WeightWatchers 2004 Annual Report Download - page 9

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PART I
Item 1. Business
We are a leading global branded consumer company and the global leader in providing healthy
weight management services, operating in 30 countries around the world for over 40 years. Our
programs help people lose weight and maintain a healthy weight and, as a result, improve their health,
enhance their lifestyles and build self-confidence. At the heart of our business are weekly meetings,
which promote weight loss through education and group support in conjunction with a flexible, healthy
diet and exercise method. Each week, approximately 1.5 million people attend approximately 46,000
Weight Watchers meetings around the world, which are run by approximately 15,300 classroom leaders.
Our classroom leaders teach, inspire, motivate and act as role models for our members.
We conduct our business through a combination of company-owned and franchise operations, with
company-owned operations accounting for approximately 78% of total worldwide attendance in 2004.
In the 1960’s, we pursued an aggressive franchising strategy with respect to our classroom operations to
rapidly grow our geographic presence and build market share. We believe that our early franchising
strategy was very effective in establishing our brand as the world’s leading weight-loss program.
We have experienced strong growth in sales and profits since we made the strategic decision to
re-focus our meetings exclusively on our group education approach. We discontinued the in-meeting
sale of pre-packaged frozen meals added in 1990 in North American company-owned, or NACO,
operations, by our previous owner and modernized our program to adapt it to contemporary lifestyles.
Our members typically enroll to attend consecutive weekly meetings and have historically
demonstrated a consistent re-enrollment pattern across many years. We believe that our members’
repeat enrollment and attendance patterns and our large existing member base together with the
growth in first time members represent strong potential for future growth. We also believe that we can
expand our customer base by developing new products and services designed to meet the needs of a
broader audience.
Our Billion Dollar Brand
Weight Watchers is the leading global weight-loss brand with retail sales of over $2.5 billion in 2004,
including sales by licensees and franchisees, and nearly universal awareness among women in the U.S.
We have built our business and brand on the following core principles:
Effective Clinically proven
Healthy Medically recommended
Supportive Helping members help each other
Flexible Compatible with modern lifestyles
Balanced Not just a diet, an approach to life
Weight Watchers Meetings
We present our program in a series of weekly classes of approximately one hour in duration.
Classes are conveniently scheduled throughout the day. Typically, we hold classes in either meeting
rooms rented from civic or religious organizations or in leased locations.
In our classes, our leaders present our program, which combines group support and education with
a structured approach to food, activity and lifestyle modification developed by credentialed weight-loss
experts. Our 15,300 classroom leaders run our meetings and educate members on the Weight Watchers
method of successful and sustained weight loss. Our leaders also provide inspiration and motivation for
1