Planet Fitness CEO Chris Rondeau has been with the company more than 20 years and, with the completion of a recent IPO, he is confident that brand loyalty is bigger and better than ever.
“For the past two decades, we have evolved Planet Fitness into one of largest and fastest growing franchise owners and operators of fitness centers in the U.S. with over 7 million members and more than 1,000 stores in the U.S.,” Rondeau explained during the company’s second-quarter earnings conference call on Wednesday, according to Seeking Alpha. “The winning formula has an ability to provide a welcoming, non-intimidating environment at an exceptional value. Our differentiated fitness concept, nationally recognized brand, and easy-to-operate store model have created significant growth opportunities for our company and network of franchises. We believe we’ll continue to deliver highly profitable recurring revenue for years to come.”
Thanks to this unique approach of fitness, the market opportunity for Planet Fitness is much larger than the competition, Rondeau noted.
“We primarily target the epicenter of America that does not want to, for various reasons, join clubs because the environment is too intimidating,” Rondeau said. “I often say that our membership growth hasn’t been driven by the affordable price point, rather the judgment free atmosphere that we’ve cultivated which appeals to so many first time gym users and casual exercises. We've been successful at attracting new members to increase brand awareness and engaging existing members using digital and social platforms.”
Since 2011, Planet Fitness and its franchises have collectively spent more than $150 million on national and local advertising.
“This is a powerful competitive advantage that no one else in our space could come close to replicating,” Rondeau said. “At the same time we have the ability to increase the average monthly dues per member through higher penetration of our Black Card membership. Black Card membership will cost $19.99 per month, compared to $10 per month for our standard membership, providing access to all Planet fitness locations.”
Rondeau said the company currently has 58 corporate stores, including the first two stores in Canada opened earlier this year.
“While the vast majority of our unit growth will come from franchises, we planned to open a couple of corporate stores each year going forward,” he explained. “And in addition to providing a highly profitable recurring income stream, operating stores allows us to sharpen our tactics and test new ideas that we can eventually implement systemwide to further improve the in-store experience for our members.”