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FRANCHISES

The Secret of Planet Fitness's Success

Keeping things simple has helped the fitness chain grow to more than $500 million in revenue.

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New Year's resolutions are typically made when the confetti is still in the air. But when it comes time to make good on the promise of getting into shape, many people are intimidated by gyms filled with musclebound bodybuilders. That's where Planet Fitness comes in. CEO Michael Grondahl co-founded Planet Fitness in 1992, branding it as the antifitness fitness club, with cheap memberships and a judgment-free environment for anyone interested in getting off the couch. The decision has paid off. The Newington, New Hampshire, business had $519.7 million in revenue in 2011, landing it at No. 1,752 on the Inc. 5000. Planet Fitness has about 4.4 million members and 616 clubs across 48 states. Below, Grondahl explains how Planet Fitness keeps people sweating during the coldest, busiest months of the year. --As told to Judith Ohikuare

After New Year's, people always say, "I'm going to start now. This is the year I'm going to get in shape." The odd thing is, March is our best time of year. That's how bad people are--they push it off until then.

Sales are about 10 percent higher in March than they are in January, which is our second-biggest month. We run promotions in the last week of the year and in the first week of January, where members can join for about $10 down and $10 a month. And on the first Monday of each month, we give away unlimited pizza. About 350,000 people sign up in the first week of the year alone.

Still, winter in the Northeast can really screw up sales. An ice storm or disaster like Sandy is obviously bad for business. The big thing is to get on the radio and let people know that they're still welcome. We have ads telling members which clubs are open, and we ask the plowing company to come more often and bring extra salt or sand.

In the case of really bad storms, we open our clubs to the public and let everyone come in for free. People are freezing out there, and we tell them they can use the showers, catch a workout, hang out and get warm; whatever they need. We make sure to double up on the staff in these locations so we won't have any trouble. It gets us a lot of goodwill.

It's very, very difficult to make money in the fitness industry. In order to thrive, you really have to have a niche and sell it. You've either got to be at the high end or at the low end; otherwise, you're not in at all. We're at the very low end: Members have access to a great club for 10 bucks a month, and I don't see that changing. We keep it as simple as possible, so that there are as few areas to disappoint as possible. When we started out, we included perks that everyone else had, such as day care and yoga classes, but none of that made sense for us.

We got rid of unnecessary perks and went hard with cardio equipment. We also provide weights, but our gyms don't include any of the big, heavy equipment that bodybuilders use. Bodybuilders don't really have any reason to join our gym, which is fine. They spend three to four hours training and make people who aren't in top shape feel uncomfortable. Some guys have attempted to sue us, but I guess bodybuilders aren't classified as a group you can discriminate against.

Branding is really important to us. When you take the time to make a door handle that looks like your logo, a member thinks, If they've thought of that--branding the door handle to get into the club--they're going to take care of me when I need something. It's a very simple business. Some people look at it and scoff, but I just keep smiling and buying door handles.

 

Last updated: Feb 3, 2013




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