If you love going to the gym, a Planet Fitness franchise business is a perfect fit for you. In fact, you can choose from several roles – franchise ownership with management or franchise ownership with an owner who’s actively involved in fitness training services. Potential franchisees should review the franchise disclosure document to understand all the terms and conditions.
Planet Fitness offers more than just a gym membership. Planet fitness franchisees pride themselves in offering support to its members, to keep them actively using their Planet Fitness membership benefits.
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What is Planet Fitness Franchise?
Planet Fitness is a leading fitness franchise that offers a unique and affordable gym experience to its members. Founded in 1992 by Marc and Michael Grondahl, Planet Fitness has grown to become one of the largest fitness chains in the US, boasting over 2,000 locations across 50 states, Canada, Latin America, and Australia. The franchise is renowned for its “Judgement Free Zone” philosophy, which aims to create a welcoming and non-intimidating environment for people of all fitness levels. This inclusive approach has made Planet Fitness a popular choice for individuals seeking a supportive and friendly gym atmosphere.
Basic Facts About Planet Fitness Franchises
Yes, the Planet Fitness franchise includes the typical exercise machines and free weights. But there’s more:
- Fitness training services, such as working with a personal trainer. The personal trainer may be a staff member who is assigned to a group of members.
- Tanning booths and equipment.
- Cardio equipment such as treadmills and stair steppers.
- Annual membership fees are payable on a monthly basis and can be paid as an internet membership.
- A Planet Fitness Franchisee gets extensive on-the-job and classroom training, in using equipment and with implementing safety procedures. Some training takes place at company headquarters.
- There are currently more than 2,000 Plant Fitness franchises in the US, in 49 states and Washington DC. The company started in New Hampshire.
- The Planet Fitness business franchise began in 2003
- The franchise is strongest in the south, where there are about 700 Planet Fitness franchises. The franchise is expanding into other areas of the country.
- In the fitness industry, Planet Fitness businesses focus on being a “judgement free zone” – by creating a welcoming environment for people with various fitness goals in all stages of their fitness journey. In other words, members of all ages, sexes, and fitness levels are treated kindly and in a supportive manner.
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Planet Fitness Franchise Cost
It’s relatively expensive to get into this franchise, given the cost of the equipment and gear. It’s expensive to outfit and equip the franchise from an empty building to a working fitness center.
The initial franchise fee is $20,000, but a franchise owner’s wanna-be needs to have working capital (liquid assets and liquid capital) and a minimum net worth of from $200,000 to $700,000. The total investment range can be about $1 million, but the initial investment can be as high as $4 million. That depends greatly on the cost of real estate in the area, and also whether the franchisee is doing a remodel of an existing building or building a new facility. Those costs are comparable to similar franchises.
The minimum and maximum fees vary depending on actual costs. For example, Planet Fitness franchising may consider new franchisee applications that want to remodel an existing building.
They may even approve alternative suppliers for some of the equipment and gear. Those agreements/arrangements would be spelled out in the franchise agreement. Detailed information about the financial requirements can be found in the franchise disclosure document.
Initial Investment Breakdown
Investing in a Planet Fitness franchise requires a significant initial investment, which ranges from $969,600 to $4,242,500. This investment covers various costs, including the initial franchise fee, leasehold improvements, construction costs, equipment, and inventory. Here’s a detailed breakdown of the initial investment:
- Initial franchise fee: $20,000
- Leasehold improvements: $1,250,000 to $2,163,000
- Construction costs: $500,000 to $1,000,000
- Equipment and inventory: $200,000 to $500,000
- Other costs (marketing, training, etc.): $100,000 to $200,000
These costs reflect the comprehensive setup required to establish a fully functional Planet Fitness center, ensuring that franchisees are well-equipped to provide top-notch fitness services.
Planet Fitness Franchise Fees
After the initial franchise fee, the new franchisees will also pay other fees such as administrative costs and ongoing fees including a 7% royalty fee. Of course, if leasing real estate that will also be a monthly fee. You’ll also pay a national advertising fund fee and a local advertising fee.
Are the fees and costs worth it? Well, you’ll get training and ongoing assistance from company headquarters, which will also help you create a grand opening event. Through the brand name, you’ll benefit from the existing national exposure.
Your franchise location will be protected from others, allowing other Planet Fitness franchises to be located in your area. You’ll have an exclusive territory as part of the area development agreement. All those things will be spelled out in the franchise disclosure document.
Ongoing Fees and Expenses
As a Planet Fitness franchisee, you will be responsible for several ongoing fees and expenses to maintain and grow your business. These include:
- Royalty fee: 7% of monthly gross revenue
- Ad royalty fee: 9% of monthly gross revenue
- Local advertising fee: $60,000 or 7% of total gross monthly membership fees
- Balance payment administration fee: $10,000 per year
- Other expenses (marketing, training, etc.): $10,000 to $20,000 per year
These fees ensure that you receive continuous support and benefit from national and local advertising efforts, helping to attract and retain members.
Planet Fitness Franchise Profit
The franchise profit depends on several factors, such as your commercial lease rates, if applicable. Franchise costs also vary by location (which can define your labor costs), utility costs and the cost of other supplies, such as cleaning materials. For detailed information about the potential financial returns, refer to the franchise disclosure document.
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Planet Fitness Franchise Owners’ Salary
Your gross monthly take is based on your memberships, which range from $10 to $25 per month for the franchise. After you cover your startup costs, your total gross monthly take could greatly exceed your expectations, depending on how many memberships you sell.
Similar fitness centers franchises cite the same challenge – getting members may be relatively easy, but retaining them can be challenging. Your sale system needs to include regular contact with members to make sure they’re using the facility and being supported by your staff.
In the fitness/gym industry, here’s a staggering statistic – about half of the people who sign up for memberships never go. And those are the people who don’t renew their memberships.
What can you make? The majority of Planet Fitness franchisees make $50,000 a year or more in the first year, which is a top number in the franchise industry. That’s after paying customer service reps ($ 12-hour average), an overnight manager ($14 hourly), and a manager ($40,000 annually). For detailed information about the financial aspects of owning a franchise, refer to the franchise disclosure document.
Support and Training for Planet Fitness Franchisees
Planet Fitness provides comprehensive support and training to its franchisees to ensure their success. This includes:
- Two weeks of training at the company headquarters: This initial training covers all aspects of running a Planet Fitness franchise, from equipment usage to safety procedures.
- Ongoing assistance: Franchisees receive continuous support through advertising, a dedicated phone line, safety procedures, meetings, newsletters, and a grand opening event.
- Classroom training: 80 hours of classroom training to equip franchisees with the necessary knowledge and skills.
- Additional training: Ongoing training opportunities to keep franchisees updated on the latest industry trends and best practices.
- Absentee ownership allowed: Flexibility for franchisees who prefer to take a more hands-off approach.
This robust support system ensures that franchisees are well-prepared to manage their fitness centers effectively.
Planet Fitness Franchisees Requirement
As we’ve stated, you need a strong financial standing to qualify as a franchisee with a franchise agreement. But you’ll need more than that to run a Planet Fitness business:
- Net worth of $3 million
- Liquid capital of $1.5 million
- People skills, public relations experience
- Gym experience – familiarity with fitness equipment and gear
- Fitness Program skills – able to assist members in developing their goals
Why Choose Planet Fitness?
Choosing a Planet Fitness franchise comes with numerous benefits, making it a compelling investment opportunity. Here are some reasons why you should consider Planet Fitness:
- Low-cost options for casual gym-goers: Planet Fitness offers affordable membership plans, attracting a broad customer base.
- Welcoming environment for anyone: The “Judgement Free Zone” philosophy creates a supportive and inclusive atmosphere for all members.
- Strong brand recognition and marketing strategy: Planet Fitness is a well-known brand with a proven marketing strategy that helps attract and retain members.
- Stable base of loyal clients over the years: The franchise has built a loyal customer base, ensuring steady revenue.
- Recession-proof business model: The fitness industry remains resilient even during economic downturns, providing a stable business opportunity.
- Opportunities for growth and expansion: With a strong brand and proven business model, there are ample opportunities to grow and expand your franchise.
Investing in a Planet Fitness franchise means joining a successful and supportive network, with the potential for significant financial and personal rewards.
Is Opening a Planet Fitness Franchise Worth It?
Planet Fitness franchise opportunities aren’t plentiful, although the company is expanding into new areas with more franchises.
With your franchise you’ll get health, dental and life insurance, as well as a retirement plan and the ability to earn Planet Fitness stock.
As we asked at the outset, do you love going to the gym? Love working out? Love helping and instructing others as they strive to reach their fitness goals?
Then, it may be time to turn your favorite hobby into your job. If you love what you do, you’ll be successful in the Planet Fitness business. For detailed information about the overall value of the franchise, refer to the franchise disclosure document.
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This article, "Planet Fitness Franchise Ownership FAQs" was first published on Small Business Trends
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