17 Things You Need to Know About the Planet Fitness Franchise Opportunity

Planet Fitness Franchise Business Model

1.  Planet Fitness bills itself as the place for a clean, simple, no-pressure, and no-hassle workout.

2.  Planet Fitness gyms don’t employ any salespeople, and they don’t offer any of the special services common in upscale gyms.   This means no juice bars, childcare, aerobics, spinning, yoga, or personal training.  Instead, they offer what they think most members really want in a club —  clean, stylish, hassle-free facilities that are filled with tons of brand-name cardio and strength equipment in a friendly, non-intimidating environment.

3.  Planet Fitness is a cheaper, bare bones alternative to the big box gyms such as 24 Hour Fitness, Crunch, and ClubOne.  Mike Grondahl, one of the founders, describes Planet Fitness as the Wal-Mart of the fitness industry. Members pay $10 to $20 a month, and membership is month to month with no contract required.

4.  Planet Fitness is not the place for hardcore bodybuilders. Their niche market includes women and first-time or occasional gym-goers.  Their gyms are designed to be a place where people with normal body shapes can feel comfortable while getting in better shape.  They are “judgement-free zones” where macho behavior common at “muscle gyms” is discouraged. They don’t allow people to throw or drop weights. There is no cussing and no gym attitude that you find elsewhere.

5.  The clubs do not offer weights heavier than 75 pounds and discourage grunting with so-called “lunk alarms” that sound when members grunt. Three alarms and a lifter will be asked to find a new place to work out.  (And they are not afraid to enforce this rule.)

6.   Planet Fitness offers free pizza and bagels once a month.  And they give away free Tootsie Rolls, too.

7.  The average Planet Fitness has about 6,000 members.  A typical facility is 16,000 square feet and can be built new or fit into redesigned space likes an old grocery store or big box retailer. Each gym has 10-12 employees.

8.  The median (i.e. 50th percentile) Annual Membership Revenue for Planet Fitness is $1.7 million (versus the industry average of $1.2 million). Their median Annual Operating Revenue is $928,500 (versus the industry average of $233,000).  And their median Annual Payroll Expense Percentage is 28% (versus the industry average of 43%).  Clearly, their business model produces way above average results.

Planet Fitness Franchise History and Growth

9.  Planet Fitness was founded in 1992 by Mike and Marc Grondahl and Chris Rondeau.  Marc and Mike, who first managed a Gold’s Gym for 10 months before it went bankrupt, bought a health club in Dover, New Hampshire. Out of necessity, the Grondahls offered a one-time $99 fee for the year to raise money. They sold 2,300 memberships in four months (at Gold’s they didn’t sell 500 in a year).

10.  Planet Fitness began franchising in 2003.    At the end of 2010, they had 436 locations open across the United States.

Planet Fitness Franchise Cost

11.  The total initial investment to open a Planet Fitness gym ranges from $530,100 to $1,433,000.  The franchise fee is $25,000 and ongoing monthly royalty is 5% of gross sales.

12.  To develop a single unit, the minimum combined net worth of all partners is $1.3 million, of which $400,000 must be liquid.  To develop an area (minimum of 5 clubs), the minimum combined net worth of all partners is $2 million, of which $800,000 must be liquid.

Planet Fitness Franchise Accolades

13.  In 2011, Entrepreneur Magazine ranked Planet Fitness #81 in their Franchise 500 list, #34 among the Fastest Growing Franchises, and #68 among America’s Top Global Franchises.

Planet Fitness Press Coverage (AKA Sources for this Post)

14.  No-frills fitness club pumps up in lean times by J.K. Dineen for the San Francisco Business Times

15.  A Gym for the Rest of Us by James Freeman for the Wall Street Journal

16.  Planet Fitness opening second D-FW location by Katherine Cromer Brock for the Dallas Business Journal

17.  It’s a Planet Fitness World by Erica Cohen for BusinessNH Magazine