Lifetime Fitness 2007 Annual Report Download - page 23

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If our founder and chief executive officer leaves our company for any reason, it could have a material adverse
effect on us.
Our growth and development to date have been largely dependent upon the services of Bahram Akradi, our
Chairman of the Board of Directors, Chief Executive Officer and founder. If Mr. Akradi ceases to be Chairman of
the Board of Directors and Chief Executive Officer for any reason other than due to his death or incapacity or as a
result of his removal pursuant to our articles of incorporation or bylaws, we will be in default under the loan
documents for our 13 centers financed with TIAA. As a result, Mr. Akradi may be able to exert disproportionate
control over our company because of the significant consequence of his departure. We do not have any employment
or non-competition agreement with Mr. Akradi.
The health club industry is highly competitive and our competitors may have greater name recognition than we
have.
We compete with other health and fitness centers, physical fitness and recreational facilities established by local
non-profit organizations, governments, hospitals, and businesses, local salons, cafes and businesses offering similar
ancillary services, and to a lesser extent, amenity and condominium clubs and similar non-profit organizations,
exercise studios, racquet, tennis and other athletic clubs, country clubs and the home fitness equipment industry.
Competitors, which may have greater name recognition than we have, may compete with us to attract members in
our markets. Non-profit and government organizations in our markets may be able to obtain land and construct
centers at a lower cost than us and may be able to collect membership fees without paying taxes, thereby allowing
them to lower their prices. This competition may limit our ability to increase membership fees, retain members,
attract new members and retain qualified personnel.
Competitors could copy our business model and erode our market share, brand recognition and profitability.
We cannot assure you that our competitors will not attempt to copy our business model, or portions thereof, and that
this will not erode our market share and brand recognition and impair our growth rate and profitability. In response
to any such competitors, we may be required to decrease our membership fees, which may reduce our operating
margins and profitability.
We have significant operations concentrated in certain geographic areas, and any disruption in the operations of
our centers in any of these areas could harm our operating results.
We currently operate multiple centers in several metropolitan areas, including 25 in the Minneapolis/ St. Paul
market, eight in the Chicago market, seven in the Dallas market, and six in the Detroit market, with continued
planned expansion in current and new markets. As a result, any prolonged disruption in the operations of our centers
in any of these markets, whether due to technical difficulties, power failures or destruction or damage to the centers
as a result of a natural disaster, fire or any other reason, could harm our operating results. In addition, our
concentration in these markets increases our exposure to adverse developments related to competition, as well as
economic and demographic changes in these areas.
If we cannot retain our key personnel and hire additional highly qualified personnel, we may not be able to
successfully manage our operations and pursue our strategic objectives.
We are highly dependent on the services of our senior management team and other key employees at both our
corporate headquarters and our centers, and on our ability to recruit, retain and motivate key personnel. Competition
for such personnel is intense, and the inability to attract and retain the additional qualified employees required to
expand our activities, or the loss of current key employees, could materially and adversely affect us.