Planet Fitness Franchise Review (How Much Do Owners Make?)

Is owning a planet fitness franchise a good investment? How much can I make and where is the fitness industry going in general – today on Franchise City.
Opening a planet fitness will set you back between $969,600 and $3,181,500 keep in mind the low number is not realistic and was likely a location that needed minimal work to transform to a Planet Fitness likely an existing gym conversion. If you need financing be aware that in the agreement Planet Fitness does not allow franchisees to borrow more than 80% of the total investment without prior consent.
Those numbers assume you will be leasing your gym equipment, if you choose to purchase the equipment the investment range increases to between $1,616,600 to $4,242,500. Now Planet Fitness also offers an area developer opportunity – which is essentially purchasing multiple licenses which you can either award to other operators, or open yourself. Certain area developer licenses do not require you to open a store while others, such as planet fitness, do require at least one store to be operated by the franchisee. But area development or master franchising can be very lucrative in that you are sharing in the franchise fees and ongoing royalties and building an empire in your territory.
Your royalty fees will be 7% of the gross monthly and annual membership fees, your National ad fee is 2% of gross monthly dues, and you local ad fee is the Greater of $15,000 or 7% of the total gross quarterly dues. So you are already at 16 points. In addition their FDD includes a “special marketing program” which is a maximum of 9% total gross. So technically we could be as high as 25 cents on every dollar for royalties and marketing. There are a few minor additional fees we wont mention here, but there are some other substantial costs including your re-equip costs if your old equipment gets ratty which will range between $314,000- $922,000. Now right in the contract you are required to replace cardio equipment every 5 years, and non cardio equipment every 7 years. So don’t forget that number when you are forecasting. If you are wondering what happens if you don’t comply – right in the contract you give Planet Fitness the right to come in and change the equipment and send you the bill. Wonder if that has ever happened. Also – remodeling costs will range between $70,000 to $600,000 as required by Planet Fitness and in the contract it states that remodeling could be as frequently as every 5 years. Same thing if you don’t remodel they’ll come in and do it for you and send you the bill. And this is a reasonable thing you do get bad franchisees who nickel and dime in any sector, like the dirty fast food restaurant bathrooms with leaky taps, or broken toilets. It’s bad for business overall so I don’t blame them. Estimated insurance costs will set you back $10,000 to $20,000 per year.
Average annual gross EFT Revenue represented by median high and low. So the average gross EFT revenue – including both corporate and franchised stores – for bottom 1/3rd was about 1.1 million, middle third about 1.6 million and upper third about 2.3 million. Sounds like a lot but this is gross before your expenses. Some stores were also excluded and please see the actual FDD for details as there are a lot of footnotes and differences in corporate vs franchisee locations.
Remember to always compare several franchises before you make a decision everything is free at Franchise city including our expertise and custom reports, Please like and subscribe thank you for watching

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