Planet Fitness now has nearly 20 million members
The “judgment-free” gym chain already has over 2,500 gyms in America. Its executives think it can get to 5,000.
Gym owners must feel great in January, as a flood of wide-eyed, resolution-following new customers find their way into the front doors of their businesses all on their own.
Shareholders of America’s largest gym are no exception, with Planet Fitness reporting on Monday that its membership has swelled to 19.7 million members spread across 2,722 gyms, despite the company increasing the price of its hallmark $10 membership for the first time in 27 years earlier in May.
With massive memberships — the average Planet Fitness gym has more than 7,200 members — the company has come to dominate the “high volume, low price” model, adding millions of people who like the idea or option of working out more than they actually like working out. As our colleague Jack Raines wrote last year, “The most popular gym in the US doesn’t actually have enough gym space for all of its members to get fit.”
Twenty sets of relentless growth
The “judgment-free zone” chain operates on a franchise model, with ~90% of the company’s locations franchised as of 2023 and the rest run by Planet Fitness itself. The company makes set-up costs attractive for potential franchisees, but gradually increases royalties over time. Furthermore, Planet Fitness says that “our franchisees are contractually obligated to purchase fitness equipment from us” — which, no surprise, is nicely profitable for Planet Fitness: the company sold equipment worth $234 million in 2023, which it made a profit (EBITDA) of $56 million on.
With more than 2,500 locations in the United States already, you might not think there’s still room to grow in America, but Planet Fitness and its new leadership team are pushing for the burn, with goals to get the chain to 5,000 gyms in the US. That would be more than the number of Chipotle (~3,400) or KFC (~3,800) restaurants in the country. To entice new franchisees to reach that goal, in addition to raising the base membership price by 50%, Planet Fitness also eased the remodeling and royalties requirements.
