Planet Fitness has been around since 2003 when it opened its first branch in Florida. Since then, it’s been a leader in the fitness industry as a more accessible option compared to others.
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That said, the original owner of Planet Fitness actually sold its namesake in 2002 to Chris Rondeau and Michael & Marc Grondahl.
While the idea of a “friendly” gym with a “Judgment-Free Zone” may have seemed like a good idea at the time, many disagree wildly. When looking at the state of fitness culture today, it’s hard to see how Planet Fitness would still be in business.
According to Ibisworld, there were 112,676 gym, health, and fitness clubs in the USA in 2022 — an increase of 2.7% since 2021. They also forecast that this number will continue to grow.
But can the same be said for Planet Fitness? Has the PC culture of 2022 created an environment for a soft-spoken gym to succeed? Or is the fitness environment just too aggressive?
Let’s look at the numbers.
Is Planet Fitness Financially Still Successful?
Currently, Planet Fitness has two membership options — $10 for the basics (weights, cardio, etc.) and a $25 “Black Card” option, giving you some extra goodies like Bring a Friend.
In January 2018, Planet Fitness reported having more than 1,500 centers open across all 50 states, including Hawaii.
Sounds pretty successful, right?
- In the year 2021, Planet Fitness reported earnings upwards of $587 million. This is a massive increase from the previous year’s $406.6 million. Sure, this is most likely due to COVID and the effects a worldwide pandemic had on the economy, but this is still far from the 2019 result of $688.8 million. It appears that even though the company is growing acutely, looking at a wider time period, it seems to be losing money.
- Even when you consider the fact that the company did lose out on revenue, the membership number still increased. The number of memberships in January 2022 stood at 15.6 million, whereas in 2021, it only had 15.2 million members. Another statistic that may seem surprising is that PF increased the number of outlets by 100 – 200 each year.
As you can see, it appears that Planet Fitness is growing in popularity, but the chain still seems to be losing out on revenue. There could be multiple reasons for this, so it’s hard to speculate.
That said, for now, there are more members each week. There are also more PF gyms for you to choose from than ever before.
Planet Fitness vs. Other Gyms
Firstly, when looking at how Planet Fitness stocks have been doing, they’ve been doing amazingly. Compared to the S&P 500, they’ve been twice as successful (NYSE: PLNT).
This is one of the reasons franchisees are so eager to invest. In fact, one franchisee owns 133 PF outlets.
- Firstly, Planet Fitness is vastly cheaper than its competitors. When compared to some of the big hitters in the USA today, it’s half as expensive as Crunch, less than one-third of the price of LA Fitness, and around 30% of Lifetime’s cost. That said, LA Fitness reported revenue of $2.15 billion in the year 2019.
- By the end of 2019, there were a reported 73.6 million people going to the gym on a regular basis in the States — or around 1 in 4 people. With 15 million members, this means 20% of American gym-goers make use of Planet Fitness (some may use more than one gym). When looking at the money they make, it’s clear that Planet Fitness seems to be selling itself short, as it doesn’t possess 20% of the market share when looking at revenue.
While being more affordable than other gyms seems to be their key selling point, it also seems to be hindering their progress. Most of their revenue comes from franchise fees, and there’s definitely a problem brewing in the future.
But will people still consider Planet Fitness if it weren’t 10 bucks per month?
Is Planet Fitness In Debt?
While debt can be good for certain individuals who are savvy with funds, the same can’t be said for companies. Debt can lead to massive problems if left unattended, and the COVID crisis showed us all just how volatile the fitness network can be when met with a governing body.
- While somewhat worrisome, PF’s cash on hand dropped by 20% from 2021 to September 2022. This was probably used to purchase land or equipment to recover from COVID. They spent around $140 million on something. Their total liabilities also increased by 18% in the same time frame, from $2.659 billion to $3.094 billion.
- Long-term debt is something that seems to be hindering Planet Fitness a lot. When looking at the years 2018 through 2019, there was an increase of 45%, ending at $1.688 billion. Fast forward to 2022, and that number now stands at $1.982 billion. So even though the company did see economic growth in the year 2022, it doesn’t appear to be going well in the financial department.
As you can see, the numbers are all over the place. Planet Fitness wants to make it seem like the business is doing great, bragging about franchisees being successful, etc.
But the numbers don’t lie. They don’t appear to be making a ton of money, at least not from clients. Planet Fitness is deeply in debt, and it’s expanding with no measurable returns.
Is Planet Fitness Even Still a Good Gym?
Now that we know the financial situation of what’s going on over there at PF, it begs the question: Why are there more members than ever?
Why are people so eager to flock to Planet Fitness? Is it Gen-Z that needs a safer environment? Or are other gyms lacking in equipment?
- When looking at the reasons why most people do or don’t make it to the gym, you can almost begin to see why people prefer Planet Fitness. The top reasons for skipping the gym appear to be lack of time and then lack of confidence. This could be part of the reason why people prefer Planet Fitness. It’s a gym that’s more accessible and “friendly.”
As someone who trains twice a day, this bothers me. I cannot recall a single time I’ve heard someone belittle someone for trying to better themselves.
While feeling unsafe in a new environment is normal, Planet Fitness aims to ease the transition. They have pizza days where they provide free pizza, there are rules regarding how much weight you can use, etc.
Does this mean that the future for Planet Fitness is looking up? Well, time will tell. Looking at their finances, it doesn’t look good. Perhaps a price increase is looming — who knows?
What Is the Target Market for Planet Fitness?
While there isn’t a specific target market for Planet Fitness, they aim to create an environment that speaks to those that want safety in a gym.
Their gyms aren’t aggressive or stereotypically “masculine” in nature like a powerlifting gym, for instance. They have certain rules and regulations about how and how much you can lift.
This is great for the right individual, but it also eliminates a large majority of the population. For example, enthusiasts. Or people who go to the gym for performance.
These are the most polarizing of the clientele, but then again, the most memorable of things in life are those that choose to be themselves at all costs. You can’t fault Planet Fitness for what it is — an introductory gym.
Why Do Most People Quit the Gym?
You’ve probably heard stories amongst your peers about people leaving the gym, but could there be a reason for most folk leaving the gym?
According to most who do end up leaving, the reasons include:
- Not having the time to train
- Losing motivation to keep training
- Misunderstanding how much work is actually needed to see results
This may not be what you expected and certainly not what social media would have you believe. Contrary to popular belief, injuries or discrimination against the obese is not among the top reasons people leave the gym.
What Percentage of Gym Memberships Go Unused?
It’s hard to be precise, but it’s estimated that around 18% of all gym memberships go unused. With the average gym making $500 per year from each member and 73.6 million people having memberships, it would appear that $6.5 billion dollars just go unused each year.