WeightWatchers 2015 Annual Report Download - page 6

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The primary payment structure for our meetings business globally is through monthly commitment plans.
Under these plans, members generally receive unlimited access to meetings at a discounted monthly price plus
free access to certain Online and mobile tools and 24/7 Expert Chat, where available. Pursuant to these plans, a
fee is typically charged automatically to the member’s credit card or debit card on a monthly basis until the
member elects to cancel. As of the end of fiscal 2015, we had approximately 1.0 million active subscribers to our
monthly commitment plans. We also have a “pay-as-you-go” arrangement for the meetings business and, in some
countries, offer prepayment plans for meetings consisting of pre-paid meeting vouchers and coupons.
In fiscal 2015, we had total meeting attendance of approximately 31.8 million, which does not include
management’s estimate that franchised operations had total meeting attendance of over 3.8 million. 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. Our franchisees are responsible for operating classes in their franchise class territory using
the program and marketing guidelines we have developed. We provide a central support system for the program
and our brand. In many of our markets, franchisees purchase products from us at wholesale prices for resale
directly to members. Franchisees are obligated to adhere strictly to our program content guidelines, with the
freedom to control pricing, class locations, operational structure and local promotions. Franchisees provide local
operational expertise, advertising and public relations. Most franchise agreements are perpetual and can be
terminated only upon a material breach or bankruptcy of the franchisee.
Our Online Business
In our Online business, we offer various digital subscription products, including Weight Watchers
OnlinePlus and a weight management companion for Weight Watchers meetings members who want to digitally
manage the day-to-day aspects of their weight management plan. These products provide interactive and
personalized resources that allow users to follow our weight management plan via the Internet or on their mobile
device. In December 2014, we launched an Online subscription product, Personal Coaching, in certain of our
markets, including the United States. Personal Coaching offers one-on-one telephonic, e-mail and text support
and personalized planning from a Weight Watchers-certified Coach as well as access to other Online tools.
Our Online subscription products are based on the Weight Watchers approach to weight management and
provide additional tools to our meetings members, as applicable. They help subscribers adopt a healthier and
more active lifestyle, with a view toward long-term behavior modification—a key aspect of the Weight Watchers
approach toward sustainable weight loss. These products provide subscribers with online and mobile content,
functionality, resources and interactive mobile and web-based weight management plans. We believe our
personalized and interactive Online subscription products give subscribers an engaging weight management
experience. Our online community, which can be accessed via the web and the new Connect feature in our
mobile app, gives our subscribers a way to stay virtually connected, and support and motivate each other.
We believe that mobile weight management tools and resources are an important market opportunity for us.
Our mobile phone (iPhone®and Android™) and iPad®apps provide monthly commitment plan purchasers and
Online subscribers with access to a suite of weight-loss tools, such as recipe and tracking tools, as well as other
helpful content and the ability to scan the barcodes of food products for their SmartPoints values. We are
continuing to improve the capabilities of our products, including integrating with popular activity-
tracking devices and wireless weight scales.
Our Product Sales
We sell a range of products, including bars, snacks, cookbooks, food and restaurant guides with SmartPoints
values, Weight Watchers magazines, SmartPoints calculators and fitness kits, and certain third-party products,
such as activity-tracking monitors. These products complement our weight management program and help our
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