Franchise: Planet Fitness
Franchising Since: 2003
Headquarters: Newington, N.H.
Number of Units: 976
About the Franchise
Michael Grondahl opened the first Planet Fitness in 1992, with a reduced membership to compete against better-known brands and a focus on occasional and first-time gym users.
In the last year, the Planet Fitness franchise has grown by 146 locations in the U.S., making it one of the fastest-growing franchises among fitness centers. With its focus on creating an easy-going and judgment-free environment, Planet Fitness continues to get more and more clients and franchisees.
RELATED: 10 FAST-GROWING FRANCHISES TO OWN
Every Planet Fitness location holds a pizza night for members once a month, as well as a bagel morning and Tootsie Rolls are available at all times. Each gym also has a “Lunk Alarm” to discourage behaviors such as grunting and dropping weights.
Financial Assistance
Financing for Planet Fitness is available.
Term of Agreement and Renewal
The length of the initial franchise term is 10 years and is renewable if the requirements are met.
Breakdown of Costs
The following information is compiled from the Franchise Disclosure Document of Planet Fitness (2015). The FDD will provide you with in-depth information regarding the costs and expenses you can plan to incur when developing a Planet Fitness franchise.
Initial Franchise Fee: $10,000
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.
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.
Leasehold Improvements: $450,000 to $1,825,000
The cost of purchasing or leasing and developing a site for a Planet Fitness franchise will vary considerably depending on the location, size, local real estate market, and other factors, and will depend on whether you are converting an existing fitness facility to a franchise or are opening a new location. Typically, you will need to lease a building of approximately 15,000 to 24,000 square feet and pay the cost of site work and/or leasehold improvements. Your leasehold improvement costs may be less if, for example, your landlord provides you with a tenant improvement allowance. 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.
Fitness Equipment: $31,990 to $784,000
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 $31,990 and $235,260. If you choose to purchase rather than finance the required equipment for your location, the cost to purchase the equipment will generally range between $319,900 and $784,200.
Non-Fitness Equipment: $15,200 to $380,000
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.
Pre-Sale Marketing: $30,000
The pre-sale 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 Marketing Period”). Planet Fitness will determine the length and start date of the Pre-Sale Marketing Period based upon the location of the 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.
Exterior Signs: $15,000 to $45,000
Computer System, POS System and Other Supplies: $10,880 to $18,800
Insurance: $10,000 to $15,000
Real Estate Lease Deposits: $0 to $57,000
Other Deposits: $700 to $11,000
Professional Fees: $2,000 to $25,000
Out-of-Pocket Initial Training Expenses: $1,500 to $6,500
Planet Fitness offers its franchisees two weeks of training at the company headquarters.
Licenses/Bonds: $100 to $2,500
Operating Cash (Additional Funds Pre-Opening and First Six Months: $150,000 to $565,000
This estimate includes working capital prior to opening your Planet Fitness location and for the first 6 months after you commence regular operations. The working capital includes your estimated pre-sale marketing expense during this period. You will incur additional expenses after the initial period.
ESTIMATED TOTAL: $728,000 to $3,777,800
These figures are estimates in setting up a Planet Fitness franchise and operating it for six months. It is possible to exceed costs in any of the areas above.
RELATED: HOW TO BUY A FRANCHISE
