What is the definition of 'Membership Attrition Rate' for a Bft studio, as used in Item 19?

According to Bft's 2025 Franchise Disclosure Document, the 'Membership Attrition Rate' is defined as the number of cancelled studio memberships during a specific calendar month, divided by the number of studio members at the end of the prior calendar month. This metric is used in Item 19, which covers Financial Performance Representations.

This definition is important for prospective Bft franchisees because it provides a clear understanding of how membership attrition is calculated. Attrition rate is a key performance indicator (KPI) for any membership-based business, as it reflects the rate at which members are leaving the studio. A high attrition rate can signal problems with member satisfaction, service quality, or overall value proposition.

Bft uses the Membership Attrition Rate to calculate average monthly attrition during the measurement period from January 1, 2024, to December 31, 2024, for qualified studios. The FDD states that the average monthly Membership Attrition Rate is calculated by determining the percentage of members that cancelled their memberships in a particular calendar month at each qualified studio. The annual Membership Attrition Rate for each qualified studio is then determined by a weighted average of each studio's monthly Membership Attrition Rate for the twelve months during the 2024 calendar year.

Understanding this definition and how Bft calculates and uses this rate can help potential franchisees evaluate the financial performance representations provided in Item 19 and assess the potential risks and rewards of investing in a Bft franchise.