[CONTINUED]

The industry lies in the path of progress.
The health club industry-because it provides facilities and programs that prove to be a key factor in keeping people health, lean, strong and attractive-lies at he center of one particular path of progress. That path of progress is prevention.  Not only does the health club industry help people prevent heart disease, diabetes, hypertension, cancer, etc., but it is also now acknowledged that preventative health care (of which exercise is an integral part) is, from a public health perspective, equally if not more important than curative or recuperative health care.  It is also recognized that in order to stay lean, strong and energetic, a regimen of regular exercise is essential. Thus from a societal perspective as well as from an individual perspective, the health club industry is one of those industries that lie in the path of human progress!

The industry is the beneficiary of an increasingly health-conscious, weight conscious nation.
Numerous studies show that Americans prize health-their own, and that of their loved ones-as the most important value in their lives. It ranks higher than wealth, or friends, or a fine job, or a great education.

The industry enjoys significant equipment and landlord financing.
Because this is a fixed cost business, landlord financing can be a key success factor.  Landlords are looking to fill new retail malls and/or commercial buildings may be especially interested in health clubs as anchor tenants, due to the daily off-hours traffic clubs generate for retail areas and the amenity value of the club to other businesses.

The industry’s working capital requirements are stable.
Unlike other industries where working capital requirements increase as the business grows, in the health club industry, this is not the case. For example, as the business of a restaurateur or manufacturer grows, the business will be required to tie up more and more capital to service its expanding book of business.  In the health club industry on the other hand, once the club is developed [and achieving break even cash flow], working capital requirements do not significantly increase even as the membership grows…

The industry possesses a potent infrastructure.
Every physician, health educator, health journalist, health insurer, lifestyle columnist, school, university, and major medical institution…as well as the American Heart Association, the American Medical Association, the American Cancer Society, etc., are all advising their readers, patients, students and clients that regular exercise is vital to a healthy and productive life.

Today, every university in the country, both public and private, is providing its students with world-class fitness centers. This alone propels hundreds of thousands of [graduates] into fitness centers every year… and with respect to fitness…women have become more involved… than men. [In addition, the aging of that vast generation of Americans… the baby boomers… will increase the number of people who have a keen recognition of the benefits of exercise on prolonging the effects of aging].  These factors will have enormous impact on the U.S. health club industry for generations to come.”

[Conclusion… the health club and fitness center industry will have a robust future and enjoy strong and steady growth for at least the next ten years.]

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