92,349 Percent change -0.6% 1.0% 2.60% Commercial & Residential Services 61,509 60,241 60,989 Percent change -1.8% -2.1% 1.20% Lodging 25,410 24,817 25,584 Percent change -0.7% -2.3% 3.10% Personal Services 106, , ,410 Percent change -0.4% -0.5% 2.70% Quick Service Restaurants 149, , ,347 Percent change -0.5% -1.3% 2.60% Real Estate 86,153 84,977 86,631 Percent change -2.5% -1.4% 1.90% Retail Food 60,173 60,583 61,144 Percent change -0.3% 0.7% 0.90% Retail Products & Services 96,921 96,504 96,574 Percent change -0.6% -0.4% 0.10% Table/Full Service Restaurants 35,688 35,365 36,095 Percent change 0.2% -0.9% 2.10% Total 740, , ,499 Overall unit count is expected to grow by 1.9% is 2012 after three straight years of decline. Information provided by The Franchise Business Economic Outlook: 2012 IFA
42 FRANCHISOR OUTLOOK About the Same 47% 58.60% Better 31% 50% Worse 3% 10.30% 0% 10% 20% 30% 40% 50% 60% Information provided by The 4 th Annual Franchise Business Leader Survey: Dec 2011 IFA
43 FRANCHISEE OUTLOOK About the Same 47.0% 55.6% Better 22.2% 47.1% Worse 5.9% 22.2% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Information provided by The Franchise Business Economic Outlook: 2012 IFA
44 FRANCHISOR SSS OUTLOOK Decrease moderately Stay about the same Increase moderately Increase significantly 0.0% 4.50% 23.0% 14.2% 26.4% 22.4% 50.6% 59.0% Information provided by The Franchise Business Economic Outlook: 2012 IFA
45 FRANCHISEE SSS OUTLOOK Decrease moderately Stay about the same Increase moderately Increase significantly 0.0% 5.90% 33.3% 11.8% 40.7% 25.9% 17.6% % Information provided by The Franchise Business Economic Outlook: 2012 IFA
46 FRANCHISOR UNIT OUTLOOK Increase > 6% Increase < 6% Stay about the same Decrease < 6% 10.5% 17.2% 4.7% 5.2% % 32.80% 50.0% 44.8% Information provided by The Franchise Business Economic Outlook: 2012 IFA
47 Geoff Hill Phone: Don Fox Rob Goggins Phone: Facebook: John Twist Phone:
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