Good day, ladies and gentlemen, and thank you for standing by. Welcome to the European Wax Centers Third Quarter Fiscal Year 2021 Earnings Call. [Operator Instructions] At this time, I would like to turn the conference over to Amir Yeganehjoo, Vice President of Financial Planning and Investor Relations. Sir, you may begin.

Thank you, and welcome to European Wax Centers third quarter fiscal year 2021 earnings call. With me today are David Berg, Chief Executive Officer; David Willis, Chief Operating Officer; and Jennifer Vanderveldt, Chief Financial Officer. For today’s call, David Berg will begin with a review of our third quarter performance and highlight the accomplishments towards our strategy. Then Jennifer will provide additional details regarding our financial performance and guidance. Following our prepared remarks, David Berg, David Willis, Jennifer Vanderveldt and I will be available to take questions you have for us today. Before we start, I would like to remind you of our legal disclaimer. We will make certain statements today, which are forward-looking within the meaning of the federal securities laws, including statements about the outlook of our business and other matters referenced in our earnings release issued today. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings as well as our earnings release issued today for a more detailed description of the risk factors that may affect our results. Please also note that these forward-looking statements reflect our opinions only as of the date of this call, and we take no obligation to revise or publicly release the results of any revision to our forward-looking statements in light of new information or future events. Also during this call, we will discuss non-GAAP financial measures, which adjust our GAAP results to eliminate the impact of certain items. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to GAAP measures in our earnings release. A live broadcast of this call is also available on the Investor Relations section of our website at investors.waxcenter.com. I will now turn the call over to David Berg.

Thank you, Amir, and good afternoon, everyone. Thank you for joining us today. I’m excited to speak with you and share our strong third quarter performance. It is clear from our results, both this quarter and year-to-date that our long-term business strategy is delivering. Our brand, which is synonymous with trust, accessibility and best-in-class customer service resonates with our guests, combined with our asset-light business model, which delivers capital-efficient growth and significant free cash flow. We have a powerful platform that enables ongoing sales growth and margin expansion, consistent with the long-term targets we shared with you at the time of our IPO a couple of months ago. As a result of the strong momentum we’re seeing in our centers, we are very pleased to raise our top and bottom line outlook for fiscal year 2021, which Jennifer will cover on the second half of today’s call. Regarding the third quarter, Jennifer and I will both refer to certain growth rates versus the same period of 2019, as we believe this is a more accurate depiction for comparison purposes, given that a majority of our centers were temporarily closed for a portion of 2020 due to pandemic restrictions. Briefly touching on some of the highlights in the third quarter. Let me first remind you that our top line growth is fueled by two priorities: sales at existing centers and continued new center openings. Our third quarter results demonstrate that we continue to deliver on both of these growth sectors. System-wide sales rose 21% in Q3 2021 over 2019. Same-store sales increased 10.6%, which represents a significant and continued sequential acceleration. Since Q1 of this year, we have generated a 16.8 percentage point increase in same-store sales, from negative 6.2% in Q1 to positive 6.9% in Q2 and positive 10.6% in…

Thanks, David, and good afternoon, everyone. I am delighted to speak with you about our strong third quarter results. While discussing our financial performance, I will compare our third quarter fiscal 2021 results to both fiscal year 2020, which was significantly impacted by temporary pandemic-related center closures and fiscal 2019, which represented a more normalized year of operations for us. My remarks will focus on our adjusted results, which exclude one-time costs related to our initial public offerings. Finally, I will cover our updated fiscal 2021 outlook before opening the call for Q&A. You can find reconciliation tables to the most comparable GAAP figures in our press release and 8-K filed with the SEC today. Let me start with a review of our third quarter results. We are pleased to report strong performance highlighted by significant growth in sales and adjusted EBITDA compared to the third quarters of both fiscal years 2020 and 2019. As I will discuss later in my remarks, we are raising our fiscal 2021 outlook to reflect that momentum in the back half of this year. We successfully opened 18 net new centers during the third quarter of 2021 and are now raising our fiscal 2021 target to 57 net new center openings up from our previous guidance of 52 net openings. Q3 system-wide sales were $219.1 million, increasing 60% from $136.9 million in 2020 and 21% from $180.6 million in 2019. System-wide sales growth accelerated from Q2 and was up 15% versus 2019. Our new center growth, coupled with a 10.6% same-store sales increase drove the revenue increase relative to 2019. Our guests continue to favor higher-priced body waxing versus facial waxing, which is driving an increase in average transaction value. Additionally, we increased service prices earlier this year, which is also contributing to system-wide…

[Operator Instructions] Our first question or comment comes from the line of Randy Konik from Jefferies. Your line is open.

Yes. Thanks, guys. Good evening. I have two questions. First question is that I wanted to kind of explore some of the comments made on the Wax Pass and how that’s been growing, and it seems like it’s accelerating actually. And just give us some more perspective on how that’s contributing to keep the growth. Just give us for more details there. Thanks guys.

Sure. Jen, you want to take that?

Sure. Hi, Randy. It’s good to hear your voice. Oops, I’m a little under the weather. Good question on the Wax Pass. We’re very pleased that we have attracted more new customers and reengaged with our existing customers that continue to come back on the pandemic restrictions used in many geographies. You know, we’ve seen is that purchasing Wax Pass is at the same rate as the previous year, which we consider to be a really great thing considering how many more new guests we have as we said in our opening remarks, up 30-plus percent in Q3. You know, our – based on research we’ve previously shared with everybody, we have only one out of every five new guests is coming to us from a competing location. And so, we really believe we’re driving a high-quality brand stance based on the base experience and we should continue to see sustainable growth from them. There isn’t necessarily a straight-line relationship between Wax Pass purchases and redemptions. But we do think that Wax Pass sales, which are strong again this quarter are a harbinger of redemptions and sales to come. And so, yeah, we feel this is really good news.

Great. And then in terms of the comment made around the future growth is coming from, let’s say, existing franchisees wanting to build more units, et cetera. So I just want to kind of get your perspective on how much more consistent are they showing? And then in terms of driving new interest from franchise – potential franchisees that have not did this before, now that you’re public, your brand is to more away out there in the market. Just give us some perspective on what demand you’re seeing from non-small [indiscernible] as well going forward.

David?

Sure. Hi, Randy, David Willis. I’ll take that question. We do continue to see significant interest from multiunit developers and midsized private equity groups. We’ve got about half a dozen private equity groups that are active in the network today. I would also add that the pace which was we are signing, these groups are signing multiunit development agreements is accelerating. That really applies to the multiunit developers and the self-funded franchises and the private equity groups. More than half – as David had mentioned more than half of our existing pipeline is comprised of mud and nearly all of our licenses are held by existing franchisees. So this combination of interest and commitment to develop over multiple years is giving us great confidence in our future pipeline.

And Randy, I think I’ll just add, coming out of the pandemic because of the pace with which we’ve rebounded folks that were in other concepts, we had operators that had other comes context sort of double down and are committed to European Wax centers just because of the way we’ve rebounded as we’ve always talked about, the nondiscretionary nature of the services. And so we’re incredibly excited, clearly as the leader in the industry, becoming a public company just again validates why you want to go with the European Wax Center. So the interest we’re seeing from our current franchisee base, as well as folks who are wanting to partner with our franchisees continues to be a real positive for us as we look to our future growth. Thanks for the questions.

Appreciate it. Thanks, guys.

Thank you.

Thank you. Our next question or comment comes from the line of Lorraine Hutchinson from Bank of America. Your line is open.

Thanks. Good afternoon, everybody. I just wanted to ask you about the change. The increase in your center opening this quarter, is that a pull forward from next year? Or do you think you’ll still be able to maintain that high single-digit new center opening growth next year?

Lorraine, no, it’s not a pull forward. We still feel confident in our ability to deliver the new centers, the 7% to 10% of the existing asset base on an annualized basis. Our internal development team is really getting in stride, and we’ve implemented some changes in the development process itself. And I think we’ve got better communications and dialogue with franchisees to help navigate this post-COVID development process. So I think our franchisees are just being a bit more planful, and that’s renovating with a big faster pace. So it’s not a pull forward.

Great. And then my second question is around the supply chain. It’s gotten a lot of press lately. I just wanted to hear your thoughts on the availability of both the wax and other products that you sell. And if we should think about any increased cost to getting either of those?

No, great question. So we have been fortunate in that we’ve not really seen material shifts in our cost across supply chain with the exception of ocean freight. We did put in place a small surcharge on our proprietary wax and better purchase from us to mitigate this rate expense given kind of the high cash flow position that we’re in as a safety measure, we’ve also brought across some incremental lags in our safety stock. So we continue to monitor this closely Lorraine, but to date is primarily the limited to ocean freight.

Thank you.

Thank you. Our next question or comment comes from the line of Simeon Gutman from Morgan Stanley. Your line is open.

Hi. This is actually Hannah Pittock on for Simeon Gutman. Thanks for the time guys. My first question is on the incremental five center for Q4. I’m wondering if you can tell us anything about how the AUV ramp of the new centers has been trending? Are you seeing any acceleration there? And kind of related of the $5 million to $7 million incremental system-wide sales in the new guide, how we should think about the contribution from the extra five centers versus kind of carrying forward the current cost trends you’re seeing versus California starting to ramp. Thanks.

Hannah, I’ll start and then maybe ask Jennifer to lay on anything that I missed. So if you think about the 5 centers coming online in the fourth quarter, I think Jennifer touched on this. This won’t see anything material to fiscal year 2021, but we will get the full year benefit of these new centers in 2022. That’s kind of the first observation. With respect to how new center openings have performed in fiscal year 2021, we are very encouraged with the rate and pace of revenue build in their first few months. So hopefully, that addresses. Jen, I don’t know if there’s other comments you would make relative to the impact on 2021 or 2022?

Sure, Hannah. David Willis is exactly right, you know, in terms of just the timing of when those additional five will hit. We do look at that as being a really great thing for 2022. I would also say as we’ve consistently called out, though, in terms of the updated guides for full year 2021, we have talked about the last half purchases and have certainly seen a similar mix shift if you think about the next year playing out in our COGS is also playing out in the types of Wax Pass that’s being purchased. And that contribution has been a real good guide for us and is part of the guide upward for the balance of the year. We feel good about that at this point in time.

That’s very helpful. Thank you. Maybe one last quick one. You mentioned your ticket has come up in the quarter and some of that is mix shift. Obviously, we’re in an inflationary environment. Have you taken any price during the quarter? Or are there any plans to kind of above and beyond your typical annual level?

Yes, Hannah, we took price earlier in 2021 and do not have plans to take price in the quarter.

Got it. Thanks.

Thank you. Our next question or comment from the line of Jonathan Komp from Baird.

Yes. Hi. Thank you. I want to ask first, just could you maybe share a little bit more color of what you saw throughout the quarter thinking through consumer behavior and sort of the ebb and flow of some of the delta and other headlines. And as you sort of sit today and sort of a lower seasonal period, how do you think about sustaining the momentum both with existing and potential guests that you could reengage? I know you mentioned expecting sequential acceleration in the fourth quarter, but any more color behind that would be helpful.

John, thanks for the question. Listen, we continue to be very, very pleased with the demand side of our business. Our guests certainly came back as we relied these centers after getting out of the pandemic restrictions, and we continue to see that. And our guests are back into that nondiscretionary nature of their visits, making this part of the regular beauty and skin care regimen. And that’s one of the strongest aspects of our business model. As we talked about, we are really pleased with the amount of new guests we had into the system during the quarter, one in five coming from a competitor. We think that’s just a positive attribution to our brand as the leader folks are either going away from other brands, brands that weren’t able to reopen are gravitating towards European Wax Center. So equally important is retention aspect of that, while we don’t share specific numbers on that. We’re very pleased with both the attraction and retention numbers that we’re seeing, and we expect that to continue as we go forward. November and December are promotional months for us. So we, again, part of the reason that the guidance were that we feel really positive about the momentum that we have going into the quarter and that we will close here in the last seven weeks in the quarter.

Yes. Great. That’s really helpful. And then can I ask one more question as you look at your senior team, are there any positions that you expect to fill? And I noticed Jean Grossman may have recently left. So just any perspective on sort of the state of the team and any position do you expect to fill going forward?

This is probably the easy one for me to answer. Maybe I should let the others answer on this – we got a great team. Jean did a – Jean Grossman did a phenomenal job in helping us get to where we were in terms of our franchise operations, very, very mindful that we have an opportunity to lean out and restructure and aligned our development and our operations under David Willis, the COO. But this senior leadership team is one that I continue to be incredibly proud of and absolutely have tremendous faith as we think about the chapters ahead for us.

Okay. Great. Thanks, again.

Jonathan, thank you.

Thank you. Our next question or comment comes from the line of Bill Chappell from Truist Securities.

Thanks. Good afternoon. Just – I mean, obviously, with the reopening with California with everything, this is not the most easiest quarter to model. So Maybe can you talk where there’s some upside versus your internal expectations, what may be surprised you or up to the good or the bad and then how that can translate into what you’re looking at for the fourth quarter.

Sure. Hey, Bill, it’s Jen Vanderveldt. I think is a fair question and I think that my sense is on comp to try get at SKU on a seasonality basis. We have been consistent in talking about thoughtful, prudent growth as we look to model this business. We internally talk at the company about having our faith in this match. I think our forecasting process is equally kind of rigorous and robust on a monthly basis to kind of make sure we’re keeping ahead of all of the signals and signs we see in the business. I certainly think that for the balance of the year, it’s consistent with what I’ve said in the performance of the brand with the new guest counts that we’re seeing on an [indiscernible] basis has been strong. We continue to see that get purchasing of Wax Passes and we feel like that is going to continue to carry us through the balance of the year in the quarter. And my hope would be, you know, there could be, you know, a bit of upside. But I think as we see things today, we feel like we’ve been more thoughtful opinion and prudent and are excited about our full year outlook and happy to bring that outlook forward.

So things were fairly in line with what we expected 3, 4 months ago, no real changes there.

I would say, yeah. You know, I mean, I think what we did try and certainly, you know, to know we met with you all last time was that we do not have any type of demand issue. When we look at the business, we talked in our last quarter about some of the trends we were seeing in California. I would say California behaved deferentially and that was a bit of something we wanted to make sure disclosed to the investor community. I would think since then, it’s been a pretty steady state as we look at the business and how we think it’s going to take shape for the balance of the year.

And just a follow-up on that. As you look at the labor market for 2022, is there any pause in an ability to grow or keep the expansion targets? Just didn’t know – I know you have a different subset that’s looking for it, but certainly, wages all the way around are going up and it’s an extremely tight market. So I just didn’t know if it gives you some pause or some of your franchisees parts from expansion in the first half of the year with what we’re seeing in labor.

Bill, this is David Will. Let me take it first at this. So a couple of things there. With specific to California, franchisees are reporting an increase in both applications and an improved candidate flow. So we’re encouraged it’s heading in the right direction. We’re cleverly calling out California because it is lagging the rest of the country. With respect to rates, we continue to see our franchise needs to offer in certain markets, sign on bonuses and retention bonuses but it’s no higher than what it was the last couple of quarters. So I think on a broad scale, we’re fairly encouraged to deposits sort of cautionary California as a state is not performing as well as the rest of the country and to Jennifer’s point, we think that it’s much driven by some labor constraints and less so by consumers.

Yes. And Bill, I would just add. I mean, we’ve been really clear about our guidance on new unit growth of 7%, 10% of our base. We still feel very comfortable with that. We probably get some challenges can’t we accelerate that. And we think we’re being thoughtful in us about that. again, we just reemphasize that it’s so incredibly important for us to have that same brand experience at the delighting of the guests across all of our centers in the United States, and we are hiring license and professional trained expectations – And so we’re very comfortable, notwithstanding sort of the labor constraints we see and still be comfortable with that kind of guidance for unit growth in 2022 and beyond.

One last thing, Bill, you – I don’t think I touched on our paid this confidence. I should note the 47 net system added over the last 12 months, 23% have been added in California. So I think that signal some franchisees are confident and continuing to invest in the brands in the State of California.

No that’s great color. Thanks so much.

[Operator Instructions] Our next question or comment comes from the line of Kelly Crago from Citi. Your line is open.

Hi. Thank you for taking our question. Can you throw the color on the wax passes? Can you just remind us what the lifetime value of that Wax Pass customer is versus a non-Wax Pass customer is and what you’re doing to drive higher adoption in the Wax Pass? How does the new loyalty program play into your existing Wax Pass program? Thanks.

Go ahead, Jen.

Sure. Hi, Kelly, it’s Jen Vanderveldt. Really good question. We simply look at the Wax Pass program, the real differentiator for the brand because of the commitment that our guests are making to us. And again, approximately 50% of all of our services that are delivered are off of that last a purchase. And so as we kind of think about ways to move to guest down that path, we – it’s a big area of focus for us. And so when we think about lifetime value because we’re not disclosing publically, but we’re certainly looking to kind of make sure our guests understand the value of coming to EWC the frequency – optical frequency which has to come, we certainly know that there will be a very high correlation between our top quintile guests as we look at an RFM type segmentation and a Wax Pass forward. And those guests come here once a month. And so a loyalty program that just launched for us, coupled with the enhancements made to our app that avenue hub out to really give better visibility from a guest perspective to reward points, we can earn those points faster than before or certainly we certainly shows that under the previous loyalty program, guests were not aware of that programs. Many were not even aware that they have accumulated points. And so, we think, with the launch of this program, the marketing effort we’re putting behind it, we’re going to expect that guests are going to be motivated to both spend more and visit more over time. Both of those things correlate really well with why wouldn’t you buy a Wax Pass. And so, that’s part of the collective kind of guest experience. And then the digital enablement that we’re invested in and continue to invest in makes such as a frictionless experience for the guests. So, while not a direct answer on all aspects of your question as it relates to the CLTV, I certainly think we have a playbook that we are continuing to operationalize to expand CLTV with the guests and that’s what this brand is all about at the end of the day.

Great. Thanks. And just a question on the guidance for the fourth quarter in the comp acceleration. Is that, you know, is that due to continued improvement in California? I mean, you said you’re seeing some improvement but it’s still a pretty significant drag. So, just curious if that is what’s driving the improvement or if it’s sort of what’s going on in your existing markets or any other color you can provide there. And then when should we expect to see a material improvement in California? Is that something that you would expect to get better in 2022 or is it going to be sort of a longer-term drag? Thanks.

Yeah. Hey, Kelly. Those are great questions. And honestly, those are questions we continue to watch and monitor with great interest. California, while we say it’s kind of like a tale of two cities. California is not an alien state, and so we fully expect California to fall back in line. Right now, it is anywhere between 500 bps to, you know, 470 bps this quarter delta and we believe that that provides upside. I think you’ve also heard from both David Berg and David Willis that we’re working in close partnership with our franchisees to kind of make sure that California continues to, you know, look at opportunities to drive that supply, that lack of decisions and I think we feel like we’re off to a good start. That being said, I cannot collaborate, first of all, on how we went if that will be. But we would expect continuing convergence, I would say, as we look at the fiscal year 2022 as it relates to California, specifically. On our guidance, especially around comp, you know, I’ll continue to emphasize. Comp store is kind of the metric we absolutely watch. It’s a great, you know, marker for our business. But it’s really an output of this great business, you know. As we said last quarter and we’re not changing our guidance in terms of where we’ll be on the low end of the comp store range. Our longer-term high-single-digit range, you know, is something that we believe again with California falling in line will be above a high-single-digit range. And so, that impact of California is slowing in, you know, in the last kind of quarters. So, we can call it out and continuing to fall back in line. We see that opportunity. So, I would say, you know, we’re very pleased with our top-line momentum in this business. We’re very pleased with the fact that Wax Passes’ net redemptions, you know, are more than doubled. And so, we think that all of these are great signs and that it should set us up pretty well for a great momentum in 2022.

Great. Thank you.

Our next question or comment comes from the line of Dana Telsey from Telsey Advisory Group. Your line is open.

Good afternoon, everyone, and congratulations on the results. Just trying – relating back to Wax Pass for a second. When you think about new customer acquisition and your increased visits, is there any differential in terms of where you’re seeing Wax Pass adoption? Is it by region? Is it by franchisees? Is it fine service? Anything to call out in terms of how you’re looking at the data probably?

Yeah. Look, Dana. As we talked about, you know, when we were on the roadshow that the great thing about this brand is that it plays across the coast in Middle America. So, there isn’t a particular geography that’s driving sort of Wax Pass sales over another geography. We think that’s a very encouraging sign and we continue to make sure that we’ve got that offering, you know, to all our guests. We have seen – and we’ve talked about over the last couple of quarters that there is a mix shift because primarily – that we believe because of the mask mandates that there are more Wax Passes and more services that are being driven in full-body services. So, things like leg, bikini, or Brazilian. We see that potential as upside as mask mandates abate. That those guests that may be sidelined for facial services will come back in once those mask mandates abate. But we feel really, really good about the consistency with the Wax Pass purchases across the country.

And, Dana, I might add one other thing that when, you know, we talk about our long-range growth algorithm and what gets us really excited about this business is so much new center growth in front of it and all the work that we’re doing to go achieve that growth. And then the mature centers that we operate and the ongoing efforts we’re going to have to drive that great, strong guest behavior. I can tell you for mature centers from our cohort standpoint, they skew higher in terms of the percentage of their services performed on Wax Pass, which again convinces me that our operating playbooks are intact. We continue to – when we acquire the new guests into a mature center are those retained guests continue to be able to kind of discuss the economic benefits of the Wax Pass program and it’s good for the guests and good for the brand quite frankly.

Thanks. And just one quick thing on products. What is the niche new product introduction? How you’re thinking about products?

Yeah. Hey, Dana. So, we just introduced two new products here a couple of weeks ago. We’re really thoughtful about our innovative – innovation pipeline. I think it’s the franchise or it’s certainly our obligation to make sure that we keep things fresh. But we’ve talked with you all about our products are really an enhancement and a completion of the service. So, we’re not going to get into shampoo and body washes. We will always provide products for our franchisees and our guest service associates to sell – that help enhance the efficacy of the waxing service. And we’ve got a regular rhythm with our product development folks under Chris Kobus’ leadership that are really thoughtful about kind of bringing out new products that make sense for our guests. So, that continue to look for us to innovate and bring new products out in a fashion that makes sense for our network and for our guests.

Thank you.

Okay. Thanks, Dana.

Thank you. Our next question or comment comes from the line of John Heinbockel from Guggenheim. Your line is open.

Hey, John.

Hey, guys. Hey, how are you?

We’re good.

Well, I wanted to start with the rewards. When you think about the meaningful impact, is unlikely to be greater or higher sending cohorts, right, just in terms of where they can probably get three or four free services on redemptions. Do you think that’s the case, you know, in this – in the near to intermediate term? And then you basically gave a five percent discount. What’s the thought on that that, you know, a lot of people give a two percent cashback we see some cashback. So, you know, five kind of works economically given, you know, what you’re giving back to them.

Yeah, John. We’re really comfortable with the economic model for our guests. We think it’s rewarding enough. We think it’s going to drive the right kind of behavior for us. We launched the program a couple weeks ago, so obviously, still early days. But I think your premise is accurate. And certainly, we hope that, you know, the folks that buy more are going to get rewarded more and get rewarded faster. You know, we’re excited about the opportunity really to improve the visibility for both our guests and our associates. And again, early days have gotten great, great response both from our associates in terms of the simplicity of the program and from our guests about what this really does feel like a reward and are treated in a special manner. So, we’re – we think that we’ve, you know, that helps attract new. And last, yes, we’re seeing that loyalty program and the asset goes along with it for the first time. And we’re really, really excited about the early days and really excited about talking to you about it more in the future as we get more data on it.

The other thing I’d say, John, is, you know, certainly, a high-frequency user is going to be able to generate kind of a lot of value from this program. And other thing is will help us do and develop more of a less guest profile to that program. We talked about on the road with you it’s very important for us from a guest-behavior standpoint to offer that personalized experience. And so, we think that is also going to drive a lot of optimism to the program and ability for us to have system. Another lever when we think about how to make that a great guest experience around this brand. And so, it’s the next logical thing we felt like we needed to do. I love the fact that it’s paired with a great interface on guest experience in our mobile apps and I think that allows us to kind of think about what future innovation around that program looks like down the road.

And then maybe secondly, right, when you think about the tightness in the labor market. You know, are there ways to sort of benchmark, you know, you don’t want to impact service. So, if you think about labor productivity, right, in the centers, we used to benchmark best practices or engineer more productivity so maybe you need a little less institutional labor. Is there a way to do that without impacting service?

Yeah, John, listen. We’re – we continually look at how to, you know, if you think about a revenue optimization lens, right? So, how do we maximize the revenue that we’ve driven out of the wax we buy by individual wax specialists. What’s the gross margin return on labor? We’re opening a new kind – a new center here in North Dallas, where we’re going to have a little bit smaller footprint. We’re going to experiment with a four- to five-wax-week new center. We’re going to see how that goes. Certainly, as we came out of COVID with restrictions where there were capacity restrictions, we saw that some centers produced incredibly well with a smaller footprint. So, those are things that we continue to look at. We obviously look at our ability to make sure that we’ve got labor scheduling optimized. You know that we’ve got – through our POS system, the ability to double book. And by that, we mean that if a wax specialist can perform two services in 50 minutes, those are allowed to be booked over on top of each other so that they are a – make sure we get a great guest experience but it drive that efficiency from the wax specialist’s output. So, continue to look at how we optimize that and help our franchisees get to break even faster and get to a higher profitability from a four-wall standpoint as well.

Okay. Thank you.

All right, John. Thank you.

Thank you. I show no additional questions or comments in the queue at this time. I’d like to turn the conference back over to management for any closing remarks.

Thank you. Thank you very much and thank you, all, for joining us today. We certainly look forward to speaking with you when we report our fourth quarter results in March of next year. Thank you, all, very much.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.