Catalogs are typically printed in full color with an attrac- tive selling presentation highlighting product benefits and features. 

Franklin Covey maintains a client service department which clients may call toll-free, 24 hours a day, Monday through Saturday, to inquire about a product or to place an order. Through Franklin Covey’s computerized order entry system, client representatives have access to client preferences, prior orders, billings, shipments and other information on a real-time basis. Each of the Company’s more than 350 customer service representatives has the authority to immediately solve any client service problem. 

Franklin Covey utilizes a zone picking system for processing orders. This system enables the Company to respond rapidly to client orders. Client information stored within the order entry system is also used for additional purposes, including target marketing of specific products to existing clients and site selection for Company retail stores. Franklin Covey believes that its order entry system helps assure client satisfaction through both rapid delivery and accurate order shipment. 

Retail Stores. Beginning in late 1985, Franklin Covey began opening retail stores in areas of high client density. The initial stores were generally located in lower traffic destination locations. The Company has since adopted a strategy of locating retail stores in high-traffic retail centers, primarily large shopping malls, to serve existing clients and to attract increased numbers of walk- in clients. Franklin Covey believes that higher costs associated with locating retail stores in these centers have been offset by increased sales in these locations. Franklin Covey’s retail stores, which average approxi- mately 2,000 square feet, are stocked almost entirely with Franklin Covey products. The Company’s retail stores strategy focuses on providing exceptional client service at the point of sale. Franklin Covey believes this approach increases client satisfaction as well as the frequency and volume of purchases. At August 31, 2000, Franklin Covey had 135 domestic retail stores located in 36 states and the District of Columbia. 

Franklin Covey attracts existing clients to its retail stores by informing them of store openings through direct mail advertising. The Company believes that its retail stores encourage walk-through traffic and impulse-buying and that store clients are a source of participants for Franklin Covey’s public seminars. The stores have also provided the Company with an opportunity to assess client reaction to new product offerings. Portions of Franklin Covey’s Productivity In The Digital Age train- ing modules are taught within the stores. Some of the retail stores have been remodeled to accommodate small 

groups taking these modularized training programs. 

Franklin Covey believes that its retail stores have a high- end image consistent with its marketing strategy. Franklin Covey’s products are generally grouped in sections supporting the different sizes of the Franklin Planner. Products are attractively presented and displayed with an emphasis on integration of related products and accessories. Stores are staffed with a manager, an assistant manager and additional sales personnel as needed. Franklin Covey employees have been trained to use the original Franklin Planner, as well as its various electronic versions, enabling them to assist and advise clients in selection and use of the Company’s products. During peak periods, additional personnel are added to promote prompt and courteous client service. 

Other Channels. The Company has an alliance with the At-A-Glance® group to sell its products through the category contract stationer channel. At-A-Glance® wholesales other products to contract stationer businesses such as Boise Cascade, Office Express and Staples, which in turn sell office products through catalog order entry systems to businesses and organiza- tions. The Company signed an agreement to have At-A- Glance® represent a selected Franklin Planner product line through this office products channel. The Company believes that additional revenues have more than offset the anticipated lower margins from selling product through this channel. 

Domestic Training and Education Sales. Franklin Covey’s sales professionals market the Company’s training, consulting and measurement services to institutional clients and public seminar clients. 

Franklin Covey employs 140 sales professionals located in eight major metropolitan areas throughout the United States and sell training services to institutional clients. Franklin Covey employs an additional 58 sales profes- sionals outside of the United States. Sales professionals must have significant selling experience prior to employ- ment by the Company and are trained and evaluated at Franklin Covey and in their respective sales territories during the first six months of employment. Sales profes- sionals typically call upon persons responsible for corporate employee training, such as corporate training directors or human resource officers. Sales professionals work closely with training consultants in their territories to schedule and tailor seminars and workshops to meet specific objectives of institutional clients. 

Franklin Covey also employs 115 training consultants throughout the United States who present institutional 

