A Detailed Look Into the Planet Fitness App [and its Business Model]

What is Planet Fitness?

Planet Fitness is a franchisor and operator of fitness centres based in America. It came into existence to give a run for money to established budget-friendly gym chains like 24 Hour Fitness. Here are some fundamentals of the fitness club services provider:

Founders – Michael Grondahl, Marc Grondahl

Founded in – 1992

Headquarters – Hampton, New Hampshire, U.S.

Net Revenue (2021) – $587 million

No. of Employees (2020) – 1,387

Total No. of Stores (September 2022) – 2,353

Total Members (September 2022) – 16.6 million+

Hitting the Jackpot During the COVID-19 Outbreak

Planet Fitness has been doing business since 1992. It was making continuous improvements but all of them were small compared to what the organisation achieved during the coronavirus pandemic.

When other businesses were finding it difficult to come out triumphant in the wake of COVID-19, PF managed to up its game by focusing on creating a safe environment for its members and marketing its services around it. The results were amazing. The features that made PF enhance its appeal were the following:

• Making masks mandatory
• Placing cardio machines 2 metres (6 feet) apart
• Enforcing cleanliness
• Launching a work-out-at-home program to keep customers engaged even during lockdowns

On 15th February 2023, Planet Fitness made it to the Forbes list of America’s Best Employers 2023 in the Midsize Employers Travel & Leisure category. Competing among 3500 entrants, the American franchisor is listed among the top 500.

How does Planet Fitness Work?

Planet Fitness targets customers looking for cost-effective fitness services. It owns and operates a line of more than 2.3k fitness clubs across North America. In addition to America, Canada, Dominican Republic, Mexico, and Panama, PF offers services in Australia.

Fitness Centres, Franchise Requirements and Fees

PF started franchising in 2003. The net worth and liquid cash requirements for a Planet Fitness franchise are $3 million and $1.5 million, respectively.

The initial franchise fee is $20k, the area development fee is $10k, and the royalty fee is 7% of the total gross monthly/annual membership fees. By March 2022, the member count crossed 16 million.

A typical PF fitness store is 20,000 square feet of bright and clean space populated with PF-branded cardio, circuit-, and weight-training equipment and staff trainers.

The Planet Fitness trainers provide free fitness instruction to members in small groups via the PE@PF program. For its standard membership, PF provides this at only $10 a month. This value appeals to a broader population above 14 in the US and Canada, especially those who find traditional fitness clubs expensive.

Targeting Non-Fitness Market Segments

Compared to other fitness services, Planet Fitness also focuses on non-fitness industries. According to its 2021 annual report, PF has about 250 million users and made system-wide sales of $3.4 billion.

That’s because apart from the conventional health club market, PF offers services in entertainment, leisure, sports, and other non-fitness activities.

Planet Fitness Mobile App

Instead of being only a full-fledged front for selling fitness services and introducing newcomers to PF, the Planet Fitness workout app serves the purpose of an excellent marketing tool. Some of the top reasons that make the Planet Fitness app such a huge success include:

• A progress tracker
• Couch to Gym Program is a 10-part course designed to introduce newcomers to gymming
• Crowd Meter, which is a feature that lets the users know when the gym is at low capacity

• Healthy Heart Workouts is an assortment of free fitness workouts for cardio, strength training, yoga, and more
• Pre-recorded exercise sessions on cardio and weight lifting from trainers

The fitness app works excellently in tracking workouts for users. It also provides a good range of features to Planet Fitness members, including a tracker to tell the users when it is a good time to work out in the gym.

The tracker (Crowd Meter) not only helps the business to operate optimally but also increases user retention and facilitates the delivery of personalised services.

Its app combined with a continuous barrage of partnerships and sponsorships allowed PF to become one of the most recognized names in the fitness and wellness industry.

Screening Businesses to Partner With

Planet Fitness sticks to a Franchise business model for developing new stores. This allows them to leverage distinct local market expertise. While considering a potential franchisee, PF evaluates:

• Available capital and financing
• Financial history
• History in managing P&L operations
• Previous experience in franchising or multi-unit businesses

As we can see, PF follows a stringent selection process when it comes to adding new stores. This helps the fitness service to ensure quality delivery to its members while expanding its reach simultaneously.

Planet Fitness Business Model [Revenue Streams]

Planet Fitness enjoys a wide diversity of ways to generate revenue, contributing to making it one of the leading gym and fitness service providers in North America.

Although there are numerous revenue sources available to PF, most of these can be categorised into one of these three main sources of generating revenue:

1.Franchise-based

Franchise segment revenue refers to the services that Planet Fitness provides to its franchises. It is the major source of revenue for PF. Franchise-based revenue includes:

• Commission income from franchise-owned stores
• Franchise fees
• Placement revenue
• Royalty revenue
• NAF (National Advertising Fund) revenue

Out of the $587 million that Planet Fitness earned in 2021, Franchise-based revenue accounted for $290 million, which is almost 50% of the entire revenue.

2.Corporate-owned Stores

In addition to catering affordable fitness services to individuals, Planet Fitness offers organisations a way to operate their fitness centres to provide fitness services to their employees.

Such stores are called corporate-owned stores, and these stores generate revenue for PF in the following forms:

• Annual fees
• Enrollment fees
• Monthly membership fees
• Prepaid fees
• Retail sales

This revenue stream accounted for more than 29% or approximately $171 million of the entire revenue generated by Planet Fitness in 2021.

3.Equipment-based

PF necessitates franchisee-owned stores to replace their exercising equipment every 5 to 7 years. The equipment-based revenue includes:

• Equipment revenue for new stores
• Equipment replacement revenue for existing stores

Planet Fitness earned $129 million in equipment-based revenue in 2021.

Planet Fitness Business Model Canvas

Why Develop a Planet Fitness Like App from Apptunix?

We have helped organisations to sell their services effectively by building mobile apps that complement their business operations. Our experts have a wide-ranging experience in fitness app development and are comfortable working with all leading technologies.

Check out the following live demo to know how we help our clients with building an app like MyFitnessPal:

Apptunix has developed dozens of health & wellness and fitness apps for businesses across the globe. We leverage the latest mobile app development practices to ensure you get a uber modern fitness app. Building your own fitness app with us gets you:

• Fully-customizable solutions
• Invaluable app development advice
• Outstanding UI and UX
• Ownership of the entire source code
• Smart fitness coach integration
• Superior activity tracking and more

The exact cost of building a fitness app will depend on the types of features you offer. Therefore, you need to factor in the features that you want in your fitness app while creating your budget. If you don’t want to do it, then Apptunix can help you with that too.

Conclusion

PF is a multi-million business that has been going strong for the past 3 decades. The Planet Fitness app is a shining example for businesses looking forward to developing and profiting from a health and wellness app while marketing itself at the same time.

In addition to the standard exercise programs and trackers – activity, calorie, and so on – your app must be able to deliver personalised experiences to the users and cater to their exact requirements.

Adding new features and improving your existing ones regularly will help your business to survive and thrive and make the most out of the evolving fitness trends. Godspeed!