How does Bft calculate the average monthly Membership Attrition Rate?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Additional Definitions (Part C)
● "Membership Attrition Rate" means the number of cancelled Studio memberships during a particular calendar month divided by the number of Studio members at the end of the prior respective calendar month.
Data Set and Methodology (Part C)
The chart above reflects the average monthly Membership Attrition Rate during the Measurement Period (i.e., January 1, 2024 to December 31, 2024) for the 29 Qualified Studios.
We calculated the average monthly Membership Attrition Rate as follows: (a) we calculated the Membership Attrition Rate for each calendar month during the Measurement Period for each such Qualified Studio by calculating the percentage of members that cancelled their memberships in a particular calendar month at each such Qualified Studio; then (b) we calculated an annual Membership Attrition Rate for each such Qualified Studio by determining a weighted average of each such Qualified Studio's Membership Attrition Rate for the twelve months during the 2024 calendar year by allocating weight to the particular month's Membership Attrition Rate based on the number of members that such Qualified Studio had during that month (for example, if a Qualified Studio had 200 members as of January 31, 2024 and had 300 members as of February 29, 2024, the Qualified Studio's Membership Attrition Rate for February 2024 was weighted 1.5 times greater than the Qualified Studio's Membership Attrition Rate for January 2024, as a 300 membership base is 1.5 times greater than a 200 membership base); then (c) we calculated a simple average of all such Qualified Studios' weighted average monthly Membership Attrition Rate to determine the average Monthly Membership Attrition Rate for all 29 Qualified Studios noted above. We also show the range and median of Monthly Membership Attrition Rates for such Qualified Studios.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 67–75)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Membership Attrition Rate is a key performance indicator, representing the rate at which members cancel their studio memberships. Bft defines "Membership Attrition Rate" as the number of cancelled Studio memberships during a particular calendar month divided by the number of Studio members at the end of the prior respective calendar month. This metric is crucial for assessing the retention of members and the overall health of the franchise. The average monthly Membership Attrition Rate was calculated using data from January 1, 2024, to December 31, 2024, for 29 "Qualified Studios".
The calculation involves several steps. First, Bft determined the Membership Attrition Rate for each calendar month for each of the 29 Qualified Studios. Then, an annual Membership Attrition Rate was calculated for each studio by determining a weighted average of each studio's monthly attrition rates. The weighting was based on the number of members the studio had each month; for example, a month with 300 members would be weighted 1.5 times greater than a month with 200 members. Finally, Bft calculated a simple average of all the weighted average monthly Membership Attrition Rates across the 29 Qualified Studios to arrive at the average Monthly Membership Attrition Rate.
For a prospective Bft franchisee, understanding this calculation is essential. It provides insight into how Bft evaluates the performance of its studios and what factors are considered important. The weighting of monthly attrition rates based on membership size indicates that Bft places greater emphasis on retaining a larger membership base. This methodology ensures that the attrition rate accurately reflects the studio's ability to maintain and grow its member base over time.
It is also important to note that Bft provides the range and median of Monthly Membership Attrition Rates for the Qualified Studios, offering a more complete picture of performance variation across different locations. This allows potential franchisees to benchmark their own performance against existing studios and understand the potential variability in attrition rates. Prospective franchisees should consider these factors when evaluating the financial projections and potential profitability of a Bft franchise.