Strength of the system On the point of membership bounceback, Rondeau clarifies: “If you look at a per-site basis, membership is not quite back to pre-pandemic levels, but we’ve opened more locations – 130 in 2020 – and we’re on track to open between 110 and 120 in 2021.” That might be fewer openings than usual – “put 2020 and 2021 together and it’s almost a normal year”, he says – but interestingly, more than 95 per cent of the franchises sold in 2020 went to existing franchisees. And their confidence seems well placed. Rondeau explains: “Across the US, 22 per cent of all gyms closed permanently as a result of COVID. Within the Planet Fitness system, I’m extremely thrilled to say that, out of all our franchisees, we didn’t have one permanent closure or bankruptcy. We didn’t lose a single one. “I think it’s testament to the brand, the strength of our model and the strength of our franchisees. If this
The domestic potential for Planet Fitness sites is ‘at least 4,000’
photo: chris rondeau/planet fitness
month. Now it’s about six, which – when you scale it up over 15 million members – is significant.” Meanwhile, Black Card – Planet Fitness’s premium membership, which includes additional services and guest passes – is now held by 62.5 per cent of members, “up slightly from the same period last year”.
Rondeau: we have to show people we’re part of the healthcare system
had happened 10 years ago, I’m not sure we could have weathered it quite as well as we did, but we’ve been franchising for almost 20 years’ now. Ours is a strong group of sophisticated franchisees who could weather a storm like this and get to the other side.” They weren’t left to battle through it alone: “We have an independent franchise council who we worked with weekly, going through the obstacles people were having and putting together playbooks. We also had monthly Zoom calls with franchisees, because in some states, they were already operating and had a lot of learnings we could redirect to people in the rest of the system. “And then financially, we weren’t charging any royalties. We also gave franchisees a one-year extension on new site development commitments and an 18-month extension on their re-equip schedule: we’re normally pretty adamant that stores are re-equipped every five to seven years. “In actual fact, our franchisees are back to opening locations ahead of schedule and are re-equipping their clubs ahead of their obligations. The business is back and the memberships are coming through, so franchisees are confident to begin to get back to previous growth plans.” More growth to come So how big can Planet Fitness get?“Pre-COVID, all our market analysis indicated the domestic potential here in the US to be 4,000 units. Of that, over 3,000 are already committed. Over 1,000 are sold to our current franchisees for development, on top of the 2,200 stores we already have open. “But we sold a lot of area development agreements seven or eight years ago, and there’s ©Cybertrek 2021 Issue 11 2021