Risk Score
Pending analysis
Investment Range
$1,504,600 - $5,158,500
Min Cash Required
$61,000
Total US Locations
2,455
Business Summary
Planet Fitness operates fitness training facilities that provide exercise machines, free weights, and fitness training services. It also offers related amenities and sells ancillary goods. The brand is designed to appeal to health-conscious consumers who value a low-pressure, judgment-free fitness environment.
Corporate History
Planet Fitness's brand journey began in November 2000 with the organization of PFIP, LLC, which owned the brand's marks and intellectual property. The predecessor franchising entity, Pla-Fit Franchise, LLC, was organized in January 2003 and started offering franchises for Planet Fitness businesses in February 2003, continuing until July 2018. The current franchisor, Planet Fitness Franchising LLC, was formed in June 2018 and began offering franchises in August 2018. Planet Fitness, Inc., the ultimate parent company, was incorporated in Delaware in March 2015 and became a publicly traded company in August 2015.
Financial Overview
Investment Range
$1,504,600 - $5,158,500
Franchise Fee (High)
$20,000
Minimum Cash Required
$61,000
Royalty %
7%
Marketing %
7%
Equipment Costs (Low)
$120,000
Equipment Costs (High)
$2,096,000
Working Capital
$289,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Planet Fitness Franchising LLC's financial statements show a strong net income, reporting $276,831,000 in 2023 and $236,751,000 in 2022. While the company has an accumulated deficit in member's equity, this is primarily due to large dividends paid to its parent company. The independent auditors have issued an unqualified opinion, meaning the financial statements fairly present the company's financial position, although they highlight various agreements with its parent and affiliates. These agreements cover administrative, management, and support activities, and the financial statements may not fully reflect conditions if Planet Fitness Franchising LLC operated as a completely unaffiliated entity. The company's ultimate parent, Planet Fitness, Inc., is a publicly traded company, and its consolidated financials also reflect an accumulated deficit in stockholders' equity due to similar distributions. Overall, Planet Fitness appears to be generating significant revenue and net income.
Financing Details
Planet Fitness does not offer any direct or indirect financing to its franchisees. Additionally, Planet Fitness does not guarantee any franchisee notes, leases, or other obligations. Franchisees are responsible for securing their own financing through third-party lenders.
Performance Metrics
Total US Locations
2,455
Franchised Units
2,201
Corporate Units
254
Avg Square Footage
20,000
Franchising Since
2003
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
7
Litigation Summary
Planet Fitness has several legal cases disclosed in its FDD. One ongoing class action, filed in February 2020 by Katherine Hayes and Jonathan Hayes, alleges unlawful terms in Planet Fitness's membership agreement, including a release of claims, violating the Massachusetts Consumer Protection Law, unjust enrichment, and negligent misrepresentation. The court partially denied Planet Fitness's summary judgment motion and granted declaratory judgment to the plaintiffs, finding the agreement void due to Massachusetts Health Club Act violations. A motion for class certification was heard in May 2024. Another case, Conway v. Planet Fitness Holdings, LLC, filed in May 2013, involved a former CFO alleging misrepresentations about her ownership interests during separation. A final judgment of $8,826,394.20 was entered in favor of Conway in June 2022. Planet Fitness International Franchise initiated a lawsuit in June 2020 against JEG-United, LLC to enforce an agreement for the sale of Mexican Planet Fitness locations. JEG-United counterclaimed, alleging breach of contract and tortious interference. This matter was settled before trial. Earlier cases include a 2017 arbitration demand from Scenic Investments Colorado Fitness, LLC, following the termination of their Area Development Agreement. Scenic alleged breach of contract and tortious interference, but the matter was settled before arbitration. In 2012 and 2013, two related lawsuits, known as the 'World Gym Litigation Matters,' were filed involving franchisees alleging misrepresentation, breach of contract, and encroachment. These cases were confidentially settled in November 2014. Additionally, a governmental action in 2013 by the New York Office of the Attorney General alleged deceptive advertising practices, specifically regarding 'free' or 'unlimited' tanning, and violations of state laws related to indoor tanning. This was settled in November 2015, with Planet Fitness agreeing to adjust its marketing materials and encourage franchisee compliance.
Bankruptcy History
Planet Fitness has no bankruptcy history to report.
Agreement Terms
Initial Term
12 years
Renewal Term
12 years
Renewal Conditions
To renew their franchise agreement, Planet Fitness franchisees must notify the franchisor between six to twelve months before their agreement expires. They must have substantially complied with their franchise agreement throughout its term and cure any identified deficiencies. Franchisees are required to remodel or expand their facility to meet current Planet Fitness standards, including installing new equipment and renovating signs, furnishings, and decor. A successor franchise fee of $20,000 is also required. Franchisees must sign the franchisor's then-current form of successor franchise agreement, which may have different terms, and establish their ability to maintain possession of the location for the new term or secure an approved substitute premises. They must also comply with current qualification and training requirements, sign a general legal release, and be current on all financial obligations to Planet Fitness, its affiliates, vendors, landlord, and lessor.
Training & Support Program
Franchisor Assistance
Planet Fitness provides franchisees with comprehensive support and assistance. Before a location opens, Planet Fitness instructs franchisees in its operating methods, assists with site selection and lease review, and provides specifications and layouts for the facility. It also offers initial training, lists of startup inventory, and approves pre-sale and grand opening marketing plans, in addition to loaning the confidential Operations Manual. Once open, ongoing assistance includes refresher training courses, general guidance on operating issues, and Internet and telephone consultations. Planet Fitness may also act as an approved source for products, merchandise, and equipment, and provides ongoing marketing programs, meetings, seminars, or conventions for franchisees. Furthermore, Planet Fitness conducts research and development on its operating methods. Additional guidance or special operational training for managers may be provided upon request, for which franchisees may be charged per diem fees and travel expenses.
Initial Training Hours
54
Training Location
Franchisor headquarters in New Hampshire and a PLANET FITNESS business selected by the franchisor
Ongoing Support
After opening, Planet Fitness franchisees receive various ongoing support services. This includes refresher training courses, general guidance on operating issues, and Internet and telephone consultation. Planet Fitness may also serve as an approved supplier for products, merchandise, and equipment, and provides ongoing marketing programs, meetings, seminars, or conventions for franchisees. Additionally, the franchisor conducts research and development related to its operating methods. Franchisees may request additional guidance or special operational training for their managers, for which they would be responsible for per diem fees and travel expenses.
Franchise Requirements
Ideal Candidate Profile
Planet Fitness seeks franchisees who are willing to make a full-time commitment to personally manage and operate their business. Ideal candidates must continuously exert their best efforts to promote and enhance the franchise, avoiding any other business activities that conflict with their obligations to operate Planet Fitness in compliance with the franchise agreement. They must also be prepared to ensure their business is managed by themselves, one of their owners, an Approved Operator, or a manager who has successfully completed the initial training program. While specific financial details are not framed as candidate characteristics, the FDD emphasizes the need for sufficient investment and effort.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
full-time
Territory Type
non-exclusive
Territory Size Requirements
Planet Fitness franchisees do not receive an exclusive territory for a single franchise location. The franchise agreement explicitly states that a franchisee receives a 'site only' franchise for a single Planet Fitness business, meaning no protected, territorial, or other rights beyond the physical premises of the approved location. While the franchisor may grant area development rights under an Area Development Agreement for a 'specified Development Area' where the franchisor and its affiliates commit not to develop or operate other Planet Fitness facilities (with specific exceptions), the document does not specify measurable criteria for how the size of these Development Areas is defined (e.g., by radius, population, or geographic boundaries).
Staffing Notes
Planet Fitness does not dictate or control labor or employment matters for its franchisees, as franchisees have sole authority over all employment decisions. However, Planet Fitness sets mandatory minimum staffing levels for the business, and all personnel must adhere to operational training standards and wear approved employee apparel. The franchisor also specifies sale procedures and customer service guidelines, all related to maintaining brand standards. Franchisees are responsible for ensuring their employees understand they are not Planet Fitness employees and must provide them with written acknowledgements of this independent employer status. While Planet Fitness offers advice on staffing, franchisees are ultimately responsible for hiring, firing, scheduling, compensation, supervision, and discipline of their personnel.