11. Billed vs. Collected Rates (Average) Club Size Active Members Average Collection Rate Low Mean (Average Collection Rate of Clubs with Collection Rates Lower than the Overall Average) High Mean (Average Collection Rate of Clubs with Collection Rates Higher than the Overall Average) < 100 94% 72.3% 99.4% 101 – 500 92% 62.8% 99.7% 501 – 1000 90% 57.0% 99.1% 1001 – 5000 97% 89.7% 99.0% 5001 – 10000 96% 89.6% 98.4% > 10000 96% 89.5% 98.7%
23. Example of an Increase in Profitability – Nutrition/Weight Management Division Variables: New clients per month Supplements 35 Weight Mgt 11 Supplement Fees: Enrollment $ 75 On-going $ 45 Monthly Attrition 10% Weight Management Fees $ 315 Annual Increase in EBITDA (Beginning 3rd Year): Revenue $ 315,917 Expenses 160,759 Annual EBITDA $ 155,157 System One-time setup Costs: $ 9,545
24. Example of an Decrease in Expenses – Time & Attendance System (Biometric) Variables: 50 employees $10 per hour wage 1% error factor $1,000 setup fee $2.50 per month per employee fee Annual Savings due to accuracy/labor reduction Human Error Factor Savings $ 309 Auditing Savings 50 Corrected Time & Leave 10 Data Entry Savings 25 Lost Time Savings 267 Gross Weekly Savings $ 661 Gross Annual Savings $ 34,353 System Costs Setup (one time) $ 1,000 Annual On-going: Employee Fee 1,500 Time clock rental 2,400 Total Costs (first year) $ 4,900 Net Savings (first year) $ 29,453 Net Annual Savings $ 30,453
25. Example of an Decrease in Expenses – Business Intelligence (Replace Excel) Variables: Hourly rates Regional Ops $ 29 per hour GM $ 37 per hour OM $ 11 per hour Note: includes 10% increase for taxes and benefits Time allotment Ongoing Regional Ops 4 hr per month per gym General Mgr 15 hr per month per gym Operations Mgr 30 hr per month per gym Annual Savings Due to reduction in labor: Regional Ops $ 116 GM $ 555 OM $ 330 Monthly Savings $ 1,002 Annual Savings $ 12,020 Does not take into account intangible benefits from real-time visibility into the gym's performance or value created by allowing employees to use their time to service members or sell memberships.
26. Example of an Decrease in Expenses – Billing Fees Variables: Annual Dues $ 1,200,000 Billing Fees 5% Fee Reduction 10% Annual Savings $ 6,000
27.
28. Summary - Impact to Value of Business Category Improvement Nutrition/Weight Mgt Division $ 155,157 Time & Attendance System 30,453 Business Intelligence 12,020 Reduction in Billing Fees 6,000 Annual Improvement to EBITDA $ 203,630 Purchase multiple of 4 times $ 814,520 Less: System implementation Costs (10,545) Increased Gym Value $ 803,975
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