There a lot of available businesses that you can franchise, from the most common restaurants down to car service shops. Franchising became so popular because it is probably the easiest way to earn money through business. Franchising also means that you are carrying the name of a famous brand, so you won’t have to work very hard just to make your business get recognized by people. Aside from restaurants and service shops, you can also franchise a fitness center. And one famous fitness center is Planet Fitness. So how much does Planet Fitness franchise cost?
Average Planet Fitness Franchise Startup Fee
So what really is Planet Fitness? It is a popular fitness center that targets new and infrequent exercisers. Because a lot of casual exercisers get daunted by hardcore body builders, Planet Fitness made a rule to discourage these very serious exercisers. That is why it labeled itself as the “Judgement Free Zone”. It is also popular because of its affordable and cheap gym fees.
Another factor that made Planet Fitness a popular fitness center is the way they interact with their customers. Every first Monday of each month, this company offers Pizza Night to their customers. On the second Tuesday of each month, they also have Bagel Morning. And every day, Planet Fitness gives free Tootsie Rolls as a complimentary for their customers.
This company is also the main sponsor of the U.S. TV series “The Biggest Loser”. Making it more popular throughout the whole United States.
As of today, Planet Fitness have more than 1,300 fitness centers open across 48 states in the US, Canada, and the Dominican Republic. But before these people became a franchisee, they were able to qualify with their criteria. As for Planet Fitness, you will need at least a net worth of around $3,000,000 and around $1,500,000 liquid assets. The average Planet Fitness franchise cost usually runs around $853,300 up to $3,669,150. And of course, the price depends on many factors. Here is the detailed cost breakdown of the Planet Fitness franchise:
- Initial Fee – The first and foremost factor that affects the price. Planet Fitness franchise startup fee is $20,000. Upon signing an Area Development Agreement, you will have to pay $10,000 for the Area Development Fee per location and Planet Fitness will require you to have a minimum of 5 locations. However, if you pay the Area Development Fee, you will not have to pay for the initial franchise fee anymore.
- Selection of the Site – This is another factor that you will have to consider when you are franchising Planet Fitness. This fee is the reimbursement cost that you will have to pay for the company whenever they make site evaluation every time you make a request. This reimbursement fee includes the cost of travel, food, and lodging. The cost usually runs around $1,000 up to $3,000.
- Leasehold Improvements – The biggest factor that will surely add up to your total Planet Fitness franchise cost. This company will require you to locate your business at strip centers, malls, or any freestanding locations. They also require at least 15,000 square feet up to 25,000 square feet of land. You will be the one to pay for the site work and any building improvements. The cost for this factor can run from $619,000 up to $1,561,000 depending on the location, the size, and many other factors.
- Equipment – You cannot operate your fitness center if you don’t have any fitness equipment. And you will need to purchase or finance them at an approved supplier of the company. If you choose to purchase, expect to spend around $359,900 up to $830,000 for the complete equipment. On the other hand, if you choose to finance, you will need to make an estimated down payment of around $35,990 up to $251,000.
This factor also includes non-fitness equipment such as lockers, fans, interior signage, televisions, tanning beds, trusses, and much more. You can also either finance or purchase this non-fitness equipment. Financing it may cost you around $10,000 up to $85,000 for the down payment. On the other hand, purchasing them may cost you around $101,000 up to $285,000. The price will depend on the size of your building and the amount of equipment required.
- Signage – $15,000 up to $50,000
- Operating Equipment (P.O.S systems, Hardware and Software) – $13,000 up to $21,000.
- Insurance – $11,000 up to $21,000
- Training – Before you can fully run your business, you will have to complete the training course that is required by the company. And this usually can make you spend out-of-pocket costs which usually runs around $1,500 up to $6,000.
- Operational Funds – Since you will not be earning much for the first 6 months of your business operation, you will have to finance it yourself. The cost would run around $150,000 up to $565,000 for a 6-month operation.
After knowing how much is the Planet Fitness franchise startup fee, you will also need to know the extra costs that you will make as long as your business is running. Here are some of them:
- Royalty Fee – Now that your franchised business is completely operating, you are obliged to pay the ongoing royalty fee. For Planet Fitness, they require their franchisees to pay 5 percent of their total monthly gross and the annual membership fees for the royalty fee.
- National Advertising Fund – As a franchisee, you are also required to pay their National Advertising Fund fee which is 2% of your total monthly gross.
- O.S Support – You are also obliged to pay the fees related to the P.O.S. support and processing services. The cost would run around $149 up to $200 plus the processing and credit card fees. All of these depends on the number of transactions that are processed each month.
Normally, there are a lot of processes involved in franchising. Same goes to Planet Fitness. You might also be wondering how do Planet Fitness earns a lot of money if they only have low-cost gym fees? Well, Uproxx can explain to you how Planet Fitness does it.