- The Washington Times - Monday, August 27, 2001

Cartoon Cuts is clipping away the competition.

The 18-store children's hair salon chain recently bought Kool Klips, a local competitor with three similar child-oriented salons in Virginia, and has aggressive expansion plans through its new franchising program.

"We're committed to making the combined company a much bigger company," says Franz Jaggar, former chief executive of Kool Klips, who now serves on the board of directors at Cartoon Cuts.

The recent acquisition of Kool Klips will add about $750,000 in annual revenue to the Springfield-based company, which expects revenues to hit $5.4 million this year. The three Kool Klips stores in Springfield, Reston and Sterling, Va., will eventually be transformed into Cartoon Cuts.

Cartoon Cuts for children up to 12 years old is quite different from adult hair salons.

The waiting room, for instance, has toys and Nintendo 64. An elephant's trunk is used to wash the children's hair and during the hair cut they can watch cartoons.

"Our child-friendly salons are aimed to soothe any of their fears," says Jorge Salvat, chief executive of Cartoon Cuts. "We want to make it a joyful occasion instead of one with tears."

Other children's haircutting chains have done the same like Snip-its in Massachusetts or Cool Cuts 4 Kids in Texas, Arizona and Nevada but those don't directly compete with Cartoon Cuts.

All Cartoon Cuts locations currently are owned by the company, with the majority of them in the Washington metropolitan area. The other store locations include Baltimore, Virginia Beach, Atlanta and South Florida.

Cartoon Cuts plans to open three more company-owned stores by the end of the year in Florida, Baltimore and Connecticut.

But the company's real emphasis is on its new franchising program which is expected to add six to eight stores annually in the next couple of years filling in some of the markets they have missed on the East Coast like North and South Carolina and Tennessee, Mr. Salvat says.

The company is close to signing deals in Raleigh and Charlotte, N.C.; Nashville, Tenn., and in the Orlando/Tampa, Fl., area.

"We want to be able to build a program that makes sense," Mr. Salvat says. "Based on our infrastructure, we're not poised to do 20 to 25 stores a year."

The company will eventually go West expanding with franchisees, as well as through other acquisitions.

"It's important to grow our critical mass," Mr. Salvat says.

"In this type of business branding is everything," Mr. Jaggar says. "The more exposure, the better."

Cartoon Cuts was the result of an idea Kathleen Perkal and her husband came up with after they could not find a suitable salon for their own children.

Their first store opened in Aug. 1991 in Fair Oaks Mall.

Ms. Perkal and her family have since relocated to New York but she still handles the real estate and retail buying for the company.

Cartoon Cuts gets as many as 40 inquiries a month from people who want to open a franchise, which can range from $100,000 to $216,000 in startup costs.

The stores, which are typically about 1,200 square feet and bring in an average of $282,000 in sales annually, can be located in malls, strip centers and Wal-Mart super centers.

Cartoon Cuts has an agreement with Wal-Mart to open its salons inside its new mega stores. One location opened at the end of last year in a Wal-Mart in Hialeah, Fla.


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