Calling all bodybuilders and couch-potatoes alike: Planet Fitness can make you money! The business model of a gym is quite simple, yet very lucrative: They sell you the membership, then bank on the fact that you won't show up. Planet Fitness is a budget gym, charging between $10 and $20 per month to use their facilities.
The average Planet Fitness gym has 6,500 members, and most of its gyms can hold no more than 300 people. If you've been to a Planet Fitness gym - or any gym, for that matter - odds are that it wasn't packed. If everyone showed up and worked out at the same time, the gym would be chaotic. To implement their business plan and make sure that their locations aren't too crowded, Planet Fitness targets those who won't come. Planet Fitness certainly attracts the casual gymgoer. The gym mimics a hotel lobby in the front, and hides intimidating free weights and benches in the back. This design weeds out the muscle-heads (or, in Planet Fitness terms, the "lunks"), and ensures that the majority of the members are the complete opposite type. Furthermore, while gym equipment may be expensive, most of the machines are in use for years without ever being replaced. Aside from the equipment, the only other noteworthy expenses are salaries/hourly wages for employees, rent and utilities. This means that in the long run, Planet Fitness' business plan is evermore enticing to investors. As of March 31, 2015, there are 976 Planet Fitness locations across 47 states, Puerto Rico and Canada, and has more than 7.1 million members. The company has not disclosed anything about the IPO beyond its ticker symbol, PLNT. Learn how to invest in companies BEFORE they IPO: click here.
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