DOVER, NH – Planet Fitness finalized the purchase of the World Gym franchise Monday, according to Mike Grondahl, owner of the low-cost, no-frills Planet Fitness, which is based in Dover, NH. Grondahl would not disclose the exact purchase price but stated it was more than $10 million.
World Gym franchisees will continue to operate their facilities as World Gym locations with all their programming and membership pricing in place. However, if some World Gym franchisees want to switch to the Planet Fitness brand, they will be allowed to do so, says Grondahl. Grondahl plans to keep both franchises operating under their current names and as two divisions of the company.
“We’re not trying to change World Gym into Planet Fitness,” says Grondahl. “We’re taking best practices of Planet Fitness and putting it into World Gym.”
Franchising fees will “stay in line” with what they are now, he says, but they will be paid on a sliding scale that will slide with EFT if corporate is providing marketing material to the franchisee. Franchisees that don’t want marketing help will be left alone, he says.
Immediate plans are to change World Gym’s brand to make it appeal to a broader market, says Grondahl.
“It’s going to be a younger brand, more urban, more edgy, almost Crunch like with a little more of an edge,” he says.
Grondahl dismisses any concerns that the two brands might compete for the same members saying that the Planet Fitness brand is more of a suburban brand while the World Gym brand is more urban.
The company plans to bring marketing expertise to World Gym franchisees who had to rely on marketing consultants in the past, something Grondahl says has held back World Gym from its full potential.
Grondahl’s team will send care packages of new branding materials, pens, literature, T-shirts and other merchandise to the franchisees of the 295 World Gym clubs, and the corporate office will be available to answer franchisee questions, he says.
The deal has been in the works since spring. The Planet Fitness team already has a new mission statement, a new logo and new branding material ready for World Gym franchisees. They also have a 3-D rendering of what World Gym facilities of the future will look like. The new gyms will include three specialized areas that are run as 30 minute or less workout areas—one for 30-minute upper body, one for 30-minute lower body and the third for 15-minute ab workouts—that can run unstaffed. Essentially, these areas will be group exercise areas with no payroll, and they can run nonstop, says Christopher Rondeau, who had been CEO of Planet Fitness franchising but will now be CEO of World Gym. The floor contains cardio, selectorized equipment, free weights and plate-loaded equipment. The new facilities will also offer five glass block tanning rooms and two glass block aqua massage rooms.
A new Web site is also ready for World Gym
www.worldgym.com. The Web site will allow franchisees to take online memberships (as Planet Fitness’ Web site already allows). The site will also take balance payments, billing changes and member surveys. Franchisees will be able to change their group fitness schedules quickly on the Web site and order merchandise, buildout/branding materials and printer-ready, front-desk operation paperwork directly off their franchisee login, says Rondeau.
Mike Uretz, former CEO and president of World Gym, will stay with the company for two years as a consultant, Grondahl says.
Uretz says of the purchase, “I’m more excited about this than anything else that I’ve done in my career. They have the infrastructure and the wherewithal to add the things that all World Gym and all gym owners need to be successful. It’ll translate into the World Gym world.
Karin Michaels, who worked in franchisee support at World Gym, will move to Dover in the next few months and continue supporting the World Gym franchisees.
This may not be the last purchase for Planet Fitness. Grondahl has two confidentiality agreements in place with two other club companies, he says.
“You are going to be hearing a lot of noise from us,” Grondahl says.
