OPPORTUNITIES

IN A
GROWING MARKET
SNAP Fitness is disrupting the middle-market fitness
industry by offering a competitively priced membership in a
no-frills environment available around-the-clock.

The fitness industry has grown over 5% each year since

2010 and is projected to experience exponential growth.
Franchise, investment, and licensing opportunities are
available in North America, Asia, and the Middle East.

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Snap Fitness is open 24/7, offering access to Most fitness centers today are not open 24/7,
the entire market, not only those with a limiting themselves to the late night workout
normal fitness schedule. and early morning fitness enthusiasts.

Snap Fitness charges affordable fees that Many fitness centers charge premium prices
make it accessible to the entire population, for the same fitness equipment and locations
with no price discrimination. hence charging unjustified fees.

Snap Fitness has a very strict cleaning policy Many fitness centers are not properly
to ensure that the quality control is properly maintained with no string operations
achieved and maintenance is monitored. procedure by the staff to ensure quality.

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SNAP
24 HOUR
FITNESS
CENTER
ANNY STARK
Anny is the VP of marketing at
SNAP, she yields over 20 years of
experience in the fitness industry
including Crunch, Bally, and Total.
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TONY BROWN
Tony is the VP of operations, he has
over 10 years of experience work as
a consultant at McKinsey & Co. and
prior to that, at PWC.
ANDY FREEMAN
Andy is the CEO of Snap Fitness,
he has managed the company since
inception and prior to that, managed
several leading fitness franchises.
BILL MODARE
Bill is the VP of franchising, he
formerly works as the SVP at
Franchise Gator and several other
franchise brokerage firms.
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AMY PARKS
Amy is the general counsel of Snap
Fitness, she represents the
company in litigious and contractual
matters concerning the company.
STEVE JONES
Steve is the VP of sales & business
development He has over thirty
years of experience as a sales
professional across three continents.
 SNAP
FITNESS
STRATEGY

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 GET FIT.
FEEL GOOD.
BE WELL.
Snap intents to grow in-part through newly
implemented digital marketing efforts in select
existing locations.

Snap will continue to franchise new locations in the

United States, Middle-East, and Latin America.

The company will engage in public relations and

influencer sponsorships for the target locations to
create brand awareness and retention.

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Marketing Growth Member Acquisition Franchise Growth
Investments into overall brand New members will be acquired at Aggressive franchise solicitation,
awareness will be done through the existing locations with an especially in emerging markets
PR and digital advertisements. emphasis on corporate locations. will take place to grow members.

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 Snap Fitness has launched over
1 30,000 franchise locations
worldwide since its inception.

The franchise opportunity is

flexible, yet offers an easy way to
2
start a business with little
investment.

The global franchise director will

3 continue to identify the most
profitable locations for franchisees.

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 The efforts applied towards digital marketing and public
relations through the use of influencers has led to an 8%
growth increase from FY 2010 2011 and a 15%
increase from FY 2013 2014. The growth is projected to
continue as the medium continues to grow more
influential and play a more decisive role in the factors
weighted by consumers in their everyday decisions.
Likewise, the demand for franchises will grow at similar
rates with more profitable franchise opportunities.

+8% +15%

2014
2011
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 RECENT
GROWTH
METRICS

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125
AVERAGE
MEMBERSHIP PER
100
CENTER IS GROWING
75
The members per facility has been increasing over
the past four months due to the increased effort of
50 digital marketing for each local franchise.

25
The dropout rate of members has declined overall in
the past five years due to stricter cleaning and
management policies.
0
April May June July Word of mouth marketing has improved and now
accounts for over 24% of new membership referrals.

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 In addition to the growth in members
2014 per facility, the number of facilities
has been growing year-over-year
due to ongoing franchise initiatives
2015 and international expansion goals.
The red outlines the growth of
facilities in the United States and the
2016
grey indicates the growth of facilities
internationally. Emerging markets
and new developments in suburban
areas grants the opportunity for
2017 Snap Fitness to continue its
historical growth trajectory into the
0 50 100 150 200 250 foreseeable future.

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+25%

+91%

+25%
+12%
+71%

+91%
+45%

+12%
+12%

+91%
+46%

+88%
Growth by market region
over the past five years,
emphasis is being placed

+78%
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 20 JAN
As of January 20, the company has generated
an increase of 15% in memberships each month
over the past year, resulting in a 5% increase in
revenue for franchisees.
15 FEB
On February 15 on this year, Snap Fitness
signed an agreement with over 250 small to mid-
size personal trainer studios to work at the Snap
Fitness locations exclusively.
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25 AUG
On August 25 of this year, Snap Fitness invested
money into its national digital marketing
campaign to generate more awareness of the
brand and distinguish itself in the market.
12 OCT
On October 12 of this year, Snap Fitness
corresponded with strategic partners in Brazil,
Columbia, and five other Latin American
counties to facilitate LATAM expansion.
 Snap Fitness offers 24/7
access to its locations,
targeting a new market to
compete against all other
gyms with restrictive
hours.
2011
Snap Fitness begins its
franchise expansion in
the United States by
extending opportunities
for ownership to third
parties.
Snap Fitness shifts more
towards the franchise
model by removing some
corporate owned stores
in order to allow for faster
growth.

2013

2015

2017
2012

2014

The Snap Fitness brand
expands to 20 major US
cities and over 50
suburbs and targets
international expansion.
2016
Snap Fitness expands
into two other counties
with corporate owned
locations to test the new
business model.
Snap begins aggressive
digital marketing and
public relations
campaigns to increase
market share of existing
locations.

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 FINANCIAL
ESTIMATE
(FY 17-21)

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 Projected Operating Highlights By Year ($ MM) Projected Revenues By Year ($ MM)
2500 2500

2000 2000

1500
1500

1000
1000

500
500

0
Year 1 Year 2 Year 3 Year 4 Year 5
0
Revenue Gross Margin EBITDA Net Profit Year 1 Year 2 Year 3 Year 4 Year 5

Projected Cash Flow By Year ($ MM) Projected Net Income By Year ($ MM)
4000 1000

3500 900

800
3000
700
2500
600
2000
500

1500
400

1000 300

500 200

100
0
Year 1 Year 2 Year 3 Year 4 Year 5
0
Net Cash Flow Cash Balance Year 1 Year 2 Year 3 Year 4 Year 5

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 Pro Forma Profit and Loss ($ MM)
Year 1 Year 2 Year 3 Year 4 Year 5

Total Revenue 1,343,231 1,877,608 1,990,265 2,109,681 2,236,261

Subtotal Cost of Revenue 184,566 257,992 273,471 289,880 307,273
Total Cost of Revenue $ 184,566 $ 257,992 $ 273,471 $ 289,880 $ 307,273

Gross Margin $ 1,158,665 $ 1,619,616 $ 1,716,793 $ 1,819,801 $ 1,928,989

Gross Margin/Revenue 86% 86% 86% 86% 86%

Expenses
Rent 60,000 63,000 66,150 69,458 72,930
Utilities 6,000 6,300 6,615 6,946 7,293
Marketing 81,300 187,761 199,026 210,968 223,626
Office Expenses 3,000 3,150 3,308 3,473 3,647
Misc. SG&A 335,808 469,402 497,566 527,420 559,065
Insurance 1,500 1,575 1,654 1,736 1,823
IT Expenses 6,000 6,300 6,615 6,946 7,293
Locker Related 12,000 12,600 13,230 13,892 14,586
Cleaning Supplies 7,500 7,875 8,269 8,682 9,116
Repairs & Maintenance 3,744 3,931 4,128 4,334 4,551
Travel & Accomodation 900 945 992 1,042 1,094
Legal/Professional Fees 2,400 2,520 2,646 2,778 2,917
Health & Safety Expenses 900 945 992 1,042 1,094
Telephone/Internet 600 630 662 695 729
Security 480 504 529 556 583
Total Operating Expenses $ 522,132 $ 767,438 $ 812,382 $ 859,967 $ 910,349
Wages & Payroll 119,650 133,653 137,663 141,793 146,047
Depreciation, Amortization & Taxes - - - - -
Net Income $ 516,883 $ 718,525 $ 766,749 $ 818,041 $ 872,594
Net Income/Revenue 38% 38% 39% 39% 39%

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 Pro Forma Cash Flow ($ MM)
Year 1 Year 2 Year 3 Year 4 Year 5
Beginning Cash Balance $ - $ 542,636 $ 1,261,161 $ 2,027,910 $ 2,845,952
Cash Inflows
Income from Sales $ 1,343,231 $ 1,877,608 $ 1,990,265 $ 2,109,681 $ -
Accounts Receivable $ - $ - $ - $ - $ -
Total Cash Inflows $ 1,343,231 $ 1,877,608 $ 1,990,265 $ 2,109,681 $ 2,236,261

Cash Outflows

Investing Activities
New Fixed Assets Purchases $ - $ - $ - $ - $ -
Inventory Addition to Bal.Sheet $ - $ - $ - $ - $ -
Cost of Sales $ 184,566 $ 257,992 $ 273,471 $ 289,880 $ 307,273

Operating Activities
Salaries and Wages $ 119,650 $ 133,653 $ 137,663 $ 141,793 $ 146,047
Fixed Business Expenses $ 522,132 $ 767,438 $ 812,382 $ 859,967 $ 910,349
Taxes $ - $ - $ - $ - $ -

Financing Activities
Loan Payments
Line of Credit Interest
Line of Credit Repayments
Dividends Paid
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -

Total Cash Outflows $ 826,347.98 $ 1,159,083.27 $ 1,223,515.92 $ 1,291,639.10 $ 1,363,667.88

Cash Flow $ 516,883.38 $ 718,524.92 $ 766,748.77 $ 818,041.47 $ 872,593.52
Operating Cash Balance $ 542,636.45 $ 1,261,161.38 $ 2,027,910.15 $ 2,845,951.62 $ 3,718,545.14
Ending Cash Balance $ 542,636.45 $ 1,261,161.38 $ 2,027,910.15 $ 2,845,951.62 $ 3,718,545.14

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 Profit & Loss ($ MM)
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Revenue 49,125 55,511 62,728 142,528 142,528 142,528 142,528 142,528 128,275 123,144 105,904 105,904
Subtotal Cost of Revenue 6,750 7,628 8,619 19,584 19,584 19,584 19,584 19,584 17,626 16,921 14,552 14,552
Total Cost of Revenue $ 6,750 $ 7,628 $ 8,619 $ 19,584 $ 19,584 $ 19,584 $ 19,584 $ 19,584 $ 17,626 $ 16,921 $ 14,552 $ 14,552

Gross Margin $ 42,375 $ 47,884 $ 54,109 $ 122,944 $ 122,944 $ 122,944 $ 122,944 $ 122,944 $ 110,650 $ 106,224 $ 91,352 $ 91,352
Gross Margin/Revenue 86% 86% 86% 86% 86% 86% 86% 86% 86% 86% 86% 86%

Expenses
Rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Utilities 500 500 500 500 500 500 500 500 500 500 500 500
Marketing 10,000 10,000 10,000 5,700 5,700 5,700 5,700 5,700 5,700 5,700 5,700 5,700
Office Expenses 250 250 250 250 250 250 250 250 250 250 250 250
Misc. SG&A 27,984 27,984 27,984 27,984 27,984 27,984 27,984 27,984 27,984 27,984 27,984 27,984
Insurance 125 125 125 125 125 125 125 125 125 125 125 125
Total Operating Expenses $ 46,736 $ 46,736 $ 46,736 $ 42,436 $ 42,436 $ 42,436 $ 42,436 $ 42,436 $ 42,436 $ 42,436 $ 42,436 $ 42,436

EBIT $ (4,361) $ 1,148 $ 7,373 $ 80,508 $ 80,508 $ 80,508 $ 80,508 $ 80,508 $ 68,214 $ 63,788 $ 48,916 $ 48,916
EBIT/Revenue -9% 2% 12% 56% 56% 56% 56% 56% 53% 52% 46% 46%

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 Year 1 Cash Flow ($ MM)
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Received

Revenue
$ 49,125.0 $ 55,511.3 $ 62,727.7 $ 142,528.0 $ 142,528.0 $ 142,528.0 $ 142,528.0 $ 142,528.0 $ 128,275.2 $ 123,144.2 $ 105,904.0 $ 105,904.0
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Sale of Other Current Assets

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 49,125.0 $ 55,511.3 $ 62,727.7 $ 142,528.0 $ 142,528.0 $ 142,528.0 $ 142,528.0 $ 142,528.0 $ 128,275.2 $ 123,144.2 $ 105,904.0 $ 105,904.0

Expenditures

Expenditures from Operations

$ 63,456.8 $ 64,334.3 $ 65,325.9 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 70,032.4 $ 69,327.4 $ 66,958.5 $ 66,958.5
Subtotal Spent on Operations
$ 63,456.8 $ 64,334.3 $ 65,325.9 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 70,032.4 $ 69,327.4 $ 66,958.5 $ 66,958.5

Additional Cash Spent

Current Borrowing Repay

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 63,456.8 $ 64,334.3 $ 65,325.9 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 71,990.8 $ 70,032.4 $ 69,327.4 $ 66,958.5 $ 66,958.5

Net Cash Flow

$ (14,331.8) $ (8,823.1) $ (2,598.2) $ 70,537.2 $ 70,537.2 $ 70,537.2 $ 70,537.2 $ 70,537.2 $ 58,242.8 $ 53,816.8 $ 38,945.5 $ 38,945.5
Cash Balance
$ - $ - $ - $ 70,537.2 $ 141,074.4 $ 211,611.5 $ 282,148.7 $ 352,685.9 $ 410,928.7 $ 464,745.5 $ 503,691.0 $ 542,636.5

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