LOS ANGELES, May 2, 2003 (PRIMEZONE) -- FAS Company, LLC, a consortium of regional owners of the Fantastic Sams hair salons, today said it is pleased that the majority of Fantastic Sams regional owners have signed and issued a Position Statement supporting a sale to FAS Company by bankrupt master franchiser Opal Concepts of the assets of Fantastic Sams. The Position Statement also states that the signatories will highly scrutinize any potential buyer other than FAS Company.
According to The Seidler Companies, which is serving as FAS Company's financial advisor, these regional owners are aiming to become their own master franchiser. On April 29, 2003, FAS Company submitted a letter of intent to purchase the Fantastic Sams assets and are prepared to expedite due diligence to finalize their bids with the bankruptcy court.
Also in the statement, the regional owners noted that in order to protect their businesses and valued relationships with their licensees, it is critical to have an extremely well qualified master franchiser. The regional owners stated that they have a legitimate interest in any potential sale of Fantastic Sams assets by the bankruptcy estates.
Regional owners that own 79 percent of the 38 Fantastic Sams regions and sub-franchise approximately 72 percent of the approximately 1,297 Fantastic Sams salons have signed a statement to make clear their position regarding any sale of Fantastic Sams assets by the bankruptcy estates. (See attached document.)
The chapter 11 bankruptcy proceeding, currently under jurisdiction of the U.S. Bankruptcy Court in Santa Ana, California, involves the bankrupt operations of FS Concepts, and its parent, Opal Concepts. As master franchiser, FS Concepts sells regions to regional owners pursuant to Regional License Agreements (RLAs) and each regional owner owns exclusive rights to sell Fantastic Sams franchises in its regions. There are 38 Fantastic Sams Regional Owners. Recently, FS Concepts announced that it intends to sell its assets related to the Fantastic Sams business.
Daniel Harrow, Managing Director of Restructuring services at The Seidler Companies said, "The regional owners strongly believe that the FAS Company consortium of regional owners is the only entity qualified to serve as master franchiser. They are wary of a sale to any other entity because of a justifiable concern that another master franchiser, lacking operational, industry and franchise experience, may once again jeopardize their own operations. In fact, prior to Opal Concepts, two other former master franchisers had severe financial problems. On the other hand, the salons themselves and the Regions which represent them have always been and are currently profitable and financially sound."
About FAS
FAS Company, LLC, a consortium of a majority of the regional owners of Fantastic Sams, was formed in March 2003 with the objective of purchasing the assets of FS Concepts, the bankrupt master franchiser of Fantastic Sams. Founded in 1974, Fantastic Sams is one of the largest of the national hair care franchise organizations in the United States.
About The Seidler Companies
Established in 1969, The Seidler Companies is a leading regional middle-market, NYSE-member investment bank and securities firm. Along with investment banking services for corporations, the firm serves the financial needs of institutions, municipalities and high-net worth individuals. Headquartered in Los Angeles, the firm also has California offices in Fresno, Irvine and Redlands, along with its latest office in Scottsdale, AZ.
The Seidler Companies' restructuring unit focuses on in-and out-of-court restructurings, recapitalizations, distressed mergers and acquisitions, as well as analysis of potentially distressed businesses. Daniel Harrow, a restructuring and bankruptcy specialist formerly with Chanin & Co., leads the unit. Harrow's background includes 20-plus years of restructuring experience on numerous high-profile deals such as Carter Hawley-Hale, Orange County, Greyhound, C&R Clothiers, Carolco Pictures and Hamburger Hamlet.
April 30, 2003
POSITION STATEMENT OF FANTASTIC SAMS REGIONAL OWNERS
The undersigned Fantastic Sams regional owners are issuing this position statement to make clear our position with respect to any sale of Fantastic Sams assets by the bankruptcy estates of FS Concepts and certain affiliates. Together, the undersigned own 79% of the 38 Fantastic Sams regions, and are subfranchisors of approximately 72% of the roughly 1297 Fantastic Sams salons.
FS Concepts is the "master franchiser" of Fantastic Sams hair salons. FS Concepts sells regions to regional owners pursuant to Regional License Agreements ("RLAs"). Each regional owner owns the exclusive rights to sell Fantastic Sams franchises in its region. There are currently 38 domestic Fantastic Sams Regional Owners. Each of the undersigned is a licensee under an RLA and, as a result, is a Fantastic Sams regional owner.
Along with its ultimate parent, Opal Concepts, and 21 affiliates, FS Concepts has been the subject of a chapter 11 bankruptcy case pending in Santa Ana since last summer. Opal Concepts has recently announced its intention to sell assets related to the Fantastic Sams business. Such a sale will be subject to Bankruptcy Court approval. FAS Company, LLC was recently formed to try to acquire the Fantastic Sams business from the relevant bankruptcy estates. Some or all of the undersigned regional owners have or may in the future have an interest in FAS Company, LLC.
The undersigned Fantastic Sams regional owners have the following position with respect to any sale of Fantastic Sams assets by the bankruptcy estates:
1. Our relationship with our master franchiser is important to us and directly affects our businesses. As a result, we have a legitimate interest in any potential sale of Fantastic Sams assets by the bankruptcy estates. We intend to take all appropriate action to protect our businesses and our valued relationships with our licensees.
2. In connection with any proposed sale to any party other than FAS Company, or any attempt to assign FS Concepts' interest in the RLAs, we intend to carefully scrutinize the ability of such proposed purchaser to perform its obligations, including its industry, franchise and operational expertise.
3. Each of us strongly supports an acquisition by FAS Company of the assets related to Fantastic Sams from the relevant bankruptcy estates and prefers FAS Company to become the master franchiser.
Regional Owners Signing Position Statement
May 1, 2003
Jerry Wallace
Tom Boitz
Mike Saner
Ed Daniel
Brent Christensen/Randy Hanson
Bob Szymanski
Barney Ely
Jim Copeland/Dale Wassergord
Richard Bielecki
Glen Adams
Gary Berard
Ted Nyquist
Art & Carol Venzin
David Bales
Larry and CarolAnn Spencer
Tom and Jan Hunter
Dalton Estate
Will Rauckman
Bob Cornell
Scott Jamieson
Bobby Muniz
Russ Barrett
Dick Stine/Dick Kauffman
Chuck Nobbe
Steve Rifkin
Frank Reda
Dan Brisker
Nancy and Pete Roemer
Steve Barrett