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Planet Fitness Franchise ProfileFitness Franchises > Gyms |
What is the Initial Investment for a Planet Fitness Franchise?
To open a Planet Fitness franchise, the initial investment ranges from $1,504,600 to $5,158,500. This includes a franchise fee of $20,000. Potential franchisees should also be prepared for additional costs such as equipment, leasehold improvements, and other startup expenses. A cash requirement of $1,500,000 to $2,500,000 and a net worth requirement of $1,500,000 to $3,500,000 are necessary to qualify for ownership.
What are the Ongoing Fees for Planet Fitness Franchisees?
Franchisees must pay a royalty fee of 7% on gross revenue, along with a marketing fee of 2%. These ongoing fees contribute to the overall support and brand marketing provided by Planet Fitness, helping franchisees to attract and retain members in their local markets. Understanding these fees is crucial for financial planning and profitability.
What is the Average Revenue Potential for a Planet Fitness Franchise?
Planet Fitness franchises boast an average annual revenue of $1,786,328, with a median revenue of $1,227,398 per unit. The highest recorded annual revenue per unit is $5,352,916, showcasing the potential for significant earnings. However, revenue can vary widely, with the lowest annual revenue reported at $322,779. This variability emphasizes the importance of location and market conditions in determining success.
How Long Does it Take to Break Even with a Planet Fitness Franchise?
Franchisees can expect a breakeven period of approximately 24 months. This timeframe is critical for new owners to understand, as it influences cash flow management and financial planning. Additionally, the investment payback period is also around 24 months, indicating that franchisees may start to see returns on their initial investment within this timeframe, assuming operational efficiency and market demand are met.
Planet Fitness Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Planet Fitness Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 2071 | 2305 | 2456 |
| Net Change YoY | 234 | 151 | |
| Franchised Units | 1961 | 2073 | 2202 |
| Net Change YoY | 112 | 129 | |
| Corporate Units | 110 | 232 | 254 |
| Net Change YoY | 122 | 22 |
Franchise Overview
Planet Fitness is a leading fitness franchise known for its affordable membership options and a welcoming atmosphere. With over 2,200 locations across the United States and a rapidly growing presence internationally, Planet Fitness caters to a diverse clientele, emphasizing a non-intimidating environment for all fitness levels. The franchise promotes a unique "Judgment Free Zone" philosophy, appealing to those who may feel uncomfortable in traditional gyms.
Investment Requirements
Starting a Planet Fitness franchise requires an initial investment ranging from $1,504,600 to $5,158,500. Franchisees must pay an initial franchise fee of $20,000. Additionally, a cash requirement of $1,500,000 to $2,500,000 and a net worth requirement of $1,500,000 to $3,500,000 are necessary to ensure financial stability and support for operations. These figures reflect the brand's commitment to maintaining a high standard across its locations.
Financial Performance
The average annual revenue for a Planet Fitness unit is approximately $1,786,328, with a median revenue of $1,227,398. The franchise has reported a range of annual revenues, with the lowest at $322,779 and the highest at $5,352,916. This financial performance indicates a strong potential for profitability, particularly for franchisees who effectively manage their operations and marketing strategies.
Ongoing Fees
Planet Fitness franchisees are required to pay a royalty fee of 7% of gross sales, alongside a marketing fee of 2%. These ongoing fees contribute to the brand's national marketing efforts and support franchisee operations, ensuring that all locations benefit from the collective strength of the Planet Fitness brand.
Growth Trajectory
The growth of Planet Fitness has been significant, with franchised units increasing from 1,961 in 2021 to 2,202 in 2023. The overall total units grew from 2,071 to 2,456 during the same period. This expansion reflects the brand's popularity and the increasing demand for affordable fitness options, positioning franchisees for potential long-term success.
Operational Insights
Planet Fitness maintains a low-cost operational model, with average annual operating expenses totaling around $182,195. Key expenses include store operations, selling and administrative costs, and contributions to the National Advertising Fund. With a gross profit margin of 98.9%, franchisees can focus on optimizing their operational efficiency while delivering a high-quality fitness experience to members.
Frequently Asked Questions
The initial investment for a Planet Fitness franchise ranges from approximately $1,504,600 to $5,158,500. This includes the franchise fee, equipment, leasehold improvements, and other startup costs.