Planet Fitness

History of the company

Planet Fitness started its business in Dover, New Hampshire when Michael and Marc Grondah bought a failing Gold’s gym in 1992. Originally, the company operated like most other gyms but in the coming years, they decided to shift its focus from the usual gym goers–powerlifters and fitness enthusiasts–to the general populace who casually or occasionally use the gym.

In 2002, the founders renamed their gym to Planet Fitness, and in 2003, they launched their first franchise. Now, Planet Fitness is one of the largest gym franchises in the US with 19.7 million members. Almost 90% of Planet Fitness outlets are owned and operated by independent retailers and the franchise chain has been ranked as one of the best in magazines such as Newsweek, Entrepreneur, and Forbes.

Is Planet Fitness a franchise?

Yes, Planet Fitness is a franchise chain with over 2,600 locations in all 50 states. They are currently focusing on international expansions and are open to applications from candidates who have the relevant experience and capital.

Is a Planet Fitness franchise right for you?

While Planet Fitness’s high-profit margins and unique business model in the fitness training industry can be appealing to investors looking to add a gym franchise to their portfolio, it requires a hefty investment as well as a large amount of liquid capital to get started.

Investing in a Planet Fitness franchise is a big decision and there’s a lot of factors including cost, market and franchisor support that must be taken into consideration. To help you out, we have outlined the pros and cons of owning a Planet Fitness franchise below.

Pros and cons of owning a Planet Fitness franchise

Pros

• Planet Fitness has strong brand recognition and outranks all competitors in terms of brand awareness.
• Planet Fitness provides comprehensive training to its franchisors including pre-opening initial training and ongoing assistance.
• Planet Fitness’ product offering is differentiated from most traditional gyms as they target the casual gym user.
• An average Planet Fitness gym has a good amount of annual revenue compared to the industry average.

Cons

• You will not receive an exclusive territory for a single franchise unless you sign an Area Development Agreement (ADA) to develop multiple training facilities in a designated geographical area.
• Planet Fitness requires a significant initial investment and a large amount of liquid capital.
• The fitness industry is highly competitive, so it can be a struggle to stand out in a crowded market.
• Planet Fitness requires you to sign a nondisclosure agreement before they engage in negotiations with you. 

Planet Fitness franchisee minimum requirements

Planet Fitness is not offering candidates the opportunity to open franchises in the US at the moment. However, for candidates interested in partnering with them for international expansions or preparing for future US franchising opportunities, here’s a breakdown of Planet Fitness’s requirements for prospective franchisees.

Nonfinancial requirements

• Residency and knowledge of the region requested for franchising
• Previous or current ownership of chains of brick-and-mortar customer-facing stores
• Prior experience in franchise construction and real estate.

Financial requirements

• Minimum $33m of liquid assets in non-borrowed funds (inclusive of all partners)
• Enough capital to cover the significant upfront costs

Once you’ve understood the minimum requirements to franchise with Planet Fitness, let's take a look at the franchisee obligations and restrictions.

Franchisee obligations and restrictions

Planet Fitness has various different obligations and restrictions for its franchisees, including ownership and management requirements, management obligations and product offerings. While it's important to take a close look at your obligations before signing the agreement, some may need more attention than others. We’ve listed some of the key obligations below.

If franchisees are a company or decide to become a company or any other legal entity, they must appoint a “responsible owner” who fulfills the following criteria.

• Has an ownership interest in the franchise
• Has the authority to accept all official notices and sign legally binding documents
• Has completed the franchisor’s training program

The franchisees or the responsible owner are liable to personally manage their Planet Fitness gyms as their primary occupation unless the franchisor approves a different operator in writing.

Franchisees must only offer the products approved by the franchisor and they must offer all the products required by the franchisor.

Franchisees must conduct all pre-opening activities as instructed by the franchisor including site development, pre-opening purchases, and training.

The full list of obligations and restrictions can be found in the Franchise Disclosure Document, 2024.

While it is important to understand the material obligations that come with owning a Planet Fitness facility, financial commitments also need to be considered with equal weight. From initial investments to ongoing expenses, understanding the costs is key to making an informed decision. Let’s take a look at the costs associated with buying and running a Planet Fitness franchise.

How much does a Planet Fitness franchise cost?

The total costs of setting up a Planet Fitness gym can range from $1,504,600 to $5,158,500. In addition to the start-up costs, several ongoing and other costs come into play as gyms have significant operational and maintenance costs.

Understanding the breakdown of the costs of starting a Planet Fitness can help you better manage your finances. We’ve categorized the costs into three categories; start-up costs, ongoing costs, and additional costs.

Planet Fitness Start-up costs

Planet Fitness has significant start-up costs. Here’s an estimate of the initial costs for starting a Planet Fitness, extracted from Item 7 of the Franchise Disclosure Document (FDD). 

Ongoing costs

Your ongoing costs with Planet Fitness will be paid on a previously agreed-upon schedule. Here are some ongoing costs you might face:

• Royalty fees - 7% of the total gross monthly and annual membership fees payable to you via EFT Dues Draft
• Join Fee - 20% of the regular monthly membership fee or 5% of the total price of a prepaid membership.
• Third-party payments
• Insurance
• National Advertising Fund Fee - Annually, 2% of the EFT Dues Draft.
• Local Advertising Funds - Greater of $60,000 or 7% of total gross monthly membership fees payable via EFT in a year.
• Advertising Cooperative Fees.
• Special Marketing Programs - Up to 7% of Monthly EFT for a single month.
• Cure Period Extension Fee (Franchise Agreement) - Up to 4% of the total gross monthly and annual membership fees payable via EFT.
• Software licensing - $100 per year

Source: Planet Fitness, Franchise Disclosure Document, 2024

Additional fees

Lastly, Planet Fitness might charge you extra fees depending on your specific situation, as detailed in the franchise agreement. These fees could include:

• Interest - 10% (annualized) or. the highest contract rate of interest permitted by law, whichever is lower.
• Refresher Training Workshops - $500 to $1,500.
• Per Diem Fee $100 to $1,000
• Re-Equip Costs - $425,000 to $1,059,000.
• Remodel Costs $250,000 to $1,200,000
• Fees to Evaluate and Approve Alternative Suppliers - Franchisor’s costs and expenses
• Pre-Sale/Grand Opening Marketing Expense - up to $120,000.
• Auditing and Inspection Costs Actual costs
• Franchise Agreement Transfer Fee - $10,000, plus out of pocket expenses. Securities Offering Fee - Up to $100,000, plus any out of pocket expenses.
• Area Development Agreement Transfer Fee - $5,000 per location to be developed
• Construction Development Plan Review Fee - $4,000, Upon the submission of Construction Development Plans for approval.
• Site Evaluation Fees
• Successor Franchise Fee - $20,000
• Indemnification
• Administrative third-party costs
• Costs and Attorney’s Fees Actual costs
• Debrand Deficiency Fee - Currently, $35,000 for one or more pieces of strength or amenity equipment plus $35,000 for one or more pieces of cardio equipment.

Source: Planet Fitness Franchise Disclosure Document, 2024

Planet Fitness requires a large upfront investment and some significant recurring fees, creating a high financial barrier to entry. With this in mind, understanding the split of costs as well as their scheduled payments can help you plan your finances better.

Once you have a good handle on the costs related to owning a Planet Fitness franchise, it's time to take at the revenue. Potential earnings are an important consideration in deciding whether the investment aligns with your goals. Let’s take a closer look at what franchisees can expect to earn by owning a Planet Fitness franchise.

What is the Planet Fitness owner’s salary?

Planet Fitness, in item 19 of its FDD, clearly informs you of the average earning potential of its franchise outlets. Planet Fitness has used Electronic Fund Transfer (EFT) revenue, which is the recurring membership fees of its members, to calculate the average annual revenue of the gyms.

Gyms are categorized into three groups based on their average annual revenue (Bottom Third, Middle Third, and Upper Third) to provide a clear picture of training facilities with differing levels of performance.

The table below illustrates the 2023 EFT revenue for Planet Fitness’s franchised clubs. 

Source: Planet Fitness Franchise Disclosure Document, 2024

However, keep in mind that revenue figures and profit figures can vary significantly due to the high ongoing costs related to running a Planet Fitness gym. After deducting the franchise fees and other operating expenses, the franchisee can expect to take home around $215,000 - $270, 000 in profit per franchise.

Now that we’ve covered the finances involved in running a Planet Fitness franchise, the next step is to learn about the process of becoming a franchisee.

How does the Planet Fitness franchise process work?

Once you’ve determined that Planet Fitness is the right franchise for you, here’s how you can kickstart the process of partnering with them.

1. Expression of Interest through initial inquiry

The first step is to reach out to Planet Fitness with an initial inquiry and express your interest in owning a franchise outlet via their online form. At the moment, the form is open for prospective candidates interested in partnering with Planet Fitness for their international expansions.

2. Fill out your application

Once your initial inquiry is processed, Planet Fitness may ask you to fill out an application. Here, Planet Fitness expects you to prove you have the required net worth and liquid capital to support the franchise outlet. Once they conduct the background checks and determine your fit, they will get back to you with the results.

3. Visit premises on Discovery Day

If Planet Fitness approves your application, they’ll invite you to an open day at their headquarters. This gives you the chance to meet their management team and experience Planet Fitness’s operations and values up close.

4. Sign the development agreement and franchise agreement

If Planet Fitness approves your application, they will offer you the opportunity to become a franchisee. Planet Fitness will share the franchise agreement and a Franchise Disclosure Document (FDD) with you. The agreement would form the basis of your relationship with Planet Fitness, and the FDD the terms and conditions of joining the franchise. Understanding all the terms of the agreement can help you make the right decision and we recommend that you seek a franchise attorney to help you with this step of the process. The franchise fee is due after you sign the agreement.

Depending on your application, they may offer you an Area Development Agreement (ADA) for a particular region. An ADA permits you to develop up to 10 Planet Fitness stores in a particular area. For each store you develop, you will sign a separate franchise agreement with Planet Fitness.

We recommend paying close attention to all items in your FDD, ADA, and franchise agreement, but some sections may require more review than others. Some of the elements to keep in mind when reviewing Planet Fitness’s documents are:

• Financial assistance: Planet Fitness does not provide any kind of financing to the franchisee, directly or indirectly. They will not guarantee your leases, notes, or obligations.
• Territory: Planet franchise does not provide an exclusive territory unless you sign an ADA. Even with an ADA, Planet Franchise retains the right to establish carve outs in places like airports and malls in your area. For those who sign individual franchise agreements, there is no exclusive territory provided and franchisees are bound to conduct business only in the area approved by the franchisor.
• Term: The initial franchise term is 12 years which may be extended up to one more year if the franchisor grants written approval. Once the term is complete, the franchisor may offer a successor franchise agreement on their discretion.

A note on the Franchise Disclosure Document (FDD)

An FDD is a legal document with key information about the specific franchise, giving you a starting point for in-depth research. It has 23 items in it and, as with any franchise, this should be your starting point of research. Check out our Ultimate Franchising Guide to learn more about FDDs.

5. Site preparation and build-out

The Planet Fitness team will assist you in selecting a suitable site for your outlet and negotiating the lease. Planet Fitness will provide you with the guidelines for constructing the premises to ensure the building meets their criteria. The franchisee is responsible for all aspects of the construction process and you must comply with all state and federal laws regarding the process.

6. Attend the training program

All the franchisees and managers who have not previously undergone the initial training program are required by the franchisor to successfully complete the program. The program, which consists of both classroom and hands-on learning, covers various facets of running a Planet Fitness gym including facility operations, cost control, inventory control, and management. The training is offered in two phases:

• Owner orientation
• Pre-sale and operations training

Owners are expected to complete the training program within 90 days of signing the franchise agreement and if they don’t complete it to the franchisor’s satisfaction, Planet Fitness has the right to terminate the agreement.

Planet Fitness will not charge you and two other individuals for their initial training but all your team’s expenses during the training period must be borne by you. The training program may be conducted in the headquarters in Hampton, New Hampshire or any other company-owned Planet Fitness facility. Typically, the training takes place once a month or so but depending on the franchisor’s needs, this can be more or less frequent.

The franchisor may require your team to attend additional training whenever necessary, though the refresher training is likely to be limited to two training sessions and five calendar days a year. For Point of Sale training, the Planet Fitness vendor will visit you onsite and instruct your staff on the use of the system. The POS vendor charges $800 per day per person for the training.

7. Grand opening

Once the training and construction are complete, you can open your Planet Fitness location with a grand opening.

While Planet Fitness is a profitable business opportunity for investors looking to add a fitness franchise to their portfolio, the high demand and significant financial requirements can be a barrier. If you are looking for a more affordable gym franchise, some other brands may appeal to you.

What are some alternatives to Planet Fitness?

If Planet Fitness doesn’t fit the bill for your requirements for a gym franchise, some other brands can be a good fit.

Anytime Fitness

Priding itself on its 24/7 convenience, Anytime Fitness is a global franchise of gyms with state-of-the-art equipment, certified trainers, and a supportive community catering to all levels of fitness enthusiasts. The initial investment ranges from $98,430 - $523,824 and the franchisor charges a royalty fee of 6% on sales.

Crunch Fitness

With various fitness training options and classes available, the Crunch Fitness franchise focuses on making exercising an enjoyable activity for all gym goers. The initial investment range for a Crunch Fitness franchise is $304,500 - $2,129,500 with a royalty charge of 6% on sales.

World Gym

One of the industry leaders in fitness, World Gym has been in business for decades, accumulating strong brand recognition and customer loyalty. Initial investments for a World Gym franchise can range from $767,500 - $3,273,000 with a royalty rate of 8% on sales.

Fitness is a highly competitive industry and having an established brand like Planet Fitness as your partner can give you an advantage and position you for long term success. Considering the cost, profitability, and the market before making your final decision can help you find the right franchise for your future goals.

If you are not sure about your options, take our franchise quiz to match with your ideal franchise. Good luck!

FAQ

What is the Planet Fitness franchise owner's salary?

Planet Fitness franchise owners typically earn around $215,000 - $270, 000 annually, but earnings can vary widely depending on location, operational costs, and membership numbers.

How much does it cost to get a Planet Fitness franchise?

The estimated initial investment to open a Planet Fitness franchise ranges from $1,504,600 to $5,158,500, including equipment, leasehold improvements, and working capital.

What is the franchise fee for Planet Fitness?

The initial franchise fee for a Planet Fitness location is $20,000.

Who owns the Planet Fitness franchise?

Planet Fitness is a publicly traded company, but many individual locations are owned and operated by franchisees. 

Visit Us

https://www.planetfitness.com/franchising/become-a-franchisee

Connect With Us