Planet Fitness Continues to Target Non-Gym Goers, Rely on Existing Franchisees

Data suggests an increasing number of Planet Fitness clubs are run by veteran operators with experience in multiple markets. Company CEO Chris Rondeau intends to rely on these franchise groups to grow the company's footprint.

Planet Fitness CEO Chris Rondeau re-emphasized the company’s focus on targeting non-gym goers, as well as relying on the growth of existing franchisees, during a recent Bloomberg interview.     

Ninety percent of new Planet Fitness clubs are opened by existing franchisees, Rondeau told host Vonnie Quinn during the Dec. 29 broadcast. This suggests an increasing number of Planet Fitness clubs are run by veteran operators with experience in multiple markets.

“They're opening their 10th or 25th unit for example,” Rondeau said of franchisees. “So they’re a very strong franchise base, a very good operator, that continues to drive our momentum.”

One such franchise group is United PF Partners. When the group formally organized in November, it became the largest Planet Fitness franchise organization, spanning 59 clubs in nine states.

In a 2016 survey of nearly 1 million Planet Fitness members, the company discovered that more than 40 percent of its members had never previously belonged to a health club. That statisic has helped investors to better understand Planet Fitness’ mission of “catering to 80 percent of the population that doesn’t have a health club membership,” he said.

“We really feel the rest of the industry is focused on the fit getting fitter, honestly, so we're really trying to get people off the couch, getting them healthy for the first time,” he said.

Planet Fitness will open approximately 200 new clubs in 2017, Rondeau said, but will not target any specific geographic area. He did highlight the company’s 2015 expansion into Canada.

An aggressive unit growth strategy is a key to driving value back to company shareholders, Rondeau said, as many Planet Fitness members only pay $10 per month.

When Quinn asked about how the company retains members, Rondeau cited cleanliness and a fun, low-pressure atmosphere as reasons his clubs succeed.

Rondeau is becoming a staple on news networks such as Bloomberg and CNBC, and with good reason. Planet Fitness—now publicly traded—reported third quarter revenue of $87 million, a 26.4 percent increase from the same period last year, with its same-store sales jumping 10 percent.

The company announced in November it would move its headquarters from Newington, New Hampshire, to Hampton, New Hampshire, sometime this spring.

Planet Fitness ranked seventh on Club Industry's 2016 Top 100 Health Clubs list, with a 2015 reported revenue of $330.5 million. This was an 18 percent uptick from 2014. The company has more than 8.6 million members across 1,200 locations in 47 states, the District of Columbia, Puerto Rico, the Dominican Republic and Canada. 

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