Planet Fitness is a chain of fitness centers with over 2000 branches in the US and has given its customers access to several facilities like a gym, tanning beds, spa, gym lockers, hydro massages, etc. Let us know about what is planet fitness net worth
A company’s net worth is determined by several elements, such as the current price of its stock in the market and the number of shares. As of 2022, Planet Fitness has a net worth of USD 7.72 billion. This can be accredited to Planet Fitness earning huge amounts of revenue through their subsidiaries across the country, with very positive customer ratings and overall satisfaction. Therefore their memberships increase every year; as of 2022, there are about 14.8 million members at Planet Fitness. There are several ways how the company makes a profit, through fees collected, advertising, commissions, selling their equipment, etc.
Net worth is slowly built with time with a strong business model of a company, that can stay persistent in its goals.
Their business model:
The company’s business model (the ultimately drives growth and builds net worth in the market) is as follows:
- Franchising as partners
- Expanding via franchising
- Keeping their membership prices decent in comparison to competitors
- Targeting not only fitness freaks but also those who do not regularly exert themselves at gyms.
- Spend consistently on advertising that helps attract more customers
Strategies for Building Net Worth
The net worth of a firm is an amalgamation of its stock number in the market and its price, and the antecedent for this is a firm’s profit/revenue.
Planet Fitness makes revenue in the following ways:
- Royalty fee (through their franchising)
- Planet Fitness has expanded to 2000 branches in the country through franchising.
- It gives the franchisee the right to operate under their trademark.
- About 35% of the profits are made this way when the franchisee pays them royalty.
- The total figure of money earned through this way is USD 143 million as of 2020.
- Planet Fitness charges membership to their customers; Classic and Black Card.
- The prices of these memberships are between USD 10 and USD 23 per month.
- The annual fee is also mandatory for customers, which is USD 39.
- The revenue collected from the membership can is about USD 230 million which can easily be estimated by multiplying the number of members and the monthly dues they pay.
- Equipment sales
- The company has established streams of revenue through selling the equipment to other franchises and customers.
- This involves gym equipment and other related sports accessories.
- Planet Fitness makes about USD 83 million this way, which is approximately 20% of its total profits each year.
- All franchises must pitch 7% into the funds for advertising locally and 2% nationally.
- This accomplishes the mission to attract more customers with continuous advertising efforts.
- Thus, making more money flow via memberships.
- The company makes about USD 43.3 million this way.
- Target market
- Planet Fitness sets itself apart from competitors by inculcating its advertising efforts to regular people who do not go to the gym that often.
- Their customer profile does not involve a gym freak.
- Since 80% of the population does not go to the gym, they attract a lot of customers and thus, make more profits.
- Contained labor cost
- Planet Fitness makes a massive saving on labor costs.
- This is accredited to the fact that their facilities do not offer high-end services that can be expensive to accrue; like providing towels, daycare, gym classes, etc.
- This helps limit the expense by keeping a lesser number of employees.
- Contained fixed cost
- Planet Fitness has standardization in all branches; a 20,000 square feet space.
- They have exterminated their high-end services, like spas, daycare, etc.
- Thus, this step helped create more space for their primary attribute; weight/gym equipment.
- This helps reduced fixed costs like rent, etc.
Planet Fitness has put forth a smart strategy to include all individuals who prefer to keep fit; not specifically those who are gym-freaks. By building this kind of environment, 60% of these individuals eventually are motivated enough to turn their memberships into Black Cards. This is the trick that helped build their net worth, in addition to lower prices in the market and other strategies.
- Can I invest in Planet Fitness?
Yes, their stock is rated in the top ten best stocks and is available on the stock exchange as PLNT.
- What are some of the perks at Planet Fitness?
- Black Card members also get a free t-shirt.
- Access to tanning beds.
- Access to hydro massage (unlimited) and regular massage chairs.
- The spray tan facility is available to Black Card members.
- Is there a special facility to work out my abs?
You will have access to a certified trainer for a fee, who will help you determine your exercise route. Moreover, Planet Fitness has separate rooms for this purpose for stretching your abs with the stretching machine.