Franchise Review: Why Planet Fitness is One of the Best Fitness Franchises for 2013
Planet Fitness was founded in 1992 and began franchising in 2003, but it seemed to hit its stride during the last five years, when a no-frills gym with low membership fees really began to appeal to health-crazed consumers in a struggling economy. As Franchise Chatter has reported previously, founder Mike Grondahl has described Planet Fitness as the Wal-Mart of the fitness industry, meaning it gives customers great value for a low price.
The low-cost, no-contract gym has been characterized as an “anti-fitness fitness club.” Rather than being confronted by pushy salespeople and paying for unused amenities, Average Joes and Janes can work out in a judgment-free environment with an emphasis on a wide selection of brand-name cardio and strength equipment, and unlimited fitness instruction with their membership. Monthly pizza parties and free Tootsie Rolls for members go along with the clubs’ anti-fitness image.
With an overall initial investment between $672,600 and $1.7 million, including $71,000 to $158,00 paid to the franchisor, investors may also find value in Planet Fitness and many have been attracted to the business model. Last year, the company marked a milestone by opening its 600th location in the United States, making it one of the fastest-growing gym franchise in the country. With approximately 4.4 million members in 48 states, it has phenomenal brand awareness, reinforced regularly by its presence as a national sponsor of the primetime NBC series “The Biggest Loser“—another plus for investors.
During the past few years, Planet Fitness, which has achieved annual revenues of $520 million, was in negotiations to sell the company and a plan to take it public was put on hold. Earlier this year, however, it partnered with a leading, strategic equity firm, TSG Consumer Partners LLC, which will enable it to further build its national brand, expand locations, and support its franchisees. Grondahl remains a member of the board of directors and 20-year Planet Fitness veteran Chris Rondeau is the new CEO.
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