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Getting Fit

Regular Joes fuel Planet

Michael and Marc Grondahl opened their fitness club, Coastal Fitness, in New Hampshire in 1992, but they soon realized something: It was awful tough to compete for the everyday gym-goer.

It’s a limited group. Only 12 percent of the population had a gym membership, and so gyms competed by offering amenities: day cares, classes, more and more heavy weights. So rather than add those amenities, the Grondahls started taking them away. 

They also began lowering prices and doing things to make sure the club was a safe haven for those of us who don’t have ripped bodies and aren’t able to bench-press a station wagon. 

By 1998, when the brothers opened their third location, in Concord, New Hampshire, it called itself a “Judgment-Free Zone,” employed a “Lunk Alarm” for people who grunt too loud or drop their weights, and sold memberships for as low as $10 a month.

The concept would ultimately be called Planet Fitness. And it is one of the fastest-growing franchises in the country. The company rose to No. 109, from No. 125, on our ranking. The chain has tripled in size over the past five years. And in the past decade it went from four clubs to 670. 

Apparently, shifting the gym’s focus to regular people worked. “We’re making fitness affordable to everyone, not just people who want to go to the gym every day,” said McCall Gosslein, director of public relations for the Newington, New Hampshire-based chain. 

Planet Fitness’s growth has helped it become the second largest fitness franchise on our ranking, behind No. 88 Curves, and the fifth largest personal services franchise of any sort. 

The fitness sector has long been fertile ground in the franchise business. And many of the most successful concepts in the sector have sought to tap into the market of people who otherwise don’t go to the gym—either because traditional gyms are more intimidating or more expensive. That’s a much bigger market than is the regular gym-going market. 

It’s also a more fickle one, something Curves appears to be figuring out now. The Waco, Texas-based franchise had targeted regular people, women, with clubs specializing in 30-minute fitness routines, spawning an entire sector of copycats, most of which have since faded away. At its peak, the chain had $1.3 billion in system sales, more than 10,000 clubs, and ranked 67th on our list, in 2005.

But sales stagnated, clubs closed. This year it’s No. 89 on our ranking, after sales last year fell to $950 million. The number of clubs declined by 30 percent, to 7,000.

That said, other clubs have found success catering to a clientele eager for low-cost options. Two Minneapolis-based chains, Anytime Fitness and Snap Fitness, keep surging up our ranking. Anytime moved up to No. 134 this year from No. 159. Snap is snapping at its heels, now at 157, from No. 170 a year ago. 

The growth at Planet Fitness was enough to lure TSG Consumer Partners, a private equity group based in San Francisco, and with offices in New York, to buy a majority stake of the company. Since then, Planet Fitness has been increasing staff: The company increased support staff by 40 percent and added a new point of sale system. In other words, expect the chain to continue on its current trajectory. 

 

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