WeightWatchers 2013 Annual Report Download - page 17

support long-term weight management through changes in behavior, eating, and exercise. We facilitate this
support through interactive meetings that encourage learning through group activities and discussions and
individual goal-setting. 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 10,000 leaders worldwide 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. For meetings, leaders are typically paid a
base rate (which varies based on geographic region), plus various types of commissions based on the number of
attendances and products sold. Leaders are also typically paid on an hourly basis (which varies based on the
nature of the task and their geographic region) for all of their non-meeting activities.
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. During the meeting, members are
encouraged to reflect on and share their learnings from the preceding week to get fresh ideas for addressing
challenges and be recognized for accomplishments both on the scale and behaviorally. The leader also facilitates
a group discussion about a pre-selected topic selected by us related to weight management, such as seasonal
eating triggers, emotional eating, planning, and self-monitoring. The leader encourages substantial participation
and discusses supporting products and digital tools as appropriate. At the end of each meeting, members
are encouraged to define a personal, short-term goal for the coming week. Immediately following each meeting,
new members are given an orientation to 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.
The primary payment structure for our meetings business globally is through a monthly commitment plan,
referred to as Monthly Pass in NACO and many other geographies. With Monthly Pass, members receive
unlimited access to meetings at a discounted monthly price plus free access to Weight Watchers eTools, the
Internet weight management companion for Weight Watchers meetings members. We offer the Monthly Pass
commitment plan in eleven countries, including the United Kingdom, Germany and Australia. Monthly Pass is
generally offered at an approximate 20% to 34% discount to our traditional “pay-as-you-go” weekly fee
depending on the country. For example, in the United States, Monthly Pass is sold for $42.95 per month
(approximately $9.91 per week) as compared to the average “pay-as-you-go” weekly fee of $14.00. 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.
The Company’s meetings business payment structure has shifted significantly in recent years toward
Monthly Pass. In fiscal 2013, on an aggregate basis across the markets where we offer Monthly Pass, well over
three quarters of our meeting paid weeks, and approximately three quarters of our member attendances, were
attributable to Monthly Pass. Our traditional payment structure in our meetings business is a “pay-as-you-go”
arrangement. Under this traditional method, 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.
As of the end of fiscal 2013, approximately 14% of our total worldwide attendance was represented by
franchised operations. We estimate that, in fiscal 2013, these franchised operations attracted attendance of
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