WeightWatchers 2011 Annual Report Download - page 21

similar weight management challenges. This group support provides the reassurance that no one must overcome
their weight management challenge alone. Group support assists members in dealing with issues such as
emotional eating and finding time to exercise. We facilitate this support through interactive meetings that
encourage learning through group activities and discussions.
In our meetings, our leaders present our program in a manner that combines group support and education
with a structured approach to food, activity and lifestyle modification developed by credentialed weight
management experts. Our more than 12,000 leaders run our meetings and educate members on the Weight
Watchers method of successful and sustained weight management. Our leaders also provide inspiration and
motivation for our members and are examples of our program’s effectiveness because they have lost weight and
maintained their weight loss on our program. Leaders are usually paid on a commission basis.
Meetings typically begin with registration and a confidential weigh-in to track each member’s progress.
Leaders and receptionists are trained to engage the members at the weigh-in to talk about their weight
management efforts during the previous week and to provide encouragement and advice. Part of the meeting is
educational, where the leader uses personal anecdotes, games or open questions to demonstrate some of our core
weight management strategies, such as self-belief and self-discipline. For the remainder of the meeting, the
leader focuses on a variety of topics pre-selected by us, such as seasonal weight management topics,
achievements people have made in the prior week and celebrating and applauding individual successes.
Discussions can range from dealing with a holiday office party to shopping for healthy foods. The leader
encourages substantial participation and discusses supporting products and materials as appropriate. At the end of
the meeting, new members are given special introductory instruction in our current weight management plans.
Our leaders help set a member’s weight goal within a healthy range based on body mass index. When
members reach their weight goal and maintain it for six weeks, they achieve lifetime member status. This gives
them the privilege to attend our meetings free of charge as long as they maintain their weight within a certain
range. Successful members also become eligible to apply for positions as leaders. Field management and current
leaders constantly identify potential new leaders from members who have strong interpersonal skills.
Our traditional payment structure in our meetings business had been a “pay-as-you-go” arrangement. A new
member pays an initial registration fee and then a weekly fee for each meeting attended, although free
registration is offered as a promotion during certain times of the year. We also offer prepayment plans consisting
of pre-paid meeting vouchers and coupons in some countries.
In fiscal 2006, we introduced the Monthly Pass commitment plan in NACO. We subsequently introduced
Monthly Pass in eight additional markets, including the United Kingdom, Germany and Australia. Monthly Pass
is generally offered at an approximate 20% to 25% discount to the typical “pay-as-you-go” weekly fee depending
on the country. Under the terms of Monthly Pass, a fee is charged automatically to the member’s credit or debit
card on a monthly basis until the member elects to cancel. Monthly Pass is available for purchase throughout the
year. As part of Monthly Pass, members receive unlimited access to meetings at this discounted monthly price
plus free access to Weight Watchers eTools, the Internet weight management companion for Weight Watchers
meetings members. The Company’s payment structure has shifted significantly in recent years toward Monthly
Pass. In fiscal 2011, on an aggregate basis across the markets where we offer Monthly Pass, nearly three quarters
of our member attendances, and well over three quarters of our meeting paid weeks, were attributable to Monthly
Pass.
As of the end of fiscal 2011, less than 17% of our total worldwide attendance was represented by franchised
operations. We estimate that, in fiscal 2011, these franchised operations attracted attendance of approximately
11 million people. Franchisees typically pay us a fee equal to 10% of their meeting fee revenues. We have
enjoyed a mutually beneficial relationship with our franchisees over many years. In our early years, we used an
aggressive franchising strategy to quickly establish a meeting infrastructure to pre-empt competition. Since then,
we have acquired a large number of franchises and expect to continue to do so opportunistically.
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