Thank you for joining. I'm John Jannarone, Editor-in-Chief of IPO Edge, here with my co-host, Jarrett Banks. Today we have not one or two, but three C-suite executives from Regis, which is the largest hair salon operator in the world. A 100-year history doing some very exciting things, returning to profitability after COVID. We're talking about big data, the use of AI, and a lot of other exciting stuff. Before we jump into all of that and you meet today's three guests, I just wanna remind everyone that we welcome questions, and the easiest way to submit those is right there on your Zoom portal. You can pop those in. We'll get to them in the last 10 or 15 minutes or so. If you'd like to watch the replay, the easiest place to find it will be this afternoon on ipo-edge.com. You can also just look up the RGS ticker on Yahoo Finance or your Bloomberg terminal. It will appear for you there as well. With that, I'm gonna pass the baton over to Jarett, who's gonna introduce Matt Doctor, who's the CEO. Shortly thereafter, his colleagues, Kirsten and Jim. Jarett, take it away. Thanks, John, and welcome everyone to the broadcast. I know we met in Orlando, so this is the second time meeting for us. Good. Matt, let's start with you. Give us a little bit of your personal background and tell us what the opportunity is here. Yeah, no, absolutely. Appreciate, you know, John, Jarrett, and thanks everybody who's tuned in, listening and watching. I started my career in finance, I was an investment banker. I worked at JP Morgan out in New York for a number of years, I covered financial institutions. Interestingly enough, not even retail, not necessarily even franchising. A little bit of a world apart, it was during and actually coming out of the financial crisis, it was quite the time to build a foundation in finance there. From there, I moved in 2014 on to Burger King, where I ran all global development and franchisee performance for the Burger King brand. I had an opportunity to live around the world, accelerating our growth both domestically and internationally, as well as focusing on making sure franchisees' business models are really strong. You know, eventually Burger King became Restaurant Brands International through mergers with Tim Hortons and Popeyes and so on. After the merger, I actually moved up to Canada for Tim's, where I led some development efforts there. All that being said, I had a really good front row seat inside of a large global franchisor driving growth. After doing that for a number of years, I kind of always in the background of my mind had a little bit of an entrepreneurial itch. I just never knew what I wanted to kind of branch into or get into from that. You know, I kind of always say, after selling the dream of large-scale franchisee ownership for a number of years, I decided to give that a shot. I ended up becoming a franchisee, stepping on the other side of the proverbial table, and really got a unique opportunity to get that perspective and see franchising really from all sides. I think it's very unique to be able to see it through the lens of the franchisor but also be on the ground as a franchisee. My partners and I, we actually became the largest franchisee in the Tim Hortons system, got up to 83 restaurants. Found an opportunity to sell during COVID, so we exited that business in 2020. That kind of brings me around to Regis and the opportunity here. You know, it's a little bit of an interesting story. I actually started at Regis as an independent contractor, and you know what I was helping with was the goal of making this transformation and bringing home the transformation of our corporate salons going fully franchised. We had about 1,000 salons left at the time where I joined, and my whole goal was to wind that down. Really kind of after being in the company for a few months, I kind of looked around. I was energized by the people. I saw the platform that we had with incredible brands. No doubt was this business hit hard by the pandemic? Absolutely. I think I was just really energized that I really wanted to be part of the solution, and I wanted to be part of the turnaround because of the platform, because of the opportunity, because of the brands we had, because of all the fundamental lying strengths of this business and the opportunity to work with folks like Kirsten and Jim and the rest of the team. I was like, "Let's make this happen." A couple months into, you know, being a contractor, we made it official. I joined full-time in February 2021. I became CEO December 2021, here we are. I think kind of that mix of finance franchising is relevant to kind of Regis at this point in time. That's a really great story. I love hearing things like that. Give us an overview of Regis, including, you know, all the included brands in that, like Supercuts. Where is the company at in its transformation? Yeah, no, absolutely. You know, as kind of John alluded to, we are the largest owner and network of salon brands globally, over 5,000 locations, primarily North America, vast majority in the U.S. We do have a flagship brand in Canada and some locations in the U.K., but vast majority is U.S. based. For those who may not know of Regis as a holding company, you probably know of the brands that we have, given that they do have pretty good awareness. We really have five primary brands that we talk about. We do have more than that on a more regional basis. As we think about five primary, they cover really a wide range of diverse demographics, which is why we kind of have those five and we talk about the five. People ask, "Should it be less or you should..." This is kind of the number that we see that covers the widest range of options and folks within these five unique brands. Supercuts being, our largest by footprint, high awareness, known for a convenient haircut, a great value, like all of our brands really are. SmartStyle, this is our second largest brand by footprint. It's about 1,400 locations. It's capped into Walmart. A little more full service for the Walmart shopper. At 1,400, probably one of the biggest, if not the biggest-Tenants within a Walmart. We have some regional brands. We have a regional brand, Cost Cutters, a little more full service as well, about 550 or so locations there. I mentioned our flagship brand in Canada, First Choice Haircutters, Canada born and bred, the leader over there in that segment. Roosters, which is one that's a little bit more higher end, appointment-based, barbershop, male-leaning. Those are really our five primary brands. We do operate, as I kind of mentioned, in the franchise model, so our salons are owned and operated by independent business folks. We have about 600 franchisees. When you talk about that transformation, I kind of mentioned how I came in to look to wind down the finish from corporate to franchise. In terms of, you know, this is a business that has undergone a big business model transformation, and this started years ago. In 2017, it was the decision to go from majority corporately owned salons to a fully franchised model. That decision was really made through a few lenses. You know, one being benefits operationally. This is a high touch people business. To have local independent operators and that ownership mentality from an operational perspective, that was a big deal. There's a lot of benefits to bring in franchisees to be stewards of our brands and our salons. There's benefits financially. You know, moving to a much more stable, predictable, recurring revenue stream from royalties. A lot of financial benefits to a much more streamlined business now. Low CapEx, asset light we talk about. Just clean. We were in a distribution business, no longer. It's a lot cleaner and really from a value creation perspective. I think, you know, we don't need to be shy around things of that nature. You know, franchisors do trade at pretty good multiples given that predictability. When you kind of put all that together, we saw a lot of benefits from that transformation. Where we are there, by and large, from a business model perspective, we're there. It's pretty much done. Out of our over 5,000 locations, we have 70 corporate salons, so really we're there from a fully franchised perspective. I will not say that the overall turnaround transformation is complete. I think we're just kind of in the next phase of now we got to really think about optimizing our brands, optimizing our franchise businesses, you know, optimizing, you know, our stylists and all those, and even our business. Always like now kind of looking through the lens of the needs of our franchisees, customers, and stylists as we go forward. All right. Great. Quite a large footprint, indeed. How do you differentiate yourself in an industry like this? Give us some of your competitive strengths. I think a lot of the strength is I want to kind of hit on our brands. You know, I really do think our brands in and of themselves are strengths in the diversity within them. As I kind of mentioned, it was a strategic thought to get down to the smallest number that can service a wide range of demographics. The awareness that they all have, whether it be nationally or within their respective regions, I think is really strong. You kind of mentioned the segment, I think the segment of itself that we're in is a strength, kind of that value segmentation and diversity within that value segmentation is good. It's not just one type of person who fits the bill for value. You get anything ranging from someone who really cares about their haircut and looking for a great price to someone looking just for convenience, get me in and out. I think there's a place for everyone in this segment that we're in. For us personally also, getting a little more specific to Regis, I really like our model that I spoke about, having our franchise owners and the corresponding business model with that. Our team, I mean, we have an incredible mix of legacy folks like Jim and Kirsten, who have been here for a while with that great operational know-how to tap into that 100 year of history. As well as there's been a lot of new complementary adds as well with kind of the franchising expertise. If I think about what perhaps is the biggest strength that we have, I think it's our scale. I think it's our scale. I think it's our reach across the entire country. I think there's and this is something I really believe that we've only scratched the surface in. I think there's a lot of strength in numbers. There's strength in acting in uniformity as brands, as franchisees. I think there's power and strength in telling similar stories and messages. I believe being able to drive behavior versus reacting and having scale to be able to do that when you have 5,000 locations talking about similar message, relaying similar things, I believe this is a really powerful tool at an awareness level that we have that you wouldn't be able to achieve with a one-off location. As well as, Jarrett, I know we spoke about this a little bit in previous times, but the data that we have from the customers that come through our 5,000 locations that we can glean and that we can use, I'm telling you, I really think we have only began to scratch the surface in leveraging all of this. If I think about it going forward and the big piece of the story, I think leveraging our scale to our benefits is something that we're just starting to tap into and could be a really great catalyst as we move beyond. That's a great answer, and we definitely want to get into some of those tech developments a little later in the conversation. Just could you give us some milestones that the company has achieved since you've taken over as CEO? Yeah. No, absolutely. I speak about this on our conference calls, and I love opportunities to talk about these things because I honestly. We've done a lot, and I'm very proud of what we've done in really what's been a fairly short period of time. If I think about kind of the timeline I gave of stepping in as CEO, you know, I was made interim in December 2021 and full-time permanent just a year ago. If I think about what's transpired since then, let's just start with the people aspect, because this is a people business through and through. Take a lot of pride in our internal team and our employee base and stabilizing that and having the right leadership team and folks dedicated to this business. Our relationship with our franchisees, very, very proud of the progress that we've made. There's still work to be done, but building those bridges and relationships and that, you know, that partnership between us, that has been a big undertaking that we've done a lot of over the past year and a half. Our business model shifts, we finalized that. I mean, that was a big deal. As I said, we still had, you know, about 1,400 salons left just a couple years ago. You know, to get that really wound down and having the benefits of that and the, you know, the P&L implications that it was actually hurting our business, having the kind of last ones that were a drag on profitability, winding that down is a big deal. You know, focusing more on our core business, you know, one thing that we touched on a little bit, it's crazy to think about this, Regis was actually in the tech business. As I mentioned at the time, wow, it's really hard to be a technology company when that is your sole focus. It is even more hard when you're a hair care franchisor trying to be a technology company as well. To be able to kind of really streamline our business, we sold our Opensalon Pro tech platform to Zenoti and partnered with them, who's got a decade-long experience in point-of-sale software solutions. We think they're gonna be the right answer for us for the long term. Awesome to leave that up to the experts and have us be able to focus on what we do, which is hair. That had a lot of great technologically operational and financial implications as we were able to sell that as a gain. That kind of helped in sort of dovetailing of what I'm gonna say next in really stabilizing the business from two perspectives. A P&L perspective. You know, when I took over the business, we came out of a year in 2021 where we lost close to $70 million in EBITDA. In fiscal 2022, we broke even. Now, you know, three quarters into our fiscal year, we're at positive around 16, trending towards, you know, gonna be able to do 2019, 2020 if we're just holding to where we've guided towards. Those are big step changes and stabilizations. Even from our capital structure perspective, you know, we had a debt maturity coming up in March of 2023, and so we were able to amend and extend that and push that maturity out to August 2025. I think there's just a ton of stabilization that's been done. I think this is going to be an ever ongoing journey as I talk about, okay, these are good steps, right? Relationships, stabilization, moving profitability, balance sheet. Is this the perfect place where we're gonna wanna be forever? No. I think it's nice that we reached a period of stabilization, so now we can really start thinking about those next things on, okay, how do we take this EBITDA from where we are to beyond? How do we grow into the capital structure and find that ideal sweet spot? These are things we're ever gonna be thinking about. Oh, by the way, in the midst of all of that, putting together a pretty exciting strategy on our core business aligned with our franchisees for the future as well. Those are all things that, like I said, it's a lot in a short period of time that we're proud of. We'll sit back and we'll be proud of that, but by no means, and I say this all the time, by no means does that mean we're getting complacent because we know we still have work to do. We still absolutely have work to do. It's a great answer. Speaking of positive EBITDA, Kirsten, I'd like to turn to you for a second. Matt mentioned those three quarters in a row, positive EBITDA, as well as several quarters of increased system-wide same-store sales. Could you give us, you know, your thoughts on what's leading to this improvement, and how do you keep delivering consistent profitability? Yeah. Thanks, Jarrett. I think you heard a lot of the answer from Matt. First and foremost, I mean, the change in the business model in terms of, you know, winding down the company on locations, the sale of the POS. We also wound down our product distribution business. You have that just in terms of moving from an optical business to a franchise business. Then, and then everything, you know, Matt highlighted what the company's achieved since taking the helm, but it's a culmination of all those things starting to come together, in addition to, you know, a maniacal focus on G&A. You know, put those three kind of key pillars together and you drive profitability and we've seen that in this fiscal year. You know, the other thing I guess I would add is, you know, since Matt joined the organization as CEO, we've really focused on our partnership with our franchisees. I feel like now more than ever, we're aligned on what the initiatives are with the company as well as with the franchisees and focusing on, you know, stylist retention, recruitment, customer retention. All of those obviously continue to drive profitability for the business. Like Matt said, you know, we've made a lot of improvements. There's been a huge step change in profitability, and we're starting to see the business stabilize. There's a lot of, a lot to do yet and a huge opportunity for us to continue to grow the top line. Yeah. I would also just underscore one thing there, guys, is that, you know, over the course of my 11 years, you know, I've seen, you know, different takes on the business and different focuses. I think really for the first time we have, we have maniacal surgical focus as Kirsten just described. You talk about the stylist being the center. I mean, that is our productive asset, and all focus is on recruiting and retention. Customer retention, driving those components through marketing and CRM and loyalty. The tech component that Matt talked about, highly focused on that, getting everyone migrated over to a very capable POS platform. The operational support that we provide our franchisees. We have To Matt's earlier point, we have some really talented people that really know this business well, and we're able to go out now more proactively and teach and train and assist and guide our owners on the business. Then wrap that all up with also what Kirsten said, and that's this thing called relationship. You know, the relationship in our business is born out of a stylist and a customer in the chair. That really permeates its way all the way through the business. That business between franchisor and franchisee is that relationship is critical, and we've taken that very seriously. By no means am I ready to wave the checkered flag, but we have come a long way in that business. We have advisory councils that we work with very closely, to ensure that we're partnered, that we're on the same page. By no means are we out there just telling franchisees what we're gonna do. We're really working with them to gain their insights. We have some very capable long-term legacy owners that have phenomenal insights on the business, and we definitely leverage that insight and that expertise. That's a great additional point there, Jim. Kirsten, how do you think about financial statements and some of the changes, you know, that we've discussed in the business? That's a great question. Our financial statements, I think can be easily misinterpreted. With the change in the business model, there's a lot of what I'll call noise in our financial statements. I mean, specifically, let's just talk about the revenue line. If you look at our P&L on a year-over-year basis, revenue is going down. That's for a couple different reasons. One, we've talked about us transitioning out of the OpCo salons. That revenue has come down. Those were unprofitable salons. As revenue has come down, as we exited those locations, EBITDA has gone up. Secondly, we have accounting that impacts our P&L. For example, the rent... We have rent revenue and rent expense that equal each other, have no impact on profitability, but you see that rent line in revenue going down. If you look at, like, total revenue, it looks like on a year-over-year basis, we're going down. What our investors and potential investors should be focused on is our core business revenue, which is royalties and fees. When you look at that, there's a improvement on a year-over-year basis. That's one example, Jarrett. The other example is on the balance sheet. We actually get this question all of the time because I think when you screen Regis, you get not only our debt that we have on our balance sheet, but it's also pulling in the operating leases that from an accounting standpoint, we need to put on our balance sheet. Let me explain that a little bit. Those are operating leases that Regis is on the head lease, we sublease those to our franchisees. Those leases are serviced by our franchisees, they're paid for by our franchisees, right? Yeah, well, technically, it is a liability of Regis Corporation, and that's why it's on our balance sheet. It's not debt that we're servicing. Really, investors should be focused on the true debt level, which is, you know, $185 million, not $585 million. I think there's a lot of confusion when you look at our financial statements, and part of that is the change in the business model, part of that is accounting that makes it confusing. Yeah. Yeah, it's an opportunity for us to do, quite frankly, probably a better job of, right? As we think about, you know, how we're laying this out, how we're talking about it's something that we're ever ongoing thinking about, how do we make this a little more clear, focused on the right metrics. Those are the things that we're cognizant of as we continue to move forward. Great. Important distinctions to be made, and glad that you're using our platform to do that. Matt, now let's get into some of the key priorities for the business in this year and next year. Particularly, you've touched on this a little bit, but let's talk about the technology, the data, the scale, how this can all come together. Yeah, absolutely. You know, trying to keep things, continue to keep things pretty simple and focused. On our own house side that we've been doing, you know, it's continuing to manage that G&A figure, continuing to wind down the company-owned salons. I mean, that's kind of the Regis side of the house. Always ongoing, as Jim mentioned and we touched on, continuing to foster relationships with the franchisees. That will never stop. Really, it's, you know, now let's turn our focus to driving profitable sales. Like, I don't wanna say just sales for sales sake, but, you know, profitable sales for our franchisees with focus on, you know, the two biggest levers there. Still focusing on how do we recruit and retain stylists the best way possible we can? How do we have the story of why folks would wanna work for our brands? How do we make sure that that story is being told in relevant places, so it's just not falling on deaf ears? Really, you know, there's been a bit of a shift. I think it's time to start thinking about how we drive more customer traffic into our salons. I think we've done a lot of foundational work on muscle that was needed to set ourselves up to be able to do so. Start having that right story for recruiting. Start investing in our visits back to the beauty schools and colleges. Start having great-Fundamental foundational elements of customer retention, you know, muscle that we didn't really have and was focused on much before, but start talking and implementing things like CRM and loyalty. We have, when we drive new guests or last guests, we can look to keep them, which is so important. To your point, Jarrett, like leveraging our size, scale, data, completing the rollout of our technology solution, Zenoti, 'cause that's gonna be a major key and unlock to be able to do a lot of the things that we're talking about. You know, having a loyalty program built in is going to be key. You know, the right POS engine for that is key, which our technology partner will be able to do that, to be able to outreach to our customers and really get a sense of what they're saying and to start creating a good two-way dialogue that we haven't had in the past, just to learn more from them, to keep that relationship going before and after they're in the chair and not just stop when they're there. We're learning a lot through our data that we have a great opportunity to bring folks back. Like, there's a lot of people who come into our salons and they're one and done. Like, the power of being able to talk to them and entice them back in for just one more incremental visit is huge. Really, you know, just really focusing on finish the tech rollout, which will be a major unlock to ensuring that we're building those strengths and relationships with our customers to drive traffic, which then ultimately has a lot of byproducts into stylist retention, if they're busier, they're gonna stay, and recruitment, if it's busy, they're gonna wanna come. Really focused on those three main priorities for our broader business and continuing to watch our own home from a G&A and corporate salon perspective. Just to touch a little bit on going into the future and some innovation and not giving too much away, but I kinda alluded this to a little bit on the last call. Yes, like, a lot of our focus is on that. Hey, maybe there's some things that we should consider that are stretches of our brands. Are there services we're not offering that maybe we should think about that can drive incremental revenue to our box? Is there geographies that we're not in that may have really interesting untapped opportunity there? Things that we're kind of working on, you know, is a new image for some of our brands and maybe very interesting. Are there ways to bring technology into the experience beyond how it already is that may have incremental... Things like that I'm gonna be purposely vague on, but want folks to know that, hey, there are other things that we're thinking about that could be new and exciting on top of driving our core business as well. I think that's really smart. Kirsten, SG&A has been a bright spot. Could you tell us about some areas where you're seeing increased efficiencies and where you're focusing your investment spend at the moment? Yeah, you're right. G&A has been a bright spot for us. Just to put some numbers around it, we've taken $66 million of G&A out of the P&L since fiscal year 2020. Our entire organization has done an outstanding job finding efficiencies and not compromising the support that we can provide to our franchisees. In fact, we've actually increased our level of field support and provided more and even improved tools for our franchisees and their teams. You know, we flattened out the organization. In some cases, we've had to be a little bit scrappy and nimble, right? Be flexible with our G&A dollars. We're super thoughtful about how we spend those dollars and focus those G&A dollars on areas that will continue to drive traffic and drive the business. You know, as we've talked about earlier in this call, retention of customers and stylists, recruiting. I mean, those are areas we're very focused on and ensuring that our G&A dollars are being spent wisely there. Great. I wanna bring Jim back into the conversation. You recently held an event in Las Vegas for stylists. What can you tell us about that, and will there be more in the future? Yeah. Thanks, Jarrett. A pretty cool deal. You know, we have, we've placed a great deal of focus on education. I've been in hundreds of salons and spent thousands of hours with stylists. When you ask them, "What can I do for you today, or for your near future?" The question is always the same, "I wanna be able to advance my craft and my capability." That's a key aspect to retention, which is so critical in today's job market, especially in the styling world. We developed as part of our initiatives that we've all kind of spoken to today, we've got to focus on our stylists' recruiting and retention. That word retention, what keeps them? What makes it sticky? What makes them wanna hang out with us? You know, having spent, you know, many years in this industry, we would have these events and training events over the course of each year that would make a significant difference. No one would wanna leave because they couldn't wait to go to the next event where they're gonna get training and some fun and some recognition. We've really brought that from what we did on the corporate side, now we've brought it over to the, to the franchise side of the business. We just kicked it off in this last. The event in Las Vegas was Supercuts focused. Over 800 stylists and owners attended. It's put on, we have an incredible head of education, Senior Vice President, Jamie Suarez, who has been in the industry for a very long time, and an expert and extremely well known, and is the architect of these events. He and his team of artistic directors host the event along with all of our key vendors. It's at a big hotel in Vegas, so you get all the cool Vegas lights and fun and all that that brings, and stylists just love it. We all love it, to be honest. The event is about retention, it's about education, it's about being part of something bigger, and it's a monstrous success for us. We have another event coming up in June in Miami, where we're gonna bring in another Large group of owners and another large group of stylists. The intent is to create kind of regularity and expectation of this, that when you're part of this Regis system and part of the Regis brands, and you're a stylist, you get to be part of this cool stuff. Very, very less apt to want to kind of migrate to another place, another home. We try to create the culture and that family kind of... That's the other beauty of having franchise ownership, is you can really the owners can create a real kind of cozy family culture that is so critical to the DNA and the mindset of a stylist. Yeah, the events are great. We're looking forward to the one in June, and we've got more on the docket coming. Yeah. Just to piggyback off that a little bit, you know, this is another example of collaboration with our franchisees, right? This is something that, hey, this is not something that came from our minds and like, "Hey guys, let's throw a big event." This was a working with them to say, "Hey, what are some things that can really differentiate us and get people talking?" A lot of the dialogue post that event from franchisees is, hey, all of the folks who went. I mean, keeping a productive stylist is key, 'cause to rehire somebody who was that productive is a big undertaking. Retention is just as important, if not more important, than recruiting itself at this point, especially from some of your best of your best. These are going back into salons. The stylists are energized when they go back in. The teams are energized at the idea they can end up being on this trip as well. It's really an awesome ecosystem, it's a great opportunity for us to learn, right? To be around 800+ stylists and owners to hear firsthand, "Hey, this is what's going well. These are the challenges. This is..." We can kind of test our own theories out a little bit too. "This is what we're working on. What do you all think?" It's just a great differentiator. Another thing that you get when we talk about advantages, at scale, it's only something, you know, companies like us can put on versus a, you know, one-off location. Yeah. We take advantage of them. We have all those folks that we have on their focus for a few days. We'll bring the owners in as we will have done and, or we're actually expanding this for the Miami trip, where we'll have owner tracks. The owners can come in and they'll test drive some ideas, to Matt's point. We'll talk about, hey, we're thinking about this in marketing, you know, we wanna kind of walk you through it. Here's where we're going with technology. I'll bring in the ops team, and we'll talk about, hey, we're gonna bring up some franchisees, and we're gonna talk about some best practices that we think are scalable, that we think that you can all benefit from. This becomes kind of this multifaceted approach, all kind of wrapped around this stylist event that gets them extraordinarily excited, and it checks that important box, that advancement of my craft and my capabilities. So. That's a great segue into my next question, Jim. How are you innovating in product, service, technology, and training to elevate your salon performance? Yeah. Yeah. Great question. There's a lot there, a lot we're doing and a lot yet to go. You know, when you look at the components, you look at education and I can't stress education enough. When you talk about education, there's kind of two aspects of education. There's the in-person hands-on training, which actually in the industry, if you take a look at competition, you're starting to see less and less of the hands-on in-person type training. Another reason it makes this event so special, 'cause we're all there together, and you actually get to see the trainer actually cut the hair, color the hair, and do what they're doing. There's also the digital side of that. I am particularly impressed with the work that the organization has done. This is something Jamie has also done in the last, you know, three, four years. We have a significant digital library we call it the Education Playground of virtual training. Hundreds of short vignettes that teach stylists right on their phone. They can see how to do a certain kind of fade clipper cut or a balayage or a certain type of style. What we have found from an innovation standpoint is we wanna make sure we don't lose sight of the hands-on component. We think that's a major differentiator for us. At the same time, we have the efficiencies and the simplicity and the speed of offering a digital solution as well. That's on the, just on the training side, so big focus there. When you look at the POS system side, you know, to our points about going with Zenoti, a very capable POS platform, there's a lot there that it is slowly gonna come to the forefront. But our ability, how we manage appointments, monitor appointments, monitor schedules, ensuring that there's predictability in schedules and accuracy in schedules, this is really important to a stylist, especially in today's post-COVID world. Flexibility of staffing, flexibility. A lot, a lot of moms, you know, work for us with small children, with education and daycare, so we have to manage that process effectively. The platform that we have with Zenoti is gonna give us that capability to be incredibly efficient in that arena. One other... This is an example. We have an automated salon answering system, a phone answering system, IVR, you're probably familiar with, and the interactive voice response. It makes it so that if you think of a salon, you've got three stylists working, all cutting hair. The last thing you wanna do as a stylist is set everything down and have to walk up and answer the phone. We've contracted with a vendor and we're working at offering that. We now have the solution is being scaled to our franchisees. When you take a look at the math on it and you look at the number of minutes that are saved for a stylist not having to go answer the phone and the phone's able to actually the response is able to handle that situation and save stylists time has a magnificent effect and a multiple effect across the system on time saved. A few things, you know, monitoring product sales, another kind of nod to the Zenoti system. Our product sales, the professional beauty products that we sell in addition to our services are an important part of our business. The system being able to track the sales of the top-selling items to accurately reorder inventory and maintain supply chain is a really critical aspect of the business. All of that through technology and the innovation that we have with Zenoti, is gonna make a pretty significant difference for us as we look into the near future. Some pretty cool stuff happening. Great. I'm gonna pass the baton, to my colleague, John, here. We're gonna take questions from the audience. Great. Thanks a lot, Jarrett. I'm happy to see we have tons of questions coming in here. You know, I'm gonna combine a few of those if I might. There's a lot of interest in how the franchisee system works. Can you tell us a bit more about that? Does a typical franchisee own five or 10 locations, or are some of them just a couple? How do they fare through COVID? You know, as we all know, small business owners a lot of times had a really tough time if all of a sudden their revenue went to zero, they owed rent. How did that all shake out? Did they weather it okay? Yeah. No, it's a, it's a great question. We have every kind of size owner you can think of. Our largest owner is close to 400- Wow. We have single salon owners as well and everything in between. If you think of, you know, the median ownership in our system is about five, six salons. Again, we do have 600 owners who have 5,000 of our salons. Again, it is a wide mix of that. In terms of COVID, yeah, look, this was a big-time disrupter on this industry. We talk about it a lot. When you think of all the dynamics that are at play here, you don't really get much closer to somebody than, like, touching their head and being around their face, especially during that time. Regulations, when you talk about, you know, restricting capacity from a people perspective, you know, that is going to have significant impact when your product is really a stylist, and that ramps down. Your ability to generate revenue is naturally going to take a hit from that. All the customer things that have happened in between, I mean, we were speaking a little bit about this before we got on about, hey, stylists want to go cut hair in their garage, or people cut their own hair. There's been just so much of that has happened, and there's a lot of, a little bit of a lingering effect. You know, our franchisees from their perspective, look, there was a holding over of, you know, some government subsidies that did help when franchisees were able to qualify that through various, you know, PPP loans and what have you to help navigate the situation. If we think about what those loans could be used for, they really get to the heart of the franchisee P&L in the stylist. It is labor and rent. Those are the two biggest drivers of the P&L. That's what those funds can go towards. You know, the holdover through that is what helped folks kind of weather the storm a little bit. Now that we've come out on the other side of that, and you have a little bit of a lingering effect of the stylist pool being down a little bit, traffic being stretched out a little bit. Now we're kind of at the point where, okay, there was an ability to weather it because of those dynamics. We need to start having that step change. As I mentioned, that was tough. We weathered. We're at a place where things are a little more stable for staffing, stable for traffic. It's not where we want it to be, though. As we think about going forward, we need to increase, you know, profitable sales, as that is ultimately gonna lead to franchisee profitability and get those economics up to an amount that we can be proud of and our franchisees are looking for. That's why when we talk about the next evolution or iteration of priorities, a lot is gonna be focused on optimizing the productivity in our salons, getting traffic counts up, because really, you know, profitable sales are what is going to be the biggest driver for success for our company and our franchisees. John, I would also add in really just quickly that, you know, having understanding our franchise-franchisee's health and being able to proactively, you know, have a radar, if you will, so we can. From an operational standpoint, those are the steps that we're, although early, those are steps we're going to be taking to ensure that we are monitoring franchisee health and can enter in a proactive way early on and assist with the business. That's what, you know, the operations team can do effectively. To Kersten's earlier point, we've got some fantastic new reporting tools that have helped us in this regard, where we can see things coming, and then we can enter in and have a positive impact before it becomes a problem. Gotcha. Makes sense. Of course, you've made very clear, and I encourage everyone to check out, the investor presentations that are out there that have a lot of details in this. I believe that substantially all of the company-owned stores will be gone in a year or so. You've got, you know, I think you're down to 70 or something. What about your franchisee footprint? Is the goal to optimize that or to expand that in years to come? You know, I'm looking here, sorry, this is a big question. You know... Yeah ... Your Your same-store sales last 9 months are great, so you're growing on the same-store sales basis. Do you need to grow the footprint, or is it better to keep it a, you know, an ideal footprint? Well, you wanna do both, right? I mean, if you think about a franchisee owner, we wanna do both. We wanna grow sales. We wanna grow footprint. I mean, that's what's gonna drive the business at the end of the day. We're focused right now on driving sales 'cause that's gonna lead to growth ultimately. While there have been increases in same-store sales year-over-year, we're coming off of years of, as I mentioned, tough times, right? Yes, we're growing, which is great. We don't want to see that stop. We also got to understand we're growing over a little bit of a smaller base. We still need to increase our focus on driving those numbers up because we have a ways to go from a sales perspective. I absolutely do not want to lose sight of the fact that we should and will need to get back on the path of unit count growth. In order to have that conversation and do that successfully, obviously, the economics have to make sense to the franchisee who's going to be opening that location. The way that things make sense is business model is producing the right level of profitability. The box build-out is value engineered to a right dollar amount and marry those up that it's a good return equation. Absolutely, we'll get back on the track to that. I've said this on the call, I see some of the Q&As being just direct on our footprint. Yeah, we have had ramp down of salon counts. Look, I mentioned at the top my background was global development, driving growth in franchise systems. You never want to see footprint reduction. However, I think there is a very real reality of the situation, as we mentioned. Things got hard, and there are businesses that are not viable. I mean, when we talk about really, really low volume salons that are a drain on our franchisees' time, money, resources that probably it's not worth trying to put all the effort to take a $60,000 salon up to $200,000 because, you know. Should we focus on the $250,000 salon and increase that and make that better? Yes, there will probably be a little bit of a rationalization that will continue. As I mentioned, these are salons averaging $100,000, a lot of cases less. If we think about what that means to Regis from a profitability perspective, 5% on $100,000 is not the end of the world. Now, granted, a little bit can add up. As we think about planning, right, and we think about, you know, same-store sales planning, growth planning, those are things that we're going to have to be cognizant about overcoming as we look to the future. Yes, want to get back to growth, and that starts with effectuating the core business first and foremost. Great. I think we can, Matt, comfortably call you an expert in franchising, given all your experience and success, its importance in Burger King. Tell me what's your strategy when you see a successful franchisee? Do you ever approach that franchisee and say, "Why don't you get some more stores? You're doing great. You're in a good region." Do you give them a little pat on the back or do you wait until they do it themselves? How does that play out? Yeah, I'll start. Jim, I think it'll be a great opportunity for you to jump in here. Thanks for the expert designation. I would not call myself that, but stretch. No, we wanna learn and leverage our best franchisees from a number of perspectives. One, hey, how are you doing? What are you doing that's making you so good? Let's take that and ensure the system knows about it, so we should not be shy about that. It's the benefits of having a system. Yeah, we want to tap into those and have those. When we talk about conversations for growth, those are naturally the partners that we're going to gravitate towards. They tend to be, you know, strong business people, strong cultures, dedication to their salons, good operational results, well-capitalized. These are the folks that we're going to want to learn from for the benefit of the rest of our system and grow with for the right image to our system. Jim, maybe you can touch on some of the processes you've put in place that have been great to kind of spur this along because we've kind of organized ourselves to be able to do this. Yeah. Matt, you really explained it well. John, You know, Majority of what I do in the course of a day, I spend a majority of my time with franchisees, on the phone. I was in the field this week with a franchisee. We've developed systems and processes on the operations team where we can go in and we conduct a deep dive analysis, we call it a business review, to help point out two reasons. We listen and learn from those very capable franchisees that Matt just spoke to, and we can also help those that need, so folks that haven't been around as long. We really do lean on, there's probably a good 20 or so franchisees that have been around a long time that I've become, you know, very close to from the standpoint of better understanding of their business, what makes them tick, what can I learn from it, and what can I take and scale to the system from it. As I said earlier, I leaned into this a little bit, that we have some very, very capable franchisees that are well capitalized, that, you know, still want to grow to some degree, but are most importantly willing to help, and then really understand this business and we're harnessing that. I mean, it's myself and the operations team, as I said, we spend a majority of our days working with these franchisees and learning and teaching as well. Yeah, that's a big focus for us. We're lucky that we have the kind of folks we have running these salons for sure. Great. I see a few questions in here about stylists and, tell us, I mean, I know and I imagine a lot of people are the same, you come to trust a stylist, and that's why you go back to wherever you're getting your hair cut, and it's a personal thing. How do you find the best stylist and how much can you help the franchisees? I mean, I imagine a lot of them are very hands-on and are good at it, but are you able to help folks out who aren't as sophisticated? I believe, you know, you use technology and AI to help find stylists. Can we talk a bit about that? Yeah, Matt, I can jump in a little bit here. We have. In the last year, we've advanced pretty significantly in this arena. We have contracted with a firm called Paradox that's a applicant processing type of a system. It's baked with artificial intelligence, to your point, Olivia, the chatbot, as it is referred to as, that makes the process when a stylist. You get to strike when the iron is hot, and you have to be very quick with your process. If it takes days to get back to a stylist, there's five other competitors that have already swooped in and is ready to hire the stylist on the spot. This new technology and a process that we have in place makes it so that a. Our franchisees can bake all this into the social media content that they have. We have it all out digitally. When a stylist's looking for a job, they can literally, just within a minute, you can have a interview scheduled with the named person on the franchise, the ownership side of the business. Applications filled out. We track it. Now we have data. Now we can see where it's working. We can identify where we've got blocks or misses, or gaps, and now we're beginning to feed this information more often, more regularly to our franchisees. We're actually supporting the Paradox system, so at this stage of the game, it's free to our franchisees. We provide that service to them. You know, still at the beginning stages. We've been doing it for a year, but the system has altered, it's improved, and we're bringing more and more franchisees in as they become more comfortable with the technology. 'Cause there is a side of it that's tech, and you gotta be handy with your phone and understand that whole thing. It's a differentiating component for us. Again, speed is life when it comes to the getting an applicant and a stylist through the system. Yeah. I think just to layer onto that, I think it's a great tool for when applicants are in. We also need to think about how do we attract applicants to join? I think there was a little bit of a question on, "Hey, how do you help?" We need to be very cognizant of the delineation line between our role and recruitment because these are employees of our franchise owners and not us. We have to, you know, do a good job keeping that balance of avoiding any sort of joint employer. What we need to do is shepherd at the top, right? Ensure that our brands are places that folks wanna go. While there is technology that helps funnel folks through, we can't forget kind of the old school tactics of forming a story. Hey, what are the baseline reasons why a stylist should join a Regis brand?" Something that we Like I talk about uniformity and scale, we didn't have that cohesive message at a brand level before, we're looking to develop that in conjunction with our franchisees and stylists. Not corporate speak, but their words, right? Ensuring that their words are permeating through. Why? You get tools to be successful, as Jim mentioned, through education. You get to be part of something big. You get that support. You got people who have your back from franchisee owners and brands. There's inherent customers from being part of a brand. You're more of a team than an individual contributor. You get rewarded to do what you like. These baseline storytelling are things that we're building up, amplifying them where they should be on social media. There are things that we can help from that perspective to train on best practices. You can never substitute showing up at a beauty school and getting your personal name out there. That's something technology cannot do. You know, it's a kind of a guiding on, here's how things that people have done really well. It's having the right story. It's getting out there. It's building relationships. It's investing in the long term, because this is something that has been here before COVID, it's been amplified through COVID, and will be here till the end of time, and recruiting folks takes time and investment. This will be ever ongoing, from now until the end. Great. You know, there was a question there about color, and I wanna wrap that into a larger question. What kind of premium services can you offer, like color, which I imagine, you know, leads to higher revenue and profit per visit? I wanna add on to that, and I'm remembering we interviewed a skincare company who said, "Believe it or not, half of our customers getting facial treatments are men now," and that wasn't true at all 30 years ago. I guess what I'm asking is, what kind of premium services can you do to, you know, raise average visit dollar amount? Also, is there opportunity in the men's side that wasn't there 20 years ago? Yeah. Yeah. Let's talk about it. We'll talk about it. We'll start there a little bit. I think there's a few things there, right? It's a good call-out. I think we approach this in kind of two ways. We kind at our core business, and then we kind of look at opportunity. Yes, color is a high ticket. Is there opportunity to expand that? In some of our brands, yes. It has to make sense, right? Like a brand like Supercuts that was, you know, built on the idea of, hey, great training to get a really good haircut in a short period of time, so it's an efficiency, convenience model. Do you really wanna disrupt something like that by introducing something that it is not and end up in a place that may be too in the middle, versus focusing on the core? Yes, we wanna be cognizant of it. We wanna make sure we do it in places that it fits most appropriately. Jamming that into a brand where that is not natural may not be the right answer, and the answer for something like Supercuts may be going back to the basics and leaning really heavily in to the fundamental premise that it was built on. Can we innovate? Can we see if there's extensions that may warrant it in some certain locations? Maybe. In some of our other brands. Is there a brand we don't have yet? Services that you mentioned, you know, if I really think ahead, right, Our platform. We're a franchisor. This doesn't need to be totally limited to haircare only. There's a lot of great ancillary beauty services that are high margin, very sticky. Whether that enters into some of our footprint, maybe. Whether that's a complementary concept, potentially. Yes, I do like the ideas of service extensions for ticket average where it makes sense, and I like the idea of innovation of ancillary services as well. We just need to make sure we find the right appropriate home that can house that. Jim, I don't know if you had anything beyond what I just mentioned. No, you're the only thing I would add to that, you know, and we use Supercuts as the quintessential example, is that, you know, we do offer color at Supercuts. You take a look at primary competitors, you know, out there that don't offer any services beyond a haircut. It is in the right locations, to Matt's point, in the right locations, it's a good differentiator. It can be game changing depending on the market that you can come into Supercuts, not only a guy get a nice clipper cut, but if you're a gal, you can come in and get some highlights. You know, it's not some premium high-end salon type of thing, but it's effectively done. Back to that education piece, we teach that stuff regularly, and stylists are capable, and with that, with that service. I think it can be a differentiator for us, but we have to properly manage it, to Matt's point, because we are a haircut business, in most regards. Makes sense. Another quick one here. We've only got a few minutes left. I hate to raise the specter of the COVID-driven recession, but there's a lot of talk about higher rates slowing the economy down. Tell us, how resilient is a business like this? And you might look back to 2008, 2009. I mean, I would imagine one of the last things you have to eliminate from your budget is a haircut. How do you guys feel about that? Hopefully, it doesn't come to that, but how do you think the business would fare? Well-positioned. I kind of go back to what I said a little bit earlier as a differentiator and a strength, right? We like the segment we play in, just because value, I think, is resonating with anybody. Cause as I said, a value customer does not look one particular way. It is anyone from all of us on this call who care about how we look and know that we can provide a great service at a great price, that will always be there. That will always be relevant to your point. Like, haircuts will always be relevant. It is as subscription-like as a service without being an actual subscription. People do it many times a year, that's not gonna go away. It's not gonna be replaced with technology to be able to do it for you. You know, to be able to keep our core demographic, to even get folks who are looking to trade in and out, I think it's a really strong spot to be in any environment. That works in good times, that works in a recession, that works in middle times. I think it's just very relevant. Mm-hmm. For any sort of economic environment. Great. Well, as we wrap this up, I'd like to open it up to the three of you. By the way, what a hardworking C-suite. To have all three of you here is a treat for us. There's so much that you, that you guys, you know, you guys have your heads down, you're working so hard, what are you most excited about, the next few months? I mean, a lot's happened since Matt's arrived. What are you most focused on, you know, for the rest of the year here? Maybe we'll start with Matt. Yeah, no, look, I'm really glad you point that out. I really wanted to have. You kind of mentioned three folks is the most you had on. That was great 'cause, look, they've made, and it's not just Kirsten and Jim, I wanna be clear, it's everyone in the freaking organization has made my transition and life here so easy. I really wanna amplify those folks who are here because they deserve the credit as well. I'm gonna keep mine kind of simple, kind of cliche, but look, I mentioned the milestones. I look forward to just continuing it, continuing to deliver, continuing to get some wins. I mentioned we have a long road to go. Continuing to deliver for all of our stakeholders, our franchisees, our employees, our shareholders, our banks, for ourselves. I think that's kind of what drives us, and seeing what we do, what we can do with our size and scale. I mentioned where I think we're really just scratching the surface. I'm looking forward to just continuing to deliver and seeing where we can take this with the innovation that we're thinking about. Great. I'll jump in here quick if we still have a minute. Yeah. I've been a little quiet in the Q&A. What Matt mentioned, the historians on the leadership team, that's me. I've been here for 16 years, I've seen a lot of change. I've personally been on this journey with Regis, you know, I feel so good about where we are today, where the leadership team has the entire organization focused. We're focused on the right things. We're in lockstep with our franchisees. I mean, we're just in such a good place to move this business forward. There's a lot of growth opportunity here, I look forward to seeing that translate into our financial statements and, you know, creating shareholder value. Like, there's a lot of good things happening here, and I'm really excited about it. Great. Well, Jim, I think you get the last word then. Take us home, Jim. All right. Very good. Well, listen, I tell you, and I won't get overly complex here, but, you know, we've got some momentum, and it feels good. You know, we're building great credibility with our franchisees. To all the points that I think a lot of us have made today, just weave it together, that relationship is really important between franchisor and franchisee, and there's momentum there. As subjective as that is, it's powerful, and we're harnessing that right now. You know, we're beginning to, you know, we're gonna move into this next phase of, you know, to Matt's point about stabilization, now we can move in and we can start to become more proactive. Most certainly on my team, from an operational standpoint, we can begin to establish, you know, better standards and brand standards and compliance standards and really set up systems and processes that really begin to let the brands flourish, become more consistent, better operationally. So I'm excited about that. Then, to Matt's point, I'm going to underscore, we have some amazing people on this team. We have some very bright, capable individuals that know this business. And, you know, we're destined, I think, for some very good things ahead. I feel very good about it. All right. Perfect. Well, Kirsten, Jim, and Matt, thank you so much. Good, good to see you again. Thanks for joining us and everyone who tuned in, especially all of you who asked questions. There were so many of them. Sorry we couldn't get to everyone. thanks to all, and have a great afternoon. Appreciate the time. Thank you both. Yeah. Thanks, Jarrett. Appreciate it. Goodbye.