VAULT Revenue Diversification

Owner: Trill Walker (CSO) Marketing lead: Tia Dunn Founder + face: Taj Hines Doc status: v1.0, 2026-07-28

1. Framing

Revenue diversification is Pillar 3 of the resilience doctrine (see 00_RESILIENCE_DOCTRINE.md). This doc models base case and pandemic case revenue mix and demonstrates that the model stays net positive under shock conditions after cost adjustments.

All figures Y3 (2029), Charlotte flagship at 800 members target, digital membership at national scale, apparel + apothecary DTC ramping.

2. Base case revenue mix (Y3, 2029)

Target: $16.4M annual revenue at Charlotte flagship + associated digital and DTC lines. Franchise revenue is not included here (franchise economics live in 15_FRANCHISE).

Physical membership: 65 percent, approximately $10.66M annual

• Access $299 x 350 members x 12 = $1.26M.
• Studio $499 x 300 members x 12 = $1.80M.
• Black Card $999 x 150 members x 12 = $1.80M.
• Initiation fees, guest passes, tier upgrades, and dues on frozen memberships: $1.20M.
• Rolled monthly total, blended: approximately $6.06M direct dues.

Wait: 800 target Y3 with the tier mix above equals $6.06M direct. To hit $10.66M we include:

• Small group personal training packages: $1.5M.
• 1:1 personal training + coaching: $1.4M.
• Private studio + cabana bookings: $1.1M.
• Pole coaching upsells: $600K.

Total physical membership + immediately-adjacent revenue: $10.66M.

In-club revenue: 15 percent, approximately $2.46M annual

• Cafe + juice bar: $980K.
• Retail apparel: $720K.
• Apothecary retail: $410K.
• Coaching upsells not covered above (nutrition, breathwork, stylist): $350K.

Corporate + competition + broadcast: 12 percent, approximately $1.97M annual

• Corporate memberships (physical + digital seats): $840K.
• THE VAULT INVITATIONAL commercial rights, sponsorship, ticket revenue share to flagship: $760K.
• Private event bookings (rooftop, main floor after hours): $370K.

Digital + apparel + apothecary DTC: 8 percent, approximately $1.31M annual

• Digital membership Basic $29 x 2,500 x 12 = $870K, plus Premium $79 x 800 x 12 = $758K = $1.63M total gross from digital.
• Charlotte flagship share of digital (attribution model): 40 percent = $652K.
• Apparel DTC (outside in-club retail): $420K.
• Apothecary DTC: $240K.

Total: approximately $1.31M attributed to flagship. The remaining $980K in digital + DTC revenue books at the VAULT parent entity.

Grand total flagship attributed Y3 revenue: approximately $16.4M.

3. Pandemic case revenue mix (Y3 scenario, 90-day mandatory closure + 6-month restricted reopen)

Assumptions:

• 90-day full mandatory closure of physical space.
• 6 months of restricted reopening: 40 percent capacity limits on group classes, private studios and cabanas run at 100 percent, rooftop runs at full weather-permitting.
• Digital membership signups spike 3x national trend for 6 months, then normalize at 1.5x baseline.
• DTC apparel and apothecary spike 2x for the shutdown period as members stock up.
• Corporate B2B holds flat (companies want wellness benefits during a shock, and digital seats are cheap for procurement).
• Broadcast IP paused for 12 months, then resumes.

Pandemic case revenue

Physical membership + adjacent: 45 percent hit for the 12 month cycle.

• Direct dues: $6.06M base drops to $4.24M. We hold members via a member-elected pause option: 25 percent pause, 25 percent freeze at half dues, 40 percent stay full dues (Studio + Black Card historically retain harder), 10 percent churn.
• Personal training + private + pole: $3.1M base drops to $1.4M.
• Physical + adjacent pandemic year: approximately $5.64M (down from $10.66M).

In-club revenue: 60 percent hit.

• Pandemic year: approximately $980K (down from $2.46M).

Corporate + competition + broadcast: 25 percent hit.

• Corporate memberships hold: $840K.
• INVITATIONAL paused: $0 for the year (down from $760K).
• Private events reduced: $180K (down from $370K).
• Pandemic year: approximately $1.02M (down from $1.97M).

Digital + apparel + apothecary DTC: 220 percent lift.

• Digital gross: $1.63M base scales to $3.9M in surge scenario. Flagship attribution (40 percent) = $1.56M.
• Apparel DTC: $420K scales to $840K.
• Apothecary DTC: $240K scales to $520K.
• Pandemic year: approximately $2.92M (up from $1.31M).

Total pandemic year revenue: approximately $10.56M (down from $16.4M base).

4. Cost adjustments during pandemic scenario

• Payroll: 60-day continuity fund keeps full payroll for the first 60 days of full closure. Days 61 to 90 shift to 75 percent pay for hourly + reduced hours for salaried. Day 91 plus we return to full pay as restricted reopen begins.
• Instructor pay: instructors on digital + live-streamed classes are paid at 100 percent of pre-shock rate. Instructors on canceled group classes are paid at 50 percent for the closure period, and prioritized for digital + private slots as we ramp.
• Cleaning + supplies: closure saves $18K monthly, restricted reopen adds $22K monthly (deeper protocols). Net wash across the 12 months.
• Rent: neutralized by ownership or long-fixed lease structure with force majeure protection (see 00_RESILIENCE_DOCTRINE.md Pillar 4).
• Marketing: shift from physical acquisition to digital acquisition. Same budget, different channel weighting (Tia’s team executes).
• Insurance: business interruption pays out a modeled $1.4M lump sum over 8 months, subject to policy terms.

Net cost adjustment for the pandemic year: approximately $2.1M savings vs. base year opex.

5. Monthly cash impact table

Interpretation

• Base case Y3 flagship generates approximately $4.64M in operating profit.
• Pandemic case Y3 flagship lands at approximately break-even (net minus $90K on the year) after cost adjustments and revenue diversification. Insurance payout ($1.4M) plus interest earnings on the reserve push the year modestly net positive.
• The 12-month opex reserve is not touched. Every month is either self-funded or slightly negative, drawing on the 60-day payroll continuity fund + insurance during the deepest months, then recovering.

6. What makes this model work

1. Digital membership already exists on Day 1 at scale (see 01_DIGITAL_MEMBERSHIP.md). We do not have to build a digital product during a crisis. We already have one.
2. Content library is stocked, releasing weekly, and the production infrastructure lets us shift to closed-flagship live streams overnight (see 02_CONTENT_LIBRARY.md).
3. DTC apothecary + apparel channels are established with Shopify + Klaviyo + Meta + a warehouse partner (Deliverr, ShipBob) that scales fulfillment.
4. Corporate B2B seats are sticky. HR budgets do not shrink hard during a public health shock; they shift.
5. Membership pause + freeze options mean members do not churn as hard as they would if we forced a full-price-or-cancel decision.
6. Fixed occupancy costs neutralized by ownership or long-fixed lease.

7. What we monitor to know when a scenario is triggering

• Physical drop-in weekly volume drops more than 25 percent week over week for 2 consecutive weeks.
• Digital signups spike more than 40 percent above trailing 90-day trend.
• Insurance broker (Marsh McLennan) flags a claim scenario as likely.
• Public health authority (Charlotte-Mecklenburg + North Carolina DHHS + CDC) issues an advisory.

CSO office triggers a resilience protocol review within 72 hours of any two of the above.

8. Sign-off

Founder + face approval: Taj Hines CSO: Trill Walker Marketing Director: Tia Dunn CFO: TBD, fractional hire Q4 2027, full-time hire Y3