Planet Fitness Franchises: $1.5M AUV (+ 2023 Costs & Profits)

With a hefty price tag of $3.3 million, Planet Fitness may be the 2nd largest fitness chain in the US but it’s also the less affordable for franchisees. Is this a profitable franchise?

We found the average Planet Fitness gym has an annual turnover of $1.6 million. In addition Planet Fitness is a very profitable franchise with a 29% EBITDA margin, quite impressive vs. other fitness chains.

What does it mean for you as the franchisee? Should you invest in a Planet Fitness gym?

In this article we’re looking at Planet Fitness and its Franchise Disclosure Document to find out whether you should invest in this business. Let’s dive in!

Key stats

Franchise fee$20,000
Royalty fee7.0%
Marketing fee9.0%
Investment (mid-point)$3,328,000
Average sales$1,699,000
Sales to investment ration.a.
Payback period*[franchise_value_investment_payback]
Minimum net worth$3,000,000
Minimum liquid capital$1,500,000
* assuming 15% net profit margin

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What is Planet Fitness?

Planet Fitness is an American operator of fitness centers headquartered in Hampton, New Hampshire.

The chain was founded in 1992 by Michael and Marc Grondahl, who later partnered with Chris Rondeau, the current CEO. Its first location was in Dover, New Hampshire.

It operates fitness training facilities offering exercise machines and free weights, fitness training services, and other related services.

Planet Fitness’ franchising journey began in 2003, and currently, the brand has more than 2,400 fitness clubs in all 50 US states, the District of Columbia, Canada, Puerto Rico, the Dominican Republic, and Australia.

Planet Fitness franchises pros and cons

Pros

  • Quality training: The brand offers its franchisees comprehensive classroom and hands-on training programs. It trains them on equipment operation and maintenance, cost control, inventory control, and the basic techniques of management needed to run a successful gym.
  • Marketing and advertising strategy: Planet Fitness employs an aggressive marketing strategy to create awareness and promote local fitness centers. Franchisees can leverage national, regional, and local advertising, digital marketing, and targeted promotional campaigns to reach a wider market segment.
  • Third-party financing: The franchisor offers its franchisees third-party financiers for start-up and ongoing costs.
  • Exclusive territory protection: The brand offers its franchisees exclusive territory protection. The franchisor does not grant any other franchises or operate related competitive units in the agreed-upon development area.
  • Real estate and construction: Planet Fitness provides franchisees with real estate assistance. It assists them in locating a suitable club location, negotiating a lease, and designing and building their clubs. 
  • Open membership advantage: Planet Fitness targets the majority of those not registered with franchise gyms or unsure of their fitness level. They also offer low membership fees, which set franchisees apart from the competition and improve income streams.
  • Management support: The brand’s top management helps its franchisees with valuable growth strategies to establish and build successful fitness centers. It also offers them ongoing support in form of safety procedures, meetings, newsletters, and a grand opening event.

Cons

  • No absentee ownership: The franchise does not present a passive ownership opportunity. Franchise owners must be actively involved in the decision-making and day-to-day operations of their businesses.
  • Not a part-time business opportunity. The franchise cannot be operated as a side business or as a part-time business. Franchisees must follow the franchisor’s operating hours.

How much does a Planet Fitness franchise cost?

On average, you may need to invest around $3,273,300 to open a Planet Fitness club. This amount is on the higher end compared to fitness franchises ($1.0 million).

Note that the investment amount mentioned is an average, indeed, it depends on factors like the club’s location, size, etc. According to the 2022 Franchise Disclosure Document, the required investment can be as low as $1,625,600 and as high as $4,921,000.

Startup costs

The initial investment covers all the essential startup costs needed to start a fitness club business. In addition to the initial franchise fee of 20,000, the investment also covers:

  • Formation Costs: site selection costs, training fee, real estate, leasehold improvements, fitness and non-fitness equipment, furniture, exterior signage, computer and POS system, permits, business licenses, professional fees, etc.
  • Initial Marketing: grand opening marketing & presales costs
  • Operating Costs:  insurance, lease deposit,  and working capital for first 6 months, etc.
Type of costLowHigh
Initial Franchise Fee$20,000$20,000
Formation Costs$1,369,600$4,184,000
Initial Marketing$40,000$60,000
Operating Costs$196,000$657,000
Total$1,625,600$4,921,000
Franchise Disclosure Document 2022

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How much turnover does a Planet Fitness generates?

On average, a Planet Fitness franchised gym makes $1,564,877 in turnover per year.

This number is the annual median sales of 1,953 franchised clubs operating in 2021. The top 33% of the total clubs had a median turnover of $2,099,000 whereas the bottom one-third made $1,050,000 instead.

How profitable is a Planet Fitness franchise?

On average, Planet Fitness clubs make $447,433 in profits per year. That represents a 28.5% profit margin (EBITDA margin).

We found this margin is higher than other fitness franchises. For example, Anytime Fitness has a EBITDA margin of 16.5% in comparison. This is mainly because of a lower labor cost (payroll/staff 20.3%) and rent cost (22.4%) which are by far the most important costs to consider for any fitness club. 

Profit and lossAmount% revenue
Revenue$1,568,147100.0%
Payroll/staff$318,61420.3%
Marketing$139,0008.9%
Royalties$112,0007.1%
Utilities$57,5003.7%
Supplies and maintenance$67,2004.3%
Other Opex$75,7004.8%
EBITDAR$798,13350.9%
Rent$350,70022.4%
EBITDA$447,43328.5%
Franchise Disclosure Document 2022

Should you invest in a Planet Fitness franchise?

If you’re considering investing in Planet Fitness as a franchisee, you would have likely faced the problem of the cost itself. Indeed, Planet Fitness is one of the most expensive fitness franchises we found.

As explained earlier, you would have to invest over 3 times as much on average (from investors or a bank) in comparison to the average $1 million investment required for the 12 most popular fitness brands (Anytime Fitness, Pure Barre, Club Pilates, etc.)

So is this really worth it? Are the profits worth investing $3 million upfront?

Well, the answer isn’t obvious unfortunately. We found that the payback period (as in the time it takes for a franchise profits to repay the initial investment) it 14 years for Planet Fitness, which is quite long.

In comparison, we consider a good payback period for gyms and fitness clubs around 9 years or lower, hence Planet Fitness franchise isn’t the most profitable franchise investment.

That being said, profits shouldn’t be the only thing to take into account when choosing a franchise. Instead factors like brand name, the franchisor’s support and training and competition are also very important to consider.

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How does it compare vs. other Fitness franchises?

FranchiseNet worth ($)Liquid capital ($)Investment ($)Revenue ($)Payback (years)
Anytime Fitnesshttps://sharpsheets.io/blog/anytime-fitness-franchises-costs-profits/350,000175,000510,165338,810$6810.0
Planet Fitnesshttps://sharpsheets.io/blog/planet-fitness-franchises-costs-profits/3,000,0001,500,0003,273,3001,564,877$8013.9
Orangetheory Fitnesshttps://sharpsheets.io/blog/orangetheory-fitness-franchises-costs-profits/1,000,000300,0001,381,432805,251$24411.4
Club Pilateshttps://sharpsheets.io/blog/club-pilates-franchises-costs-profits/500,000100,000287,000544,703$3633.5
Pure Barrehttps://sharpsheets.io/blog/pure-barre-franchises-costs-profits/500,000100,000335,812259,534$1738.6
Snap Fitnesshttps://sharpsheets.io/blog/snap-fitness-franchises-costs-profits/750,000250,000783,328194,124$3726.9
Burn Boot Camphttps://sharpsheets.io/blog/burn-boot-camp-franchises-costs-profits/300,000150,000314,846400,526$765.2
Crunch Fitnesshttps://sharpsheets.io/blog/crunch-fitness-franchises-costs-profits/2,000,000400,0003,092,0001,863,627$4811.1
CycleBarhttps://sharpsheets.io/blog/cyclebar-franchises-costs-profits/500,000100,000417,410335,855$1688.3
Stretch Zonehttps://sharpsheets.io/blog/stretch-zone-franchises-costs-profits/250,000150,000161,027357,632$2863.0
Workout Anytimehttps://sharpsheets.io/blog/workout-anytime-franchises-costs-profits/500,000175,0001,519,450511,628$4910.0
Fitness Togetherhttps://sharpsheets.io/blog/fitness-together-franchises-costs-profits/175,00080,000292,013400,000n.a.4.9
The Camp Transformation Centerhttps://sharpsheets.io/blog/camp-transformation-center-franchise-costs-profits/100,00075,000287,000495,067$993.9
Retro Fitnesshttps://sharpsheets.io/blog/retro-fitness-franchises-costs-profits/1,500,000300,0001,681,341998,459$667.0
F45 Traininghttps://sharpsheets.io/blog/f45-training-franchise-costs-profits/300,000100,000457,650632,902$2534.8
Gold's Gymhttps://sharpsheets.io/blog/golds-gym-franchise-costs-profits/1,000,000400,0004,043,8751,638,000$4716.5
Fit Body Boot Camphttps://sharpsheets.io/blog/fit-body-boot-camp-franchise-costs-profits/100,00065,000198,350167,364$617.9

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