Author Topic: Planet Fitness - how do they turn a profit? (Read 6213 times)

TheGrinch · « **on:** January 21, 2015, 09:49:24 AM »

Have a good friend who wants to open a planet fitness franchise.. but I keep telling him it makes no sense..

I know nothing about business but charging $10/mo membership fee?

how can you afford to pay even the electricity bill let alone all the other business expenses??

_aj_ · « **Reply #1 on:** January 21, 2015, 09:51:34 AM »

Quote from: TheGrinch on January 21, 2015, 09:49:24 AM

Have a good friend who wants to open a planet fitness franchise.. but I keep telling him it makes no sense..

I know nothing about business but charging $10/mo membership fee? how can you afford to pay even the electricity bill let alone all the other business expenses??

Get 15,000 fatasses to pay $10/month and never show up. The perfect Planet Fitness never has to open its doors in the morning. Every person that uses the equipment is a FAILURE of management to maximize the gym's potential.

pissant · « **Reply #2 on:** January 21, 2015, 10:04:31 AM »

The one by my house is always packed. Always have people signing up at the front desk. They actually are one of the most successful gym franchises.

The_Punisher · « **Reply #3 on:** January 21, 2015, 10:05:02 AM »

150k/monthly wouldn't be bad for business

SquidVicious · « **Reply #4 on:** January 21, 2015, 10:11:32 AM »

Owning a gym is a great business for any rich person looking to grow poor.

El Diablo Blanco · « **Reply #5 on:** January 21, 2015, 10:16:09 AM »

they push as many memberships as they can with hopes many won't show up. They charge low monthlys but lock you into a long term deal so even after a month you still have to shill out to them when you stop going.

Marlo Stanfield · « **Reply #6 on:** January 21, 2015, 10:22:47 AM »

Quote from: _aj_ on January 21, 2015, 09:51:34 AM

Get 15,000 fatasses to pay $10/month and never show up. The perfect Planet Fitness never has to open its doors in the morning. Every person that uses the equipment is a FAILURE of management to maximize the gym's potential.

^

the gym i go to has 13,000+ active members, about 600-700 people come there at least once a week. Mind you, this isnt one of those 10$/month memberships.(average 30$/month)

The market is now saturated with 10$/month gyms and the whole "crossfit" gyms, so starting now would be a little late, unless you absolutely nail the location.

ritch · « **Reply #7 on:** January 21, 2015, 10:30:43 AM »

Quote from: SquidVicious on January 21, 2015, 10:11:32 AM

Owning a gym is a great business for any rich person looking to grow poor.

I've been told to not go in the business either...

SF1900 · « **Reply #8 on:** January 21, 2015, 10:39:54 AM »

How much money do you think it takes to upkeep (clean, fix machines, etc) a planet fitness when the members rarely show up? Probably not much.

That equals profit.

Carlton G. Long · « **Reply #9 on:** January 21, 2015, 10:42:19 AM »

Quote from: El Diablo Blanco on January 21, 2015, 10:16:09 AM

they push as many memberships as they can with hopes many won't show up. They charge low monthlys but lock you into a long term deal so even after a month you still have to shill out to them when you stop going.

they don't "lock you into" anything ... you can quit any time

most fat phucks are too lazy to get to the gym and cancel, of course

pissant · « **Reply #10 on:** January 21, 2015, 11:01:33 AM »

Quote from: Carlton G. Long on January 21, 2015, 10:42:19 AM

they don't "lock you into" anything ... you can quit any time

most fat phucks are too lazy to get to the gym and cancel, of course

they charge you a yearly fee i believe which is a way to semi lock you in but I do think you can quit any time.

Soul Crusher · « **Reply #11 on:** January 21, 2015, 11:08:43 AM »

Planet Fitness is a brilliant business plan.

Noel Fuller · « **Reply #12 on:** January 21, 2015, 11:09:48 AM »

The game plan is to close down 24 and LA fitness, they make money off personal training but they are killing the gym business.

oldtimer1 · « **Reply #13 on:** January 21, 2015, 12:14:57 PM »

Mike Katz had a World gym but changed it to Plane Fitness. I think that speaks volumes about which is the bigger money maker.

Noel Fuller · « **Reply #14 on:** January 21, 2015, 12:18:44 PM »

World gym and Golds does nothing to help sell memberships anymore, not worth the franchise fee, whens the last time you heard a Worlds gym commercial on the radio.

Natural Man · « **Reply #15 on:** January 21, 2015, 12:31:52 PM »

they found the winning formula, more power to them. I wouldnt ask anything to any of their PTs tho.

Earl1972 · « **Reply #16 on:** January 21, 2015, 03:29:47 PM »

special ed said it best, the ideal planet fitness customer is somebody that pays for a membership but doesn't go to the gym

most probably only show up for free pizza night

E

Montague · « **Reply #17 on:** January 21, 2015, 04:38:31 PM »

Quote from: Earl1972 on January 21, 2015, 03:29:47 PM

special ed said it best, the ideal planet fitness customer is somebody that pays for a membership but doesn't go to the gym

most probably only show up for free pizza night

E

Unethical, but an excellent business model.

ESFitness · « **Reply #18 on:** January 21, 2015, 08:49:56 PM »

12k square foot gym

$12k/month rent
$3k electric
$30k salaries
$1k insurance
$2k cleaning crew

=4800 members at $10/month just to cover their nut (that's including 30k/month in salaries.. assuming the 'owner' takes a salary)

for a planet fitness, 4800 isn't an un-attainable membership goal. considering that when the local Golds gym's dropped their rates to 10$/month, they went from 6000-something members to over 14k members

... and remember, the membership dues are just what covers the bills. the REAL money is in the personal training sales, which can book anywhere from 2k-45k/month

CARTEL · « **Reply #19 on:** January 21, 2015, 09:02:13 PM »

Quote from: ESFitness on January 21, 2015, 08:49:56 PM

12k square foot gym

$12k/month rent
$3k electric
$30k salaries
$1k insurance
$2k cleaning crew

=4800 members at $10/month just to cover their nut (that's including 30k/month in salaries.. assuming the 'owner' takes a salary)

for a planet fitness, 4800 isn't an un-attainable membership goal. considering that when the local Golds gym's dropped their rates to 10$/month, they went from 6000-something members to over 14k members

... and remember, the membership dues are just what covers the bills. the REAL money is in the personal training sales, which can book anywhere from 2k-45k/month

Don't you have to deduct the cost of Pizza Friday or some shit?

Pray_4_War · « **Reply #20 on:** January 21, 2015, 10:01:50 PM »

Planet Fitness can eat my ass. Fuck their entire organization from top to bottom. Whoever came up with the "Lunk" think should fucking kill themselves.

240 is Back · « **Reply #21 on:** January 21, 2015, 10:12:52 PM »

I have a theory.

They buy THREE store fronts in every plaza. The big one in the middle is for their "gym".

On either side, they add a pizza or ice cream joint. They pull all these people to that plaza - okay money, a little upset at their weight, but fatasses lacking control nonetheless... and voila, they sell shit food to make up for any gym operation losses.

Mike · « **Reply #22 on:** January 21, 2015, 10:20:18 PM »

Quote from: Marlo Stanfield on January 21, 2015, 10:22:47 AM

^

the gym i go to has 13,000+ active members, about 600-700 people come there at least once a week. Mind you, this isnt one of those 10$/month memberships.(average 30$/month)

The market is now saturated with 10$/month gyms and the whole "crossfit" gyms, so starting now would be a little late, unless you absolutely nail the location.

Agreed, location is key.

Plus PF is a branded chain that has marketing already built in.

Ive managed an LA fitness, an Xsport and a small training facility and the chains are easier because of the corporate support but location is still key

_aj_ · « **Reply #23 on:** January 22, 2015, 05:53:07 AM »

Quote from: Pray_4_War on January 21, 2015, 10:01:50 PM

Planet Fitness can eat my ass. Fuck their entire organization from top to bottom. Whoever came up with the "Lunk" think should fucking kill themselves.

From a business standpoint, it's brilliant. How else are you going to lure in the fucking fatties that are going to buy a membership and then never show up? The LAST thing that you want is dedicated lifters that consistently show up and put wear and tear on your shit.

In almost any big-box gym, less than 10% of the membership will show up in a 30 day period. 10 years ago, I belonged to a Gold's that had a lot of serious lifters. People I saw day in and day out. Talking to the membership director, he said that they had over 5000 monthly paying members and in any 30 day period, only 600 came. Think about that, just once a month shaved the crowd from 5000->600. If all the members showed up one day, the place would have to close.

If he could have found a way to cancel the membership of those 600, he would. Why not? They represent ALL of the costs and 12% of the revenue. They are a poor ROI.

Devon97 · « **Reply #24 on:** January 22, 2015, 07:08:09 AM »

I have to tell a funny story, back in 2001 when one of the first LA Fitness MEGA-clubs opened in the area it was jam packed every week night and by the 3rd month it was open it was like a sardine can is was so over packed with people.

The management got many complaints from disgruntled members telling them to STOP SELLING MEMBERSHIPS! lol

One of the sales managers classic response was " You don't tell Ford to stop selling cars just because there's a traffic jam."