Obesity:
According to the Every Body Needs Something (TM) Survey released in January
2004 by Bally Total Fitness more than 97% of Americans are aware that the United
States is the world’s most obese nation and more than 64% stated that this is embarrassing to them personally. More than 97% of survey respondents who felt they were unfit or overweight want to lose weight, yet only 25% are currently following a diet program. The response to this survey demonstrates that with effective marketing
Bally has the potential market available to improve its new membership revenues, as such demographics will only improve with improvements in both diet and exercise.

Additional products and services
Significant opportunities exist to increase revenues beyond those generated by the sale of membership plans and receipt of monthly dues. By integrating personal training, private label nutritional products, and most recently the Weight Management
Program into its core fitness center operations, the Bally Total Fitness brand has been positioned as the total source for all of the company’s members wellness and fitness needs. Additionally, these incremental revenues do not require significant capital investment as they leverage the growing distribution platform that the company’s fitness centers have become.

Major Threat:
Lately major concerns about the company’s ability to deliver results against a backdrop of increasing competition for fitness club operators have arisen. In a trend that is expected to become both increasingly onerous and publicized, new fitness clubs have been opening at a rapid pace around the US, fueled by low cost of capital
(and resulting favorable lease terms) which have met few barriers to entry. It is estimated that the fitness industry has seen an approximate 15% increase in capacity over the last two years. Mini-Clubs
While