Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

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FDD Talk 2013: Revenue and Operating Income Statement for Planet Fitness Corporate-Owned Locations (2013 FDD)

by Franchise Chatter on May 23, 2013

in Fitness Franchises, Franchise Earnings



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Highlights of Planet Fitness’ Item 19 Financial Performance Representations (2013 FDD)

  • At December 31, 2012, there were 42 corporate Planet Fitness locations operating for at least 12 months.
  • Planet Fitness excluded the corporate clubs that it deems “outliers,” that is, the two lowest performing corporate centers. The two lowest performing corporate locations had total annual revenues of $322,584 and $633,519. Particularly as it relates to the total annual revenues achieved by the two lowest performing Planet Fitness corporate locations, Planet Fitness does not believe these results are typical for a Planet Fitness business.
  • The remaining 40 clubs were ranked, by annual gross revenue, in order from lowest to highest. The three locations identified below are the lowest ranked in their respective quartile for the 25th, 50th, and 75th percentiles in terms of total annual revenue.
  • Planet Fitness has not included any franchisee expense information in the following table because the company does not receive complete expense information from its franchisees. Your results may differ.

Notes for Revenue and Operating Income Statement for Corporate Planet Fitness Locations

  • Planet Fitness Interior Photo by Urban Partners GroupRevenue – The principal source of revenue for a Planet Fitness club is membership fees. Membership fees are usually paid in cash or through electronic transfer of funds.
  • A fitness facility will also earn additional revenue through an annual membership fee, beverage sales, tanning goggles and lotions, Planet Fitness apparel and headphones.
  • Membership fees are typically paid monthly. One membership package remains constant while the others are offered periodically throughout the year. The “Black Card” is Planet Fitness’ constant membership package; it requires a 12 month contract. Planet Fitness offers the “Black Card” for $19.99/month with an annual fee of $39 which is paid once a year in June.
  • Included with the Black Card is free tanning, half priced beverages, free massage chair usage, access to any other Planet Fitness club, and ability to bring a guest for free to your home club.
  • Promotional packages are offered at different times during the year and a franchisee has the ability to tailor the package to their club based on the benefits that come with the package.
  • For those members that are not Black Card members, the annual maintenance fee is billed once a year in October.
  • Your ability to sell memberships will depend on a variety of factors, including but not limited to, factors related to your market, how much time and effort you spend on sales, advertising, and your sales ability.
  • Costs and Expenses – The expense information included in the Operations Statement reflects the costs and expenses of the corporate locations included in the statement plus an amount equal to the royalties the location would have paid if it were a franchised location. You may incur other expenses.
  • Rent – Your rent can vary significantly depending on the size and location of your club. Certain markets have substantially higher real estate costs than others and any prospective franchisee is urged to investigate local market real estate costs prior to making any assumption about what their costs will be.
  •  Advertising – The advertising amounts listed below reflect the actual amounts these corporate locations spent on local advertising, as well as the annual NAF (previously the National Advertising Fund) contribution.
  • Franchisees must spend the greater of $5,000 per month or 7% of the total EFT Membership Dues Draft on local advertising. The amount a club spends on advertising above the required minimum varies depending on the club.
  • The advertising is performed through a preferred corporate vendor.
  • NAF creates and develops marketing, advertising, and related programs and materials, including electronic, print, and internet media as well as the planning and purchasing of national and/or regional network advertising. Franchisees must contribute 2% of the total EFT Membership Dues Draft to the NAF.
  • Royalties are paid monthly and are based on a flat percentage of the total gross EFT Dues Draft (currently, 5%). Corporate clubs, including the three referenced below, do not pay a royalty to Planet Fitness. Despite this, Planet Fitness has included an expense category reflecting the payment of “Royalties” for illustration purposes only.
  • Miscellaneous – Miscellaneous expense includes pizza, bagels, filing fees, licenses, permits, gifts, travel/meals, postage, online join expense, and professional fees. Many of these costs can vary significantly depending on your location and the time you spend looking for the best possible cost on these items.
  • Insurance – Insurance costs vary on a club-by-club basis. The insurance costs noted in the statement below are based on bulk buy pricing for multiple clubs. Your rates may differ based on various factors.
  • Bank and Credit Card Charges – Bank and credit card charges will vary based on the banking institution used and type of club membership draft. Drafting membership fees from credit cards will result in higher fees than membership fees drafted from bank accounts.
  • Sales and Use Tax – Sales and use tax will vary based on the location of the club. Every state will have different rules applying to sales and use tax.
  • Operating Income – This figure does not include any provision for income taxes or non-cash expenses such as depreciation or amortization. It also does not include any expense assumption related to the capital structure of the franchisee entity or any reserve for future capital expenditures.
  • The statement also does not factor in your initial franchise fee or other initial investment expenses, including expenses for a lease/purchase of equipment. Planet Fitness anticipates that every franchisee will fund their initial investment differently, and it therefore cannot make any assumptions on how you would account for these items.


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