Ladies and gentlemen, thank you for your patience and thank you for attending today's F45 Training Holdings Inc. Third Quarter 2022 Earnings Call. My name is Amber, and I will be your operator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for Q&A at the end. If you would like to ask a question, please press star one on your telephone keypad at any time. It is now my pleasure to hand the conference over to our host, Bruce Williams, Managing Director, ICR, investor relations. Bruce, please proceed. Good afternoon, everyone, and thank you for joining the call to discuss F45 Training's third quarter results, which we released this afternoon and can be found on the investor relations section of our website at f45training.com. Today's call will be hosted by Interim Chief Executive Officer Ben Coates and Chief Financial Officer Chris Payne. Before we get started, I want to remind everyone that management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the current management's expectations. These may include, without limitations, predictions, expectations, targets, or estimates, including regarding our anticipated financial performance and liquidity. The actual results could differ materially from those mentioned. Words such as may, will, should, expects, plans, anticipates, could, intends, targets, projects, contemplates, believes, estimates, predicts, potential or continue, or negatives of these words and variations of such words and similar expressions are intended to identify such forward-looking statements. Those forward-looking statements involve substantial risks and uncertainties, many of which may be outside of our control that can cause actual results to differ materially from those expressed in or implied by such statements. These factors and uncertainties, among others, are discussed in our filings with the SEC. We encourage you to review these filings for a discussion of these factors, including in our earnings release, our annual report on Form 10-K for the year ended December 31st, 2021, and our filed quarterly report on Form 10-Q for the quarter ended September 30. You should not place undue reliance on these forward-looking statements, which speak only as of today, and we undertake no obligation to update or revise them for any new information. This call will also contain certain non-GAAP financial measures such as Adjusted EBITDA and free cash flow, which we believe are useful supplemental measures that assist in evaluating our ability to generate earnings and facilitate period-to-period comparisons of our core operating results and the results of peer companies. Non-GAAP measures should be considered in addition to and not as a substitute for the comparable GAAP measures. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and definitions of these indicators are included in our earnings release. With that, I will turn the call over to Ben. Thank you, Bruce, and thanks everyone for joining us today for our third quarter earnings call. I'm pleased to share our Q3 results with you today, which came in above expectations on revenue and Adjusted EBITDA. In addition, I want to thank our team and our franchise network for their ongoing commitment towards our core mission, which is to offer the world's best workout to help change lives and to create opportunities for individuals who are passionate about fitness and entrepreneurship. By delivering on these objectives, we believe we can create tremendous value for our various stakeholders. During the quarter, we implemented several organizational changes which we discussed on our last call, including our significant headcount rationalization and cost reduction plans that were important to aligning the business more closely with current macroeconomic and business conditions. These changes position the company for stronger profitability and more consistent growth as we move forward. Despite the uncertainty regarding the macroeconomic backdrop, consumers continue to prioritize health and fitness as an essential part of their daily lives. F45 remains a critical partner for our members in helping them achieve their goals. To this end, membership trends remain strong as total membership continued to grow globally during the quarter, reaching new highs. We have also seen continued member engagement globally in line with historical trends, which demonstrates the importance of F45 to our members in their daily routines. These trends ultimately benefit our franchisees who continue to engage in discussions with us around growing their studio footprint. Today, I will recap our third quarter results and share with you an update on our business, including commentary on our recent corporate reorganization and cost reduction strategy, our liquidity position, the health of the franchise network, and other strategic updates. I'll turn it over to Chris to provide a summary of our financial performance during the quarter, as well as a summary of our full-year financial guidance. We will then conclude with Q&A. Starting with results. For the third quarter, total revenues increased by 8% to $29.3 million, compared to $27.2 million in the prior year period. Total system-wide sales increased 31%, and same-store sales increased 15%. Adjusted EBITDA for the quarter came in at $6.1 million, compared to $10.1 million in the prior year period. Chris will expand on our Q3 results during his remarks. Moving on to our corporate reorganization. During the quarter, we completed the previously announced corporate reorganization, which included a significant reduction in our headcount, as well as the reorganization of certain departments to streamline our operations. While these initiatives are never easy, I'm pleased to report that the changes have been successfully implemented, which has resulted in meaningful ongoing cost savings. Importantly, the transition has not had any significant disruptions on the core business and our corporate team remains focused and fully aligned around the company's strategic priorities. Moving on to liquidity. I'm pleased to report that we're on target with our cost reduction plans. Following the recent cost optimization measures, we are now operating within our targeted level of operating expense on a normalized basis. Chris will expand on this shortly. As we discussed on our last call, we remain focused on pursuing a disciplined financial strategy that prioritizes profitability, cash flow generation, and sustainable growth. As a franchise business, our model is fundamentally capital efficient and positions the company to generate strong margins, robust free cash flow, and solid returns on capital on a normalized basis. Following the implementation of the cost reduction plan and our more disciplined financial approach, we believe we are well-positioned to capture these financial benefits. Next, I will provide an update on the health of our franchise network. During the quarter, total system-wide sales increased 31% compared to the prior year period to a record of $131 million, driven by broad-based strength across the globe. In the U.S. Segment, system-wide sales increased 32%, while our Australian and rest of the world segments increased 20% and 50% from the prior year period, respectively. In addition, system-wide visits during the quarter increased 19% globally, driven by 10% growth in the U.S., 22% growth in Australia, and 38% growth in the rest of the world. These strong results validate the strength and resilience of the franchise network despite ongoing inflationary pressures and macroeconomic uncertainty. Our franchises are highly engaged and excited about the future of F45. Despite these economic headwinds, we continue to see demand from investors and operators for new F45 franchise locations. Moving on to our backlog. Our backlog of sold but not yet open studios remains robust with a healthy mix of larger multi-unit development partners and smaller independent operators focused on building studio portfolios of scale. While we continue to experience industry-wide delays related to permitting and construction, unit openings for the quarter met our expectations, and we remain comfortable with our unit opening guidance for the year. However, we do expect that our franchises may continue to experience delays in opening their locations due to these issues and the continuing tightening of global credit markets. Furthermore, to help combat some of these issues, we continue to develop our pre-open services platform, which will assist our franchisees in opening studios more quickly by providing support across real estate, construction, and pre-open marketing. Importantly, we will be leveraging our existing operating infrastructure supported by third-party partners to provide these services in a cost-efficient manner with no material incremental OpEx while providing significant value to our franchisees. Moving on to other strategic updates. During Q3, we executed a master franchise agreement in Europe with Club Sports Group. This arrangement builds on the existing multi-unit development deal with Club in the U.S. Under this agreement, our partner will inherit primary responsibilities for servicing new and existing franchises throughout the U.K. and Europe. Through the existing multi-unit development agreement in the U.S., Club already has significant experience with F45 and is a proven operator. Under this agreement, Club is committed to opening over 300 F45 studios in the U.S. over the next couple of years. With approximately 50 F45 studios currently open and many more in development expected to open by year-end, Club brings deep franchise-level operational knowledge and significant infrastructure to support the expanded partnership. We will continue to strategically evaluate master franchise agreements in certain markets. We believe these agreements allow us to leverage local partners to drive success for the F45 brand globally. I'll now hand it over to Chris. Thanks, Ben, and thank you for taking the time to join our call today. I'll start today's discussion by reviewing Q3 results and network performance in detail, provide an update on the progress we're making towards our year-end targets, and conclude with a brief summary of our financial guidance. Starting with Q3 results. Third quarter total revenues increased 8% to $29.3 million, compared to $27.2 million in the prior year period. The increase was primarily driven by equipment revenues, which increased 24% to $10.8 million. Franchise revenues were roughly flat at $18.6 million from the prior year period. Moving on to our segments. Starting with the U.S., we achieved franchise revenues of $11.7 million in Q3, which were in line with franchise revenues of $11.9 million in the prior year period. The slight decrease was related to the termination of the asset transfer and licensing agreement with LIIT LLC in connection with the restructuring events during Q3. U.S. equipment revenues increased $0.6 million, driven by the delivery of equipment and merchandise, including Top-Up Packs, to our franchisee. In the U.S., there's 36 World Packs in Q3, an increase of 5 from the comparable prior year period. Moving to Australia, franchise revenues were flat at approximately $3.3 million. We have a mature franchise base in Australia with moderate new unit growth through our core F45 products, and our Australian revenues were unfavorably impacted due to currency translation adjustments as a result of the weakening Australian dollar against the U.S. Dollar. Australia equipment and merchandise revenues declined $1.5 million from the prior year period, primarily driven by a decrease in the number of World Packs delivered to our F45 franchisees. We delivered 5 World Packs in the period, a decrease of 4 from the prior year period. Finally, in ROW, franchise revenues increased modestly by $0.2 million. The increase was primarily attributable to the increase in new franchises sold and new studio openings. The increase was partially offset by unfavorable FX translation adjustments as a result of the weakening Euro, British pounds, and Canadian dollars. ROW equipment revenues increased $3 million, primarily driven by an increase in equipment and merchandise deliveries. We delivered 56 World Packs during Q3, some of which was related to the master franchise agreement we signed in Europe during the period. As I already noted, this increase in equipment revenues was offset by an unfavorable FX currency translation adjustment of approximately $1 million as a result of the weakening currencies, in particular Euro. Moving on to network health. System-wide sales, which is one of our key measures of the health of our franchise network, increased 31% to $131 million, with growth across all three of our segments. System-wide sales increased 32% in the U.S., 20% in Australia, and 50% in ROW from the prior year period, driven by new studio openings and greater percentage of studios which were not impacted by COVID-19 related restrictions, primarily in Australia. We are also happy to report that we experienced a 3% increase in system-wide sales in Q3 2022 compared to Q2 2022, and an 11% increase compared to Q1 2022, which shows the continued health of our network. Additionally, run rate AUVs have continued to improve across geographies, with our U.S. segment run rate AUV improving slightly from Q2 2022. As Ben noted on our last earnings call, U.S. run rate annualized AUVs are around 380,000. System-wide visits also increased 19% to 7.6 million, driven by a 10% increase in the U.S., a 22% increase in Australia, and a 38% increase in rest of world. The strength in system-wide visits demonstrates that we continue to have a deep engagement with our members by delivering unique workouts each day. Our US segment hit its highest ever levels of system-wide visits at approximately 3.3 million in Q3, driven by new studio openings and strong engagement from our US membership base. In Australia, system-wide visits experienced a 6% increase from Q2 this year, which demonstrates continued recovery in the Australian market. Same-store sales increased 15% with 11% growth in the US as our largest market continues to show growth and resilience despite an uncertain macroeconomic environment. We also saw positive comps of 19% in our Australian segment, which compares favorably to the negative 21% same-store sales growth during the prior year period. Our ROW segment had positive Q3 comps of 20%, driven by a recovery of studios and further reductions in COVID-19 restrictions. Total franchises sold decreased by 152 to 3,682. In the US, we ended Q3 with 2,060 net franchises sold due to 167 net franchise terminations. This decline was primarily due to additional terminations from the multi-unit franchise deals signed during the first half of the year, and this was in line with our expectations. We do not expect any further significant terminations related to multi-unit franchise deals. As a note, these terminations are related to the termination of the franchisee financing facilities, which we discussed on our Q2 earnings call in August. In Australia, we had five terminations, bringing net franchises sold to 798, while in ROW, net franchises sold increased by 20 to 824. In the third quarter, we had 84 net studio openings, 61 in the US, five in Australia, and 18 in ROW. We ended the quarter with 844 studios in the US, 679 in Australia, and 519 in ROW. Our quarter end numbers of studios reflect 44% growth in the US, 7% in Australia, and 30% in the rest of world compared to the prior year period. Moving on to profitability. Gross profit was roughly flat to last year at $19.9 million. Gross profit margin of 67.9% represented a decrease from 73.4% in the prior year period, largely due to a higher mix of lower margin equipment sales. Franchise gross profit was roughly flat to last year at $17 million. Franchise gross profit margin was 92% and in line with prior year period. Equipment and merchandise gross profit declined 3% to $2.8 million, compared to $2.9 million. Equipment gross margin was 26.1% compared to 33.6% in the prior year period. The decline in gross margin was primarily due to higher costs related to shipping and storage of equipment and merchandise, and lower equipment prices driven by limited discounting to franchisees. Despite increased costs, this limited discounting allowed us to improve our working capital position and liquidity during the period. We do not anticipate that we'll continue to offer these discounts moving forward. SG&A expenses were $53.8 million compared to $110 million in the prior year period. This 51% reduction in SG&A was a result of our cost reduction initiatives, including headcount reductions to align our expense base to our revised outlook and pace of unit openings. I would also note that there is a significant amount of non-recurring and non-cash expense in both the current year and prior year periods. On a normalized basis, Q3 SG&A expense was approximately $19.5 million, which is in line with our targeted SG&A range. We continue to expect that cost-cutting initiatives that were announced last quarter will yield $7 million-$10 million of quarterly savings compared to earlier quarters this year and bring down our quarterly normalized SG&A to a $15 million-$20 million range. Net loss was $16.2 million. Adjusted EBITDA was $6.1 million compared to $10.1 million in the prior year period. Now turning to the balance sheet. In line with expectation, we ended the quarter with approximately $17 million in cash and cash equivalents, and our revolver was fully drawn at approximately $88 million as of September 30, 2022. Cash increased from June 2022 due to our equipment discounting initiatives and borrowings under our facility and was offset by one-time costs related to our restructuring. As of today, we have paid out nearly all costs related to the restructuring. We will continue to focus on improving our liquidity, and we're committed to maintaining strict financial discipline as we continue to navigate the uncertain macroeconomic environment. Finally, moving on to guidance. We're maintaining the guidance provided with our pre-announcement that was released in July. We continue to expect full year net franchises sold between 350 and 450. Full year initial studio openings between 350 and 450. Full year revenues between $120 million and $130 million. Full year adjusted EBITDA between $25 million and $30 million. As a reminder, a reconciliation of our non-GAAP measures to the most comparable GAAP measure and definitions of these indicators and our key performance measures are included in our quarterly report from our 10-Q and in our earnings release. In conclusion, in Q2, we reset our growth outlook and have subsequently successfully right-sized our cost structure. As discussed, we believe these decisions will allow us to prioritize profitability and free cash flow generation. We also believe that these changes will help position the company for long-term sustainable success. I'll now turn the call back over to Ben for closing remarks. Thank you, Chris. In closing, I would like to comment on some recent developments. As we announced on October the third, we received an unsolicited, preliminary, and non-binding proposal from Kennedy Lewis Investment Management or KLIM to acquire all of the outstanding shares of common stock of the company not already beneficially owned by KLIM. As we announced in our earnings release today, our board of directors has formed a special committee of independent directors to review and evaluate the unsolicited proposal and explore potential strategic alternatives. The special committee has retained JP Morgan as financial advisor and King & Spalding as legal counsel to assist in this process. We will not comment any further than what we have publicly disclosed. To that end, we ask that you do not ask questions pertaining to the KLIM proposal or the special committee process during the Q&A session. In conclusion, I want to thank all our employees, franchisees, and investors for their hard work and continued support during this challenging period. With their support, I am confident that we will continue to grow our brand and deliver on our objectives. With that, I'll hand it back to the operator for Q&A. Thank you. We will now begin the Q&A session. If you would like to submit a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, that's star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. That's good. I'm hearing it. Jonathan Komp, your line is now open. Is that for me,? Hello? Yes, please go ahead. Okay. Sorry, guys. A couple of quick questions on the U.S., right? If you look at the difference between system-wide sales and visits, it looks like the revenue per visit is up quite a bit, and maybe up sequentially. You know, maybe talk about pricing that you might have taken, and/or a mix shift that might be driving that. Hi, Jonathan. It's Chris. Yes, look, it's pleasing to see that both, you know, system-wide sales in the U.S. has continued to increase and visitation was at an all-time high. I guess, you know, our model is a subscription-based model, whereby, you know, you're paying a fixed amount per week or per month, regardless of how many times you attend the studio. While you know, system-wide sales are up, so do our visits. The two metrics don't perfectly always align. Okay. Maybe as a follow-up to that, if I think about, you know, maybe help me understand this, right? Visits up 10%. I know average studio count probably up 40% or so in the U.S. Maybe, you know, and this doesn't, maybe it doesn't matter, to the economic model, but perhaps it matters to membership down the road. You know, what's happening with visitation per studio? I mean, looks like it's down. Is that just immaturity of new units, or are you seeing anything, you know, moderation in visitation in more mature units? Yeah. What we're seeing, Jon, through our data is that visitation is remaining quite constant, attending between 2.5 to 3 times a week to constant studios. We're not seeing any decline in visitation trends. All right. Maybe just lastly, you know, when you think about liquidity, what's the opportunity when I think about monetizing assets? You know, you've got inventory and receivables on the balance sheet. You know, how much of that can be monetized? Is there any other asset monetization potential, or it's really just improving the profitability of the business? Yeah, really good question. This quarter, we did some targeted discounting with our World Pack, which demonstrated that should we desire, we can move a material number of packs. We have ceased that, and that is evident in our margins this quarter. Our gross margins are down, and that is the reason why. However, you know, that is a lever there that we can pull to as an efficient way to bring capital into the business. As it relates to asset sales, we are looking at a number of master franchises around the world that, you know, that have material upfront fees. They're probably the two areas that levers that we have that we can, you know, quite quickly pull. It's to increase our liquidity position. All right. Thank you. Thank you. Our next question comes from the line of Randy Konik with Jefferies. Randy, your line is now open. Hey, thanks a lot. I just wanted to get some more color on your thoughts around master franchise agreements strategy, you know, going forward. Where have you kind of identified, you know, other areas that you wanna pursue this more in? Just give us some more perspective on, you know, this recent agreement and then how you're thinking about kind of maybe replicating that, you know, in other areas of the world. Thanks. Oh, hi, it's Ben here. Look, the way we're seeing master franchisees is that in regions where, you know, they may particularly be more complex, they have cultural differences and difficult regulations, et cetera, we find that master franchises make sense. It certainly allows us to operate the business with reduced resources and to direct our focus back on what we feel is our core growth market here in the U.S. We appreciate that we potentially give up some of the economics by going into a master franchise agreement, but it still makes sense for us given those three points and also perhaps the overall accelerated growth means that we can still continue to be more profitable than going and continuing business on a standalone basis in those regions. Gotcha. When you think about, you know, your just a general franchisees, e.g., like a master franchise agreement, are you trying to get more of the, you know, movement of the franchisees towards multi-unit franchisees as opposed to onesies and twosies? Are you looking to kind of do more of that, I guess, private equity? Just kind of curious there because it feels like, you know, some of the issues in the past were related to, you had a lot of demand for the units, but a lot of onesies and twosies, they had some trouble getting the timing of their facilities or credit to get these units opened, etc. Just curious on how you're thinking about the pipeline of franchisees evolving or changing or not changing over the next one, two, three years. Yeah, I'll take that one. Randy, yeah, with F45, as you know, the unit level economics afford us to being available to a very broad range of franchisees from, you know, the onesies and twosies as you referred to, who often are exceptional franchisees. In addition to that, though, yes, we do like the idea of creating financing solutions that are available to our existing proven operators, as we did earlier in the year, and pairing our best-in-class franchisees up with financing and real estate. We still believe that is a very good, you know, growth pipeline for us in the future. Yes, we still do have interest from, you know, private equity, you know, family office, larger franchise group investors that are looking to consolidate some of the network, and build out additional greenfield locations. We're going to continue to focus on all of those groups into the future, and I think that affords us a very healthy pipeline of potential franchisees. Gotcha. My last question would be, any color you can give us on, you know, AUV trends as it relates to, you know, further opportunities to continue to kind of drive that number higher? I don't know if there's any kind of perspectives you can give us around, you know, maybe what your top quintile, the difference between a top quintile and average or bottom quintile, you know, units you're doing, whether in the U.S. or rest of world or in Australia. Just wanna get some flavor to the audience on, you know, how much room you see ahead for AUVs to continue to grow across the different pockets of the world. Thanks, guys. Look, AUVs have on a cohort basis are increasing year-over-year. We expect that trend to continue to improve as brand awareness kicks in, and F45 becomes more of a household name. You see those year one, two, three cohorts opening with and those AUVs by cohort basis improving year-over-year. It's our expectation that as our brand identity continues to increase here in the U.S., that these units are going to open with and have higher AUVs, combining that with our renewed focus to marketing and brand marketing. We're now embarking on national brand campaigns here in the U.S., and we'll expand that throughout regions of the world. Our expectation is that once those brand campaigns are in full flight, that we will increase that brand awareness, and the AUVs will increase. In addition to that, we're also looking to enter into partnerships with the right partners to offer ancillary products into our studios where it makes sense. We don't wanna clutter up our studios, and we wanna partner with other premium brands. There are other ways that we can help continue to grow the unit-level economics for our franchisees. Great. Helpful. Thanks, guys. Thank you. Our next question comes from the line of Paul Golding with Macquarie Capital. Paul, your line is now open. Thanks so much. I was wondering if you could give us some color around how the various credit initiatives are progressing, if at all, with respect to enabling franchisees. I know that the various facilities before ran into some issues and was wondering if they were still being rediscussed or if other avenues were being discussed. Thank you. Hi, it's Ben here. Look, we continue to have discussions with potential credit facilities to assist our franchisees in growing their businesses. We appreciate that the credit market at the moment is difficult, but we certainly are continuing those opportunities, and we expect coming into Q1 2023, we would accelerate that program. Yeah. The only thing that I would add to that, Paul, would be, you know, Ben mentioned earlier in his prepared remarks that we have established a special committee, and, you know, those opportunities will be considered in connection with that as well. Great. Thanks. In terms of the supply chain, I know that you were mentioning permitting headwinds in terms of opening new studios. Could you give us any color around the supply chain for World Pack themselves? I know that you were taking inventory and front-loading those orders. Is there any chance of maybe elongating that supply chain as opposed to bringing it forward if supply chain issues are abating? Any color there? Thank you. Yeah. Pleasingly, a couple of things have changed since the headwinds that we incurred Q3, Q4 last year. The logistics and shipping times have drastically reduced, as has the cost. Back at the height of that crisis, it was costing up to, you know, up to $18,000 a World Pack to ship it. Now those prices are back down closer to around $3,000. That logistical side of the supply chain risk that we were encountering has, you know, it's significantly better now. In addition to that, we have all of our World Pack stock secured. We have, you know, ample stock, ample inventory, to probably see us through for the next, you know, at least 12 months, to potentially even longer. The supply chain issues that we were running into last year are not an issue for us at the moment. Great. Thanks so much. Thank you. Our next question comes from Jonathan Komp with Baird. Jonathan, your line is now open. Yeah. Hey, thank you. Chris, I wanna follow up. I think you mentioned monetizing some of the World Packs. Just given that it looks like there still is a pretty significant cash outflow for inventory in the quarter, could you maybe just clarify what's going on there? Maybe more broadly on the working capital, it still looks quite high. Can you maybe comment on when we should expect a more normalized level and to maybe what's driving the still very elevated levels? Yeah, sure. The movement on the balance sheet regarding inventory, where you've seen inventory jump up, that's just a shift from prepaid to inventory. So when inventory arrives at the warehouse, it moves from prepaid to inventory. Outside of that, you know, that's I just wanna be clear that that hasn't resulted in us, you know, purchasing any. We haven't purchased any additional inventory. It's really just a balance sheet movement. Does that answer the first part of your question, Jonathan? Yep. On the working capital in total. Yeah. This quarter will be a much more normalized quarter. Obviously, last quarter, we were dealing with, you know, the restructuring costs, which, you know, had a material impact to the P&L. Yes, it will be a much more normalized state. The majority of those restructuring costs were completed during the quarter. There was about around $5 million-$6 million that has been paid out this quarter. We're through those now. From here on in, it should be far more normalized as it relates to the P&L income statement. Okay. I wanna follow up. I believe last quarter you talked about reaching a steady state starting in the fourth quarter for about $10 million of free cash flow generation a quarter. Is that still your expectation? That, that's still currently our expectation. Okay. Just last one from me. I wanted to ask, I know you disclosed this on the income statement, the related party revenue looks like it was a little more than 20% of the total revenue in the quarter. Could you just confirm? I assume that's from the KLIM entity. Could you maybe just clarify that? Then could you talk about the rationale, the additional master franchise agreement you mentioned in Europe? Just broader thoughts on increasing exposure with that entity, especially given the non-binding proposal that's out there. Thank you. Yeah. The related party revenue, you're quite right. That's related to the Club Sports Group in connection with their master franchise. Club Sports Group, as you quite rightly pointed out, are affiliated with Kennedy Lewis, but they act independently and they have separate governance. Yes, we've entered into a master franchise agreement with them, but they're great operators. They've proven here they've got, you know, they've built out a great management team. They've acquired over 40 locations, and they're really getting to work at pace with their greenfield locations. In Europe in particular, they've partnered with, you know, tremendous franchisees there. We feel like that with that focus, that in-region focus, that in the long term, that's going to be a very efficient asset-light way for us to, you know, generate more profits than and grow more quickly under this model. Okay. Thank you. Thank you. Our next question comes from the line of George Kelly with Roth Capital Partners. George, your line is now open. Hey, everybody. Thanks for taking my questions. For the first one, curious, the $15 billion-$20 billion of OpEx, quarterly OpEx that you're targeting, just curious if that's something that you think you can continue into next year. Is that 15-20 realistic for 2023? Yeah. George, that is the plan. We're already into that range in Q3 on a normalized basis. The plan for us is to maintain it at those levels into next year, which we believe we can easily do. Okay, great. Second question for me, and Chris, you commented on this in response to one of the earlier questions, but just curious if you could give a little more information. You've opened so many studios in the U.S. here over the last year or so. Just curious if you could maybe provide a little bit more detail just about some of that cohort. You mentioned that these new cohorts are performing at or better than previous levels. Just kinda curious how that ramp is going with these new studios, and remind us how long does it take for them to hit maturity? Typically, it's a three-year ramp to kind of a more of a, you know, more mature AUV. Our goal is to actually get that ramp there for those studios, you know, much faster than that. We're obviously rolling out, as I mentioned previously, the brand initiative. We're also looking through the shared services environment that we've created within F45 to really focus on pre-open marketing initiatives, and getting studios, you know, profitable from day one. That's the goal. It's our expectation that we can compress that what has historically been a three-year timeframe to a more mature AUV down into a much shorter timeframe. Okay. Thank you. Thank you. There are currently no further questions in queue. Again, as a reminder, to submit for a question, that's star one on your telephone keypad. There are currently no further questions in queue, so I will pass the conference back over to the management team for any additional or closing remarks. Look, I would just like to thank you all for joining us today and thank you for taking the time. We look forward to updating you with more information as the business progresses. Thank you. This concludes today's F45 Training Holdings Inc. third quarter 2022 earnings call. Thank you for your participation. You may now disconnect your line.