Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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  • Planet Fitness
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Franchise Costs: Detailed Estimates of Planet Fitness Franchise Costs (2017 FDD)

by Franchise Chatter on May 19, 2013

in Fitness Franchises, Franchise Costs

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Planet Fitness Interior Photo by Urban Partners Group

This post was updated on June 26, 2017 to reflect information from Planet Fitness’s 2017 FDD (Item 7).

Detailed Estimates of Planet Fitness Franchise Costs Based on Item 7 (Estimated Initial Investment) of Planet Fitness’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $20,000

  • If you sign an Area Development Agreement, you will pay an Area Development Fee of $10,000 per location, and you must commit to opening a minimum of 5 Planet Fitness locations.
  • If you pay an Area Development Fee, you will not pay the initial franchise fee for or related to locations you open under the Area Development Agreement.

2.  Site Selection Costs:  $1,000 to $3,000

  • Planet Fitness may require you to reimburse the company for their reasonable expenses, including the costs of travel, lodging, and food, incurred in site evaluation for each visit they make at your request.

3.  Construction Development Plan Review Fee:  $0 to $1,750

4.  Leasehold Improvements:  $636,000 to $1,983,000

  • The estimated initial investment does not include real estate beyond the initial lease deposit. Planet Fitness does not require you to acquire real estate.
  • Planet Fitness businesses typically are located in strip centers, malls, and freestanding locations. Typically, you will need to lease a building of approximately 15,000 to 25,000 square feet and pay the cost of site work and/or leasehold improvements.
  • Your leasehold improvement costs may be significantly less if, for example, your landlord provides you with a tenant improvement allowance. Depending on location, desirability of the landlord to rent the property, and other factors, tenant improvement allowances can range from $0 to $600,000.

5.  Fitness Equipment:  $35,930 to $944,800

  • You must purchase or finance the fitness equipment and other non-fitness equipment (such as televisions, tanning beds, trusses, lockers, interior signage, flooring, fans, and the like) for your location through the approved supplier of Planet Fitness.
  • Typically, you will finance the equipment and you are responsible for providing financing. Planet Fitness estimates that the cost to make down payments on financed required fitness equipment for a new location generally ranges between $35,930 and $283,440.
  • If you choose to purchase rather than finance the required equipment for your location, the cost to purchase the equipment will generally range between $359,300 and $944,800.

6.  Non-Fitness Equipment:  $17,550 to $369,700

  • Planet Fitness estimates that your cost to make down payments on non-fitness equipment generally ranges between $10,100 and $85,500with the total estimated cost to purchase the non-fitness equipment ranging between $101,000 and $285,000.
  • The amount of your down payment on financed equipment, as well as the purchase price of the equipment (should you choose not to finance), may vary depending on the size of your location and your financing terms.
  • If you are converting an existing facility to a Planet Fitness franchise, the cost of the equipment may be less depending on whether the existing equipment (both fitness and non-fitness equipment) meets the standards of Planet Fitness.

7.  Pre-Sale/Grand Opening Marketing:  $20,000 to $30,000

  • The stated amount is an estimate of the amount you will spend on pre-sale/grand opening marketing prior to commencing operations. The remaining pre-sale/grand opening marketing expenditure is included in the “Additional Funds” category.
  • The pre-sale/grand opening marketing period typically begins no less than 45 days immediately preceding the date that you commence regular operations at your Planet Fitness location, and it may be as long as 180 days thereafter (“Pre-Sale/Grand Opening Marketing Period”).
  • Your total pre-sale/grand opening marketing is subject to a cap of $120,000.
  • Planet Fitness will determine the amount of the Pre-Sale/Grand Opening Marketing Expense and the length and start date of the Pre-Sale/Grand Opening Marketing Period based upon the location of the Planet Fitness business, demographics, and other factors.
  • Pre-sale marketing expenses will include a variety of marketing, public relations programs, media, and advertising materials that Planet Fitness approves.
  • You will conduct your pre-opening marketing efforts from a temporary facility located at or near the site of your future Planet Fitness location.
  • Planet Fitness must grant its acceptance of the proposed physical location of your pre-opening marketing temporary facility. The temporary facility must be clean and in good repair, provide you with good visibility to the public, conform to the franchise’s network security requirements, and display the marks in the form and manner Planet Fitness specifies.
  • Possible temporary facilities include, among other things, small retail space or a trailer that is used solely for pre-sale marketing efforts and satisfies the above criteria. Your temporary facility for pre-opening marketing cannot be your home or a residence of any kind.

8.  Exterior Signs:  $15,000 to $30,000

9.  Computer System, Point of Sale System, and Other Supplies:  $13,000 to $21,000

10.  Insurance:  $10,000 to $20,000

11. Real Estate Lease Deposits:  $0 to $50,000

  • The amount of your deposit is heavily dependent on your negotiations with your landlord.

12.  Other Deposits:  $0 to $25,000

  • This estimate is based on the deposits typically paid by Planet Fitness’ corporate locations.

13.  Professional Fees:  $2,000 to $25,000

14.  Your Out-of-Pocket Initial Training Expenses:  $1,500 to $6,500

15.  Licenses/Bonds:  $100 to $5,000

  • The costs of the licenses and bonds you must acquire may vary significantly depending on the laws that apply in your jurisdiction.

16.  Operating Cash (Additional Funds Pre-Opening and First Six Months):  $85,000 to $700,000

  • This estimate includes expenses prior to opening your Planet Fitness location and marketing and certain startup expenses for the first 6 months after you commence regular operations. The expenses include your estimated pre-sale/grand opening marketing expense during this period. You will incur additional expenses after the initial period.
  • These figures are estimates based on Planet Fitness’s and its affiliates’ 10 plus years of experience, and your experience may vary depending on whether you finance tenant improvements, your location, and other factors. You may need additional operating capital, or you may need it for a longer period of time.

17.  Total:  $857,080 to $4,234,750

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