Hội nghị công bố kết quả kinh doanh quý 3/2026 của The Joint Corp. (JYNT): Khả năng sinh lời cải thiện, triển vọng doanh thu giảm

Những điểm nhấn chính

• Doanh thu quý 3/2026 tăng 1% so với cùng kỳ năm trước lên 13,6 triệu USD, trong khi doanh số toàn hệ thống giảm 3,1% xuống 123,3 triệu USD.
• Doanh số tương đương giảm 1,9%, cải thiện so với mức giảm 2,8% trong quý 2 và 4,2% trong quý 1. Ban lãnh đạo cho rằng tình trạng suy yếu kéo dài một phần do áp lực chi tiêu của người tiêu dùng, số lượng bệnh nhân mới sụt giảm và mức chi tiêu hàng tháng của bệnh nhân thấp hơn.
• Lợi nhuận ròng từ hoạt động kinh doanh liên tục tăng lên 1,5 triệu USD từ mức 290.000 USD. EBITDA điều chỉnh từ hoạt động kinh doanh liên tục tăng lên 2,3 triệu USD từ mức 1,4 triệu USD, phản ánh đòn bẩy hoạt động từ mô hình nhượng quyền ít thâm dụng vốn.
• Số lượng hội viên đang hoạt động trên mỗi phòng khám tăng cả so với cùng kỳ năm trước và so với quý trước. Tỷ lệ chuyển đổi, tỷ lệ giữ chân, thời gian duy trì hội viên và tổng chi tiêu trên mỗi hội viên đang hoạt động cũng được cải thiện, mặc dù mức chi tiêu trung bình hàng tháng vẫn chịu áp lực.
• The Joint đã hạ triển vọng doanh số toàn hệ thống năm 2026 xuống còn 508 triệu - 512 triệu USD và hiện dự báo doanh số tương đương sẽ giảm 2,5% - 3,5%. Dự báo EBITDA điều chỉnh hợp nhất được duy trì ở mức 12,5 triệu - 13,5 triệu USD.
• Các phòng khám mới mở trong năm 2026 đạt điểm hòa vốn trung bình trong khoảng ba tháng, so với mức khoảng 18 tháng trước đây. Ban lãnh đạo kỳ vọng số lượng phòng khám sẽ tăng trưởng trở lại vào năm 2027 sau khi tiếp tục tối ưu hóa danh mục.

Dữ liệu tài chính chủ chốt

Kết quả kinh doanh và hoạt động

Xu hướng hội viên được cải thiện trong quý. Số lượng hội viên đang hoạt động trên mỗi phòng khám tăng so với cả cùng kỳ năm trước và quý 2/2026, trong khi tỷ lệ chuyển đổi và tỷ lệ giữ chân đều được củng cố. Các hội viên cũng gắn bó lâu hơn và tạo ra tổng chi tiêu lớn hơn trong suốt thời gian đồng hành cùng The Joint.

Các gói linh hoạt một và hai lần khám mỗi tháng đã giúp chuyển đổi bệnh nhân mới và giảm tình trạng hủy gói của các hội viên hiện tại. Tuy nhiên, ban lãnh đạo cho biết các gói này khiến mức chi tiêu trung bình hàng tháng giảm khoảng 2 USD trên mỗi bệnh nhân, làm suy giảm một phần lợi ích ngắn hạn từ việc tăng trưởng số lượng hội viên.

Công ty có kế hoạch ra mắt nền tảng quản lý khách hàng tiềm năng ứng dụng AI với sáu trợ lý ảo AI vào tháng 1/2027. Ban lãnh đạo tin rằng hệ thống này, với khả năng theo sát khách hàng tiềm năng, đặt lịch hẹn và giải đáp các câu hỏi thường gặp, có thể bắt đầu đóng góp vào tăng trưởng doanh số tương đương trong năm 2027.

Việc phát triển phòng khám đang được hỗ trợ nhờ khâu lựa chọn địa điểm chặt chẽ hơn, các đơn vị vận hành có năng lực tốt hơn và yêu cầu tiếp thị trước khi khai trương nghiêm ngặt hơn. Các phòng khám mới mở trong năm 2026 đạt điểm hòa vốn trung bình trong khoảng ba tháng, so với mức khoảng 18 tháng trước đây.

The Joint kết thúc quý 3 với 930 phòng khám sau khi mở mới bốn phòng khám, đóng cửa 15 phòng khám và nhượng quyền lại 26 phòng khám trong quý. Việc chuyển nhượng 15 phòng khám còn lại do công ty sở hữu hoặc quản lý vẫn đang được triển khai. Sau khi hoàn tất, công ty dự kiến sẽ không còn cơ sở nào do công ty tự sở hữu hoặc quản lý.

Công ty cũng tiếp tục mua lại quyền phát triển khu vực. Tính cả Texas, công ty đã công bố năm thương vụ thâu tóm khu vực bao gồm 189 phòng khám trong năm 2026. Các giao dịch này dự kiến sẽ giúp giảm khoảng 3 triệu USD tiền phí bản quyền trả cho các nhà phát triển khu vực mỗi năm, với khoảng một phần ba lợi ích đó bị bù trừ bởi chi phí quản lý nội bộ.

Vào ngày 1/10, The Joint đã chi 8 triệu USD để mua lại quyền phát triển khu vực Texas bao gồm 141 phòng khám nhượng quyền. Khoản thanh toán bổ sung lên tới 2 triệu USD gắn liền với tổng doanh số của khu vực trong hai năm tiếp theo.

Định hướng của ban lãnh đạo

Ban lãnh đạo cho biết triển vọng điều chỉnh phản ánh kết quả kinh doanh trong chín tháng đầu năm và áp lực kinh tế vĩ mô kéo dài lên chi tiêu của người tiêu dùng. Công ty kỳ vọng tăng trưởng số lượng phòng khám sẽ phục hồi vào năm 2027 và xác định việc cải thiện doanh số tương đương là ưu tiên hàng đầu trong năm đó.

Sau khi hoàn tất các đợt chuyển nhượng quyền sở hữu còn lại, ban lãnh đạo xem biên lợi nhuận gộp từ 83% - 85%, chi phí quản lý doanh nghiệp (G&A) chiếm 40% - 42% doanh thu, chi phí vốn (capex) gần 3% doanh thu và tỷ lệ chuyển đổi dòng tiền tự do từ 60% - 70% là các thông số khởi điểm chứ không phải mục tiêu dài hạn. Các thông số này ngụ ý biên EBITDA điều chỉnh đạt 19% - 21% và biên lợi nhuận ròng đạt 13% - 15%.

Rủi ro và các yếu tố cần theo dõi

• Áp lực chi tiêu của người tiêu dùng tiếp tục làm giảm lượng bệnh nhân mới và mức chi tiêu trung bình hàng tháng của bệnh nhân.
• Các gói hội viên linh hoạt đang cải thiện tỷ lệ chuyển đổi và tỷ lệ giữ chân nhưng hiện làm giảm mức chi tiêu trung bình hàng tháng trên mỗi bệnh nhân.
• Doanh số toàn hệ thống và doanh số tương đương vẫn ở mức âm mặc dù các chỉ số về hội viên và giá trị vòng đời khách hàng đã được cải thiện.
• Việc tối ưu hóa danh mục đang thu hẹp mạng lưới phòng khám, với số lượng phòng khám cuối năm dự kiến sẽ thấp hơn khoảng 50 cơ sở so với cuối năm 2025.
• Lợi ích kỳ vọng từ nền tảng quản lý khách hàng tiềm năng ứng dụng AI, việc mở rộng phòng khám và các dịch vụ chăm sóc mới phụ thuộc vào việc triển khai thành công cũng như mức độ đón nhận của bệnh nhân.
• Dòng tiền quý 3 bị ảnh hưởng bởi khoản thanh toán dàn xếp pháp lý trị giá 1,5 triệu USD, trong khi thương vụ mua lại quyền phát triển tại Texas đòi hỏi 8 triệu USD tiền mặt sau khi kết thúc quý.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho rằng hiệu quả hoạt động tốt hơn của các phòng khám mới mở là nhờ khâu lựa chọn địa điểm khắt khe hơn, các đơn vị vận hành nhiều cơ sở có tiềm lực vốn tốt hơn và quy trình bắt buộc tạo khách hàng tiềm năng trước khi khai trương. Công ty xác nhận phần lớn việc tái cấu trúc mạng lưới phòng khám sẽ hoàn tất trong năm 2026, với kỳ vọng tăng trưởng số lượng cơ sở sẽ tái khởi động vào năm 2027.

Về các gói hội viên linh hoạt, ban lãnh đạo cho biết các gói tần suất thấp hơn phục vụ cho cả mục tiêu thu hút và giữ chân khách hàng. Những gói này giúp chuyển đổi nhiều bệnh nhân đến lần đầu hơn, đồng thời mang lại cho những hội viên không đủ khả năng chi trả hoặc không thể sử dụng bốn lượt khám mỗi tháng một giải pháp thay thế việc hủy gói. Công ty vẫn đang hoàn thiện quy trình bán hàng để đảm bảo các gói này chủ yếu mang lại giá trị gia tăng.

Khi được hỏi về sự sụt giảm doanh số tương đương, ban lãnh đạo mô tả đây là sự kết hợp giữa áp lực từ người tiêu dùng và các yếu tố vận hành. Lạm phát và giá xăng dầu được nêu là những yếu tố gây áp lực trong quý, trong khi mức chi tiêu trung bình thấp hơn đã bù trừ một phần lợi ích từ việc cải thiện tỷ lệ chuyển đổi và giữ chân hội viên.

Toàn văn biên bản cuộc gọi công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, and welcome to The Joint Corporation Third Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Richard Land with Alliance Advisors. Please go ahead.

Richard Land

Thank you, Danielle, and good afternoon, everyone. Joining us on the call today are President and CEO Sanjiv Razdan and CFO Scott Bowman. Please note we are using a slide presentation that can be found on The Joint's IR website.

This afternoon, The Joint Corp. issued a press release for the third quarter ended September 30, 2026. The release is available on the company's website. Please be advised that today's discussion, including any financial and related guidance to be provided, consists of forward-looking statements as defined by securities laws. These statements are based on information currently available to us and involve risks and uncertainties that could cause actual future results, performance and business prospects, and opportunities to differ materially from those expressed in or implied by these statements. Some important factors that could cause such differences are discussed in the Risk Factors section of The Joint Corp.'s filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date the statements are made, and the company assumes no obligation to update them except to the extent required by applicable securities laws. Management uses non-GAAP financial measures such as EBITDA, adjusted EBITDA, and free cash flow. The description of these measures is included in the press release issued earlier this afternoon, and reconciliations to the most directly comparable GAAP measures are included in the appendix to the presentation and press release, both available in the Investors tab of our website.

With that, I'll now turn the call over to Sanjiv Razdan. Sanjiv, please go ahead.

Sanjiv Razdan

Thank you, Richard, and good afternoon, everyone. Our third quarter results show that the actions we have taken to strengthen patient engagement and reshape our operating model are beginning to work together. We are encouraged by progress in several of our leading patient metrics, while recognizing that the consumer environment continues to weigh on spending and our comparable sales. Our active membership count grew during the quarter as our initiative to win back lapsed patients gained momentum. Patients are also staying with us longer and spending more over the course of their relationship with The Joint, supporting higher patient lifetime value.

At the same time, ongoing pressure on consumer spending led to fewer new patients and lower average patient spend per month, which weighed on comp sales. Comp sales were negative 1.9% in the third quarter, improving from negative 2.8% in the second quarter and negative 4.2% in the first quarter. Financially, we continue to see the benefits of our capital-light model with revenue growth and stronger profitability from continuing operations. Scott will walk through the results in more detail. Overall, we are pleased to see that the underlying membership and lifetime value trends are improving and our franchisor model is producing stronger profitability. Our updated outlook takes a realistic view of the consumer, while our focus remains squarely on returning to positive comp sales.

Turning to Slide 5, let me briefly highlight our third quarter financial results. Revenue increased 1% year-over-year to $13.6 million. System-wide sales were $123.3 million, down 3.1% from the prior year period, while comp sales were negative 1.9% versus negative 2.8% in the second quarter. Net income from continuing operations increased by $1.2 million to $1.5 million, compared with $290,000 in the third quarter of 2025. Adjusted EBITDA from continuing operations increased by $900,000 to $2.3 million compared with $1.4 million in the prior year period. Together, these results reflect the improving operating leverage of our franchisor model.

Turning to Slide 6, now turning to membership and patient metrics, we saw encouraging progress during the quarter. Conversion and retention improved, supporting active membership growth. Active members per clinic increased compared with prior year period and compared with the second quarter of 2026. We also increased the average number of months per active member and total dollars per active member, improving patient lifetime value. In short, members are staying with us longer and spending more over their relationship with The Joint.

However, lower average patient spend per month partially offset these benefits, which is why the underlying gains have not yet translated into positive comps. While the longer-term value of the patient relationship is improving, near-term spending remains under pressure. Our focus remains on building the active member base and delivering value in a way that supports patients and the franchisees through the current environment.

Turning to Slide 7, we are pursuing growth in 3 ways: improving comp sales, expanding our clinic network, and responding to growing consumer interest in longevity and health span. I'll start with comp sales, where our initiatives follow the patient journey: attracting new patients, converting them to members, and keeping them engaged longer.

First, we are improving new patient acquisition by strengthening lead management. We are on track to launch a new AI-powered lead management platform supported by 6 AI agents in January 2027. We believe it can begin contributing to comp sales growth during 2027. Among other things, it has the capability to follow up on leads, book appointments, and answer frequently asked questions. This builds on our broader digital efforts to help more patients find The Joint and understand how we can help. Our SEO and AI visibility work continues to support online discovery with our AI visibility score remaining in the mid-70s ahead of competitors across key search topics. We also recently updated our website to highlight our doctors' experience and address common patient questions about pain and specific conditions, helping turn online interest into clinic visits.

Second, we are improving conversion through flexible membership plans. Our flexible membership options give patients more choice while preserving the affordability and accessibility of The Joint model. Lowering the barrier to joining helps us convert more first-time visitors into members and gives existing members a reason to stay rather than cancel.

Third, we are improving retention and winning back lapsed patients. These patients already know The Joint and have benefited from our membership model when they were previously in discomfort. During the third quarter, targeted outreach and promotions helped drive higher lapsed patient win back compared with the prior year period, supporting active membership growth. The cost to bring back a lapsed patient is significantly lower compared to the cost to acquire someone new to The Joint.

And finally, we are also improving member engagement by personalizing the experience for our MVPs, or most valuable patients, to increase their lifetime value. During the third quarter, we launched new app features addressing some of their most requested needs, including adding clinic wait times, which doctor is on schedule, in-app registration, along with birthday and membership anniversary recognition.

Turning to Slide 8, beyond improving comp sales, we are also focused on expanding our clinic network using 3 strategies. First, we are improving new clinic economics. Our 2025 clinic class continues to outperform prior year cohorts and clinics opened in 2026 are performing even better. For example, our recent average time to break even for new 2026 clinics is approximately 3 months compared with approximately 18 months historically. This performance has been supported by more disciplined site selection and more rigorous pre-opening protocols.

Second, we are attracting franchisees with the capacity to expand. We are targeting well-capitalized, experienced multi-site operators while supporting strong existing franchisees that are interested in adding locations. Our compact clinic footprint, low capital requirement, and lean staffing model are well suited to multi-unit ownership.

And third, we are advancing development in reacquired regional developer territories. Buying back RD rights allows us to support franchisees directly, strengthen clinic performance, and recruit operators for specific markets. Across the 5 territories that we reacquired this year, we have identified potential for more than 150 additional clinics, providing a meaningful development opportunity. Supporting all 3, we recently signed with a franchise broker network to accelerate franchisee recruitment and drive new clinic openings.

Turning to Slide 9, our third growth opportunity is to elevate the patient experience and our care offerings to align with growing consumer interest in longevity, health span, mobility, and noninvasive whole body care. As Americans live longer, there is a growing consumer need for improving health span. We believe that The Joint model of improving patient mobility and lowering pain is relevant to this need. We are using consumer research to better understand patient needs and personalize the experience, which is helping us to match our offerings with patients' demands. Pain relief and improved mobility remain central to our message alongside the quality of the patient experience. Our goal is to help patients get back to doing the things they love and encourage long-term engagement.

We are in early stages of testing proprietary clinical care protocols with measurable health outcomes. This includes mobility scores, giving patients clear visibility into their improvement in mobility, pain, and functional health over time, all with the intent of providing our patients with more personalized care and the motivation for consistent ongoing care. And finally, we are piloting complementary retail offerings, including orthotics and nutritional supplements, as we evaluate additional ways to address patient needs and supporting our positioning around mobility and whole body care.

Let's turn to Slide 10. Now, moving on to re-franchising efforts. Supporting these growth priorities is our transition to a capital-light, pure-play franchisor model. With re-franchising substantially complete, our management team is focusing more directly on franchisee support, patient acquisition, and network development with less operational complexity from company-owned clinics. The ownership transfers for our 15 remaining company-owned or managed clinics continue to progress as lease assignments and related steps are completed. Once those transfers are complete, we will have no remaining company-owned or managed clinics.

The benefits of the model are increasingly visible in our results. Through the first 9 months of 2026, net income from continuing operations improved to $2.3 million from a net loss of $1.2 million a year ago, while adjusted EBITDA from continuing operations increased to $5.9 million from $1.5 million. This structure is helping to improve margins, profitability, and cash generation from continuing operations. While we still have work to do to restore consistent system-wide growth, the business is leaner and better positioned to convert future growth into earnings and cash flow.

With that, I'll turn it over to Scott.

Scott Bowman

Thanks, Sanjiv. First, I'll review some key operating metrics. System-wide sales in the third quarter were $123.3 million, a decline of 3.1% compared with the same period last year. Comp sales were negative 1.9% versus negative 2.8% in the second quarter, consistent with the sequential progression that Sanjiv discussed earlier. Adjusted EBITDA from consolidated operations was $3.3 million, in line with the third quarter of 2025.

Turning to Slide 13, I'll review the financial results in more detail. Revenue increased 1% to $13.6 million from $13.4 million in the prior year period. Royalty fees increased 2% to $8.3 million, outpacing system-wide sales, as refranchised clinics generated royalties that were not included in the prior year period. Cost of revenues was $2.4 million, down 10% from the same period last year, primarily reflecting lower regional developer royalty costs as we continue to reacquire RD territories. Selling and marketing expense was $2.7 million, down 4% from the prior year period, primarily due to lower system sales. Depreciation and amortization expense was $262,000, while G&A expense decreased 6% to $6.9 million from $7.3 million in the third quarter of 2025.

Net income from continuing operations was $1.5 million, compared with $290,000 in the same period last year. Including discontinued operations, consolidated net loss was $117,000, or $0.01 per share, compared with consolidated net income of $855,000, or $0.06 per diluted share in the prior year period. Adjusted EBITDA from continuing operations increased to $2.3 million from $1.4 million a year ago, reflecting the improved operating leverage of our franchisor model.

Now onto the balance sheet and liquidity. Unrestricted cash at the end of the third quarter was $18.3 million compared with $22.2 million at the end of the second quarter. Subsequent to quarter end, we paid $8 million at closing to reacquire the Texas RD rights. Operating cash flow was negative $128,000, and free cash flow was negative $509,000 in the third quarter, primarily reflecting a $1.5 million payment in the quarter for a legal settlement from 2024. This compares to operating cash flow of $1.8 million and free cash flow of $1.5 million in the prior year period. We expect free cash flow to improve as the remaining ownership transfers are completed. We maintain our $20 million line of credit with JPMorgan Chase, which remains fully undrawn and available through August 2029. Together, our cash position and undrawn credit facility provide flexibility to execute our capital allocation framework while maintaining appropriate liquidity.

Turning to Slide 15, our approach to capital allocation remains balanced. Our first priority is to invest in initiatives that support sustainable system-wide growth. We also evaluate regional developer territory buybacks and share repurchases based on their expected returns, strategic value, and the liquidity needs of the business. RD territory buybacks improve our economics by allowing us to recapture approximately two-thirds of the royalties previously paid to the regional developer. They also give us a more direct relationship with franchisees, supporting the operating and development priorities Sanjiv outlined.

As I just noted, on October 1, we reacquired the Regional Developer Rights for Texas, our largest RD territory, representing 141 franchised clinics, for $8 million in cash at closing, and up to $2 million in potential additional consideration tied to gross sales in the region over the next 2 years. Including Texas, we have announced 5 RD territory buybacks in 2026, totaling 189 clinics. Together, these territories are expected to reduce RD royalties by approximately $3 million on an annualized basis, with about one-third of that benefit offset by internal cost to manage them.

Share repurchases are another way to create value and return capital to shareholders when market conditions make them an attractive use of cash. During the third quarter, we repurchased approximately 461,000 shares for $3.8 million at an average price of $8.30 per share, completing the $12 million authorization approved in November 2025. Subsequent to the quarter end, our board approved an additional $5 million authorization, giving us continued flexibility to repurchase shares opportunistically. We will continue to balance these uses of capital while preserving appropriate liquidity and capacity to invest in the business.

On to Slide 16, let's discuss our clinic count. Total clinic count was 930 at the end of the third quarter. During the quarter, we opened 4 clinics, closed 15 clinics, and refranchised 26 clinics. Our newer clinics continue to perform well, supporting our confidence that our more disciplined approach to operator quality, site selection, and opening support is producing a healthier foundation for future unit growth. We continue to work with franchise owners to optimize the existing clinic base. This includes closing underperforming clinics, which we expect will result in the overall clinic count at year-end being approximately 50 clinics below year-end 2025. We expect to get back to clinic growth beginning next year.

On Slide 17, I'd like to briefly revisit the financial profile of our pure-play franchisor model. The Joint is now operating with a right-sized structure with lower G&A expense and improved profitability from continuing operations. We continue to view the model parameters previously introduced as starting points once the remaining ownership transfers are complete rather than long-term targets. As a reminder, these starting points include gross margin of 83% to 85% of revenue, G&A expense of 40% to 42% of revenue, capital expenditures of approximately 3% of revenue, and free cash flow conversion of 60% to 70%. Together, these starting points would imply an adjusted EBITDA margin of 19% to 21% and a net income margin of 13% to 15%. We intend to build on this profile in 2027 and beyond.

On Slide 18, we are updating our full year 2026 financial guidance to reflect results through the first 9 months and continued macroeconomic pressure on consumer spending. We now expect system-wide sales of $508 million to $512 million, compared with our prior range of $519 million to $552 million. System-wide comp sales are expected to be in the range of negative 3.5% to negative 2.5%, compared with our prior range of negative 3% to positive 3%. We are reiterating our consolidated adjusted EBITDA guidance of $12.5 million to $13.5 million. As noted earlier, we expect total clinic count at year-end 2026 to be approximately 50 units below year-end 2025 as we continue to optimize the existing clinic base.

Our updated outlook reflects continued pressure on consumer spending. At the same time, improvements in active membership, retention, patient lifetime value, and newer clinic performance give us confidence that the business is well-positioned to return to growth as our initiatives take hold.

With that, I'll turn it back over to Sanjiv.

Sanjiv Razdan

Thanks, Scott. Let me look at Slide 20. The third quarter reflects meaningful progress in the areas that will support the long-term health of the business. We grew our active membership count, with members staying with us longer. Total dollars per active member increased, and conversion and retention are improving. Together with stronger new clinic performance, these are important building blocks for future growth. We are confident that the underlying operating indicators are moving in the right direction. The business is structurally stronger and our priorities remain clear.

Our priority for 2027 is clear. We are single-mindedly focused on improving comp sales.

With that, operator, we are ready for questions.

Operator

[Operator Instructions] The first question comes from Jeremy Pearlman from Maxim Group. Please go ahead.

Phần hỏi đáp

Jeremy Pearlman

Firstly, you mentioned that some of the newer franchised clinics are actually performing well. What do you attribute that to, and how do you replicate that to the current franchise base?

Sanjiv Razdan

Yes, great question, Jeremy. Thank you. This is Sanjiv. We attribute that to 3 fundamental things.

#1, the rigor that we are applying to site selection is exponentially more than what we have applied historically.

#2, we have brought on some very well-capitalized, strong operators, boots on the ground, and the openings that we've seen with them are very strong.

#3, and perhaps most importantly, we are enforcing compliance with pre-opening protocols of how we expect franchisees to market a clinic even before it opens. In a membership-based model, it's highly critical to have a strong lead generation even before the doors open to make sure that the franchisee and the clinic gets to break-even sales very, very quickly. We feel like we have that playbook, and we are not allowing any clinic to open without compliance with that playbook, and we're also supporting our franchisees in their ability to achieve the outcomes.

Jeremy Pearlman

Okay, I understand. That's great. And then maybe just, you know, you're rationalizing the actual base. You said there's going to be 50 or fewer locations by the end of this year compared to year-end 2025, is that just pretty much all the rationalization? And '27, I think you mentioned that's when you're going to start to, you know, the openings back up and...

Sanjiv Razdan

That is accurate.

Jeremy Pearlman

Okay, that's great. And then just the last question referring, you know, you said your active membership is up. That has to do with a new membership structure. So is that new membership structure generating incremental patient demand or is it primarily improving retention among existing customers?

Sanjiv Razdan

Yes, let me provide some additional context to that. So first of all, we're really pleased and encouraged that we have more active members in our system per clinic today than we did same time last year. To frame something we've shared previously, the average household income of our patients tends to be somewhere between $60,000 to $110,000. The lower end of that income band is also what is now often referred to as the bottom of the K-shaped economy. Those members are pressured in terms of disposable income.

We had done a significant amount of research earlier this year and last year to understand what the shifting consumer needs were. And what we learned was 3 things: patients stop staying with us because they're no longer in pain, they don't want to pay the membership fee or they feel unable to afford the membership fee for much longer, and often they don't have the time to enjoy up to 4 visits per month that their standard membership allows.

So as a result of that, we introduced some flexible membership options which were not only lower priced but also allowed them lower frequency of visits. These have been leveraged by our teams to help convert new patients into members and also prevent existing members from canceling their memberships. So what we're finding is that as a result, our retention is much higher, our conversion is much higher, and the patients that have come on to these flexible plans are staying with us for longer because this comes at a price and a visit frequency that they feel meets their needs better. So that is what we're seeing.

Now what is the upside of this? The upside is that the overall lifetime value is increasing, both in time spent and dollars. The downside of it is that in the short term, we are seeing a spend dilution per patient per month of roughly, to give you a sense, about $2. So when you think about $2, it's not in itself an enormous amount, but it is meaningful enough to erode the benefit at the moment of the upside that we're seeing in active members.

So we are now working to double down on retention and double down on improving our conversion and leveraging these. That's a long way of saying 2 things: 1, we are converting more patients into members as a result of these options, and 2, we're also preventing more cancellations as a result of these options.

Scott Bowman

Yes, just 2 quick thoughts here. Those new plans that Sanjiv mentioned...

Sanjiv Razdan

Yes, I can handle that. Oh, yes, sure.

Scott Bowman

The intent, 1 is for 2 visits a month, 1 for 1 visit a month. And 1 of the use cases is if, like Sanjiv said, if they can't afford or don't have the time for 4 visits a month, they can do 2 visits a month with the optionality of buying more visits for $25. So that's a really good step down if somebody doesn't want the full wellness plan, you can step them down to that. If somebody wants to cancel, they come in and they want to cancel their plan because they don't have the money or time, we can offer that or we can offer the 1-visit plan that has been very popular.

We're still optimizing the sales process of that to make sure that the sales of those plans are mostly incremental, which in most cases they are. There's some fine-tuning we'll continue to do, though. But we feel like those 2 plans really round out our offering, especially in times where people are a little strained financially. It works very well in that situation. So as we continue to optimize that mix, we think good things will happen. We're already seeing the retention and conversion improvement, early days, but there'll be more to come.

Jeremy Pearlman

Okay, great. And then just last question, you know, how much of the same-store comp sales decrease, how much do you attribute that to weakness in the underlying consumer versus maybe the franchise owner is not operating as well as he could be?

Scott Bowman

Yes. I mean, I think it's probably a combination. I mean, I think the macro, I don't think it's changed that much. You know, I think gas prices and overall inflation has had probably a little bit larger impact in the quarter. So I think there's that. So I think these new plans have helped us, but as Sanjiv mentioned, they've been somewhat offset by the lower average spend in the near term.

Jeremy Pearlman

All right. Thank you for all that information. I'll hop back into the queue.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Sanjiv Razdan for closing remarks.

Sanjiv Razdan

Thank you all for joining us today. Have a great day. And remember, at The Joint, we always have your back. Thank you, operator. Let's close out the call.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

This live transcript is auto-generated without human intervention or review.