Have you ever wondered how Planet Fitness, the gym that promises to make workout experiences more comfortable and convenient for everyone, manages to make money? The business model behind Planet Fitness has proven to be incredibly successful and lucrative when it comes to monetizing its services in the fitness industry. This blog post will uncover what the Planet Fitness business model is and how they make money.
How does Planet Fitness work?
Planet Fitness is a gym chain that specializes in providing low-cost and no-contract memberships to its customers. Planet Fitness offers various membership options, including basic memberships and premium “Black Card” memberships.
The Black Card membership provides more perks than the standard membership. It includes unlimited guest privileges along with access to all of the same equipment as a basic member. In addition, it also includes free tanning, a free hydromassage, and access to discounts on personal training and massage chairs.
Planet Fitness is unique in that it offers an online “Virtual Trainer” service for members who need help with their workouts. The Virtual Trainer provides detailed instructions for each exercise as well as interactive video demonstrations.
In addition to its membership options, Planet Fitness also offers group fitness classes such as Zumba, yoga, and Pilates. These classes are included with the Black Card membership but can also be purchased separately by basic members at an additional cost.
Overall, Planet Fitness is an ideal option for anyone looking for a no-contract gym membership at an affordable price. With its low monthly fees and wide range of amenities, it’s no wonder why Planet Fitness is a popular choice among gym-goers.
Here are the 9 ways how Planet Fitness makes money
Franchise Royalty Fees
One of the ways Planet Fitness makes money is through franchise royalty fees. This fee is paid by each franchise owner to the company to operate a Planet Fitness location. The amount of this fee varies, but it typically includes an initial fee as well as ongoing payments over time. In exchange for these payments, the franchisee receives support from Planet Fitness, such as marketing and training materials, access to equipment discounts, and more.
Membership Fees
The primary source of revenue for Planet Fitness comes from its membership fees. These fees vary depending on where you join and what type of membership you purchase. For instance, those who join a basic membership plan will pay a monthly fee for access to all of their gyms and other amenities. Additionally, some members may opt to purchase add-ons such as personal training or additional spa services at an extra cost.
Merchandise Sales
In addition to the membership fees, Planet Fitness also makes money through the sale of merchandise. This includes items like t-shirts, water bottles, hats, and other fitness apparel and accessories that are available for purchase at their gyms or online.
Selling Equipment to Franchisees
Planet Fitness also makes money by selling equipment to its franchisees. This includes the gym’s signature teardrop-shaped benches, treadmills, ellipticals, and other machines used in their gyms. The company offers discounts on these products to its franchise owners, helping them save money while still having access to quality equipment.
Personal Training Services
Planet Fitness offers personal training services as an additional source of revenue. Personal trainers provide one-on-one guidance and instruction tailored to each individual’s goals and needs. Trainers develop workout plans that incorporate a variety of exercises designed to help members reach their fitness goals faster.
Group Fitness Classes
Planet also offers a variety of group fitness classes to its members. These classes are by certified instructors, who provide exciting workout experiences for both advanced gym-goers alike. Some of the popular classes offered by Planet Fitness include cycle classes, IT workouts, and yoga sessions. These group fitness not only help drive more revenue for the company but also provide a sense of community within each location.
National Advertising Fund (NAF) Revenue
Planet Fitness also earns revenue through its National Advertising Fund (NAF). This fund is made up of contributions from each franchise owner and helps to pay for national marketing campaigns. These campaigns are used to promote the brand as a whole and help raise awareness about what makes Planet Fitness unique. The money earned from this fund can then be used to develop additional marketing strategies or invest in other areas of the business.
Placement Services
Planet Fitness earns money through its placement services. This includes job postings and recruitment assistance for those interested in working at one of their locations. The company also offers consulting services to help franchise owners with the operational side of running a gym, such as financial management and customer service training. All of these services help ensure that each location is staffed properly and ready to serve customers.
Vendor Commissions
Planet Fitness also makes money through vendor commissions. This includes payments from vendors that the company has partnered with to provide its members with additional services or products. For example, the company partners with health insurance companies to offer discounted rates on their plans and rewards programs for those who choose to join a Planet Fitness gym [1].
Planet Fitness’ profit and revenue
Planet Fitness has seen steady growth in its profits and revenue over the past five years. In 2021, it reported a net income of $266 million, up from $155 million in 2017. Its total revenue climbed to $2.14 billion during the same period, a 25% increase from the prior year. This impressive performance was driven by an increase in franchise fees and royalty income as well as an expansion of digital memberships. Planet Fitness’ successful marketing initiatives have helped them to acquire more members and drive greater revenues. The company also continues to expand into new markets both domestically and internationally, which is expected to further boost its financials going forward.
The fitness chain has also made several strategic investments to improve its technology and customer experience. It has invested in artificial intelligence and other cutting-edge technology to improve the quality of experience for its members. Furthermore, it has been utilizing data analytics to improve marketing efforts, which is helping the company to reach a wider audience and acquire more customers.
Overall, Planet Fitness’s aggressive expansion plans and investments in technology have contributed to its impressive growth in profits and revenues over the past few years. The company looks set to continue this trend in the future as it continues to innovate and expand further into new markets. With its global presence, competitive pricing models, and innovative technologies, Planet Fitness is well-positioned to remain a leader in the fitness industry going forward [2].
Planet Fitness’ funding and market cap
Planet Fitness’s initial public offering occurred in August 2015, when the company raised $216 million. As of 2021, Planet Fitness had a market capitalization of approximately $3 billion. The company has continued to grow since its IPO and was ranked as one of the largest U.S.-based fitness chains in 2020 with 1,712 franchise stores globally.
Planet Fitness Inc is also known for its focus on creating a comfortable and non-intimidating gym environment and has been widely lauded for its initiatives in creating a “judgment-free” atmosphere. The company emphasizes that anyone is welcome at their gyms, regardless of their fitness level or body type. Planet Fitness also offers numerous amenities such as unlimited tanning, massage chairs, hydro-massage beds, and Total Body Enhancement booths to help members get the most out of their gym experience.
Overall, Planet Fitness continues to be an industry leader in providing affordable, judgment-free access to quality gyms and equipment all over the world. The company has experienced impressive growth since its IPO and has continued to make strategic investments to support future expansion plans. With its successful business model and commitment to providing a comfortable atmosphere for everyone who visits, Planet Fitness is well-positioned to continue to expand its reach and increase its market cap in the years to come.
How to begin a Planet Fitness business?
To begin a Planet Fitness business, you will need to obtain the necessary permits and licenses from your local government. You may also need to obtain zoning approval if you plan on renting or leasing space for your gym. Once the legalities are taken care of, it is time to start finding the right location and equipment for your gym.
Once a location has been chosen, you must rent or purchase equipment that meets Planet Fitness standards. These include free weights, treadmills, ellipticals, bikes, and more. You will also need to create an inviting atmosphere with proper lighting, music, and other amenities that customers can enjoy while they exercise.
The next step is hiring qualified staff members who know about running fitness programs such as personal trainers, group classes, and nutritionists. You will also need to develop a pricing structure for memberships that are competitive and attractive to potential customers. Finally, it is important to promote and advertise your new gym so that people in the area know about it. By following these steps, you can start your own Planet Fitness business with success!
FAQ
Is Planet Fitness making a profit?
Yes, Planet Fitness is making a profit. In 2020, the company reported a net income of $228.9 million, up from $189.4 million in 2019. The company also reported total revenue of 2.31 billion for 2020, up from 2.15 billion in 2019, representing an 8% increase year-over-year. Planet Fitness has seen steady growth since going public in 2015 and continues to be a profitable company.
Does Planet Fitness have free weights?
Yes, all Planet Fitness locations offer free weights, including barbells and dumbbells that range from 5lbs to 80lbs — depending on the location — as well as other equipment like benches and racks for strength training exercises. Many clubs also feature cardio equipment and strength-training machines.
What is Planet Fitness’ refund policy?
Planet Fitness has a strict no-refunds policy. If you are canceling your membership for any reason, all payments already made will not be refunded. However, if you need to put your membership on hold due to medical reasons or military service, you may request an exception from the company’s Customer Service team.
Does Planet Fitness offer group classes?
Yes, many locations offer group fitness classes taught by certified instructors. These classes range from yoga and Pilates to kickboxing and cycling — depending on the club location. You can check with your local club for the availability of classes and pricing information.
What is the profit margin for Planet Fitness?
Planet Fitness has a profit margin of 7.7%, which is slightly higher than the industry average of 6.1%. The company’s strong financial performance and focused strategic initiatives have enabled it to consistently achieve high margins despite rising expenses and competition in the fitness industry.
Does Planet Fitness offer childcare?
No, Planet Fitness does not currently offer childcare services at any of its locations. However, some clubs partner with local businesses to provide childcare services on-site. You can check with your local club for more information about what services they may be offering.
Does Planet Fitness provide access to nutritionists or personal trainers?
Yes, many locations offer access to certified nutritionists and personal trainers who can help you create a customized fitness plan and nutritional program. These services are usually provided on an hourly basis and the fees vary depending on the club’s location. You can check with your local club for more information about what services they may be offering.
What is Planet Fitness’ corporate mission?
Planet Fitness’ corporate mission is to create a unique environment in which anyone–from the uninitiated to the everyday gym user–can feel comfortable. The company strives to provide a high-quality space where people of all shapes, sizes, ages, genders, and backgrounds can exercise without judgment or intimidation. Along with its mission statement, Planet Fitness also works towards this goal through initiatives like its Judgement Free Zone policy, which has become synonymous with the brand’s core values.
What is Planet Fitness’ Judgement Free Zone policy?
Planet Fitness’ Judgement Free Zone policy is a commitment to creating an inclusive environment where members of all fitness levels can feel comfortable and safe while exercising. The company works to ensure that everyone in their clubs is treated with respect and dignity, regardless of shape, size, or gender. This includes no-judgmental attitudes from staff as well as a ban on cliques and gossiping amongst members. Additionally, Planet Fitness also enforces strict rules against unhealthy language and behavior such as thong bikinis or disruptive conversations during workouts.
Does Planet Fitness offer any discounts?
Yes, Planet Fitness offers several discounts for its members including student discounts, military discounts, and corporate discounts. Additionally, the company also offers a variety of promotional deals throughout the year. You can check with your local club for more information about what discounts they may be offering.
What is Planet Fitness’ membership cancellation policy?
Planet Fitness has a 30-day grace period for membership cancellations. During this time, you can cancel your membership without any fees or penalties as long as you provide written notice to the Customer Service team at least 30 days before the end of your current billing cycle. After that grace period ends, members will be charged full price for any remaining months on their contract.
Does Planet Fitness offer virtual classes?
Yes, many locations offer access to virtual classes which are streamed live from planetfitness.com. These classes are led by certified trainers and cover a variety of topics including yoga, strength training, cardio, and more. You can check with your local club for more information about what classes they may be offering.
Does Planet Fitness offer any nutrition advice?
Yes, many locations offer access to registered dietitians who can provide personalized nutrition advice tailored to your needs. Additionally, the company also offers a variety of online resources on its website which include healthy recipes as well as tips and facts on nutrition and fitness. You can check with your local club for more information about what services they may be offering.
How is Planet Fitness successful?
Planet Fitness is successful due to its commitment to creating an inclusive and judgment-free environment for everyone. The company strives to provide a high-quality space where people of all shapes, sizes, ages, genders, and backgrounds can exercise without judgment or intimidation. Additionally, the company also focuses on providing low prices and convenient locations which make it accessible to more people. Lastly, Planet Fitness has invested heavily in technology such as its online streaming classes which have helped increase the reach of its services. All these factors have contributed to the success of Planet Fitness.
What makes Planet Fitness different from other gyms?
Planet Fitness differentiates itself from other gyms by its commitment to creating an inclusive environment. The company has a strict no-judgment policy that encourages members of all ages, shapes, sizes, and backgrounds to feel comfortable and safe while exercising. Additionally, Planet Fitness also offers low prices and convenient locations which make it accessible to more people than other gyms. Lastly, the company has invested heavily in technology such as its online streaming classes which have helped increase the reach of its services. All these factors combined have made Planet Fitness stand out from the competition.
Why is Planet Fitness taking so much money?
Planet Fitness is taking money from its members to cover the costs of running and maintaining the gym. This includes paying for utilities, equipment, staff, and other necessary items. Additionally, the company also uses some of the funds to invest in technology such as its online streaming classes which helps increase the reach of its services. All these factors contribute to why Planet Fitness takes money from members.
Is Planet Fitness in debt?
Planet Fitness is not in debt. The company has been profitable for many years and continues to invest in its services. Additionally, the company recently went public which helped it secure more capital for future growth and expansion. All these factors have kept Planet Fitness out of debt.
What happens if I never pay Planet Fitness?
If you fail to pay your membership fees, Planet Fitness will contact you to remind you of your payment obligation. If payment is still not made after several attempts, Planet Fitness may cancel your membership and pursue legal action if necessary. Therefore, members must stay up-to-date with their payments to avoid any negative consequences.
Is it hard to quit Planet Fitness?
No, it is not hard to quit Planet Fitness. If you wish to end your membership, all you have to do is notify the gym of your decision either in person or via email. Then, depending on the payment method you used when signing up for the membership, you may be eligible for a refund if applicable. Therefore, quitting Planet Fitness is relatively simple.
How much is the Planet Fitness franchise fee?
The franchise fee for Planet Fitness varies depending on the location and size of the gym. Generally, however, it is estimated that a franchisee must pay around $30,000 to purchase a license as well as an additional investment of up to $500,000 to cover startup costs such as rent and equipment. Additionally, there may be other fees associated with opening a Planet Fitness franchise which is subject to change.
Useful Video: How Does Planet Fitness Make Money?
Conclusion
How does planet fitness make money? The answer is simple. Planet Fitness makes money by charging membership fees, selling merchandise, and through additional services such as personal training. By creating a comfortable atmosphere and offering packages that cater to different fitness goals, Planet Fitness has successfully created a business model that its customers are satisfied with and can rely on for their health and wellness needs. Ultimately, Planet Fitness’s success comes down to its ability to deliver what it promises: an affordable gym experience where everyone feels welcome.
References:
- https://thestrategystory.com/2022/09/29/how-does-planet-fitness-work-and-make-money-business-model/
- https://finance.yahoo.com/news/planet-fitness-full-2022-earnings-104159018.html