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Is the fitness industry poised for a shakeout similar to what happened to the airlines? Low priced low frills airlines have caused several legacy airlines to declare bankruptcy. If Planet Fitness has it's way, a new Spartan offering with a commensurate low price may also shake up the health club world. The concept appears to be gaining traction. Is this the next step up from express gyms?

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With the recent explosion of lower price express gyms, it begs the question, "Is this the wave of the future?". Not to say that the high priced Equinox's of the world are feeling a threat since they appeal to the very affluent. But the middle-tier gyms like Gold's, World Gym, and Powerhouse may be threatened by this new model.

Planet Fitness is the brainchild of Mike Grondahl. Grondahl's Planet Fitness is not to be confused with the Planet Fitness chain that was purchased by Bally in April of 2002 and mostly converted to Crunch Gyms. Gondahl came from the traditional club model, and after much observation, he conceived of the commoditization effects and thus launched his new model that would be more appealing to the deconditioned market that eschew traditional gyms.

Grondahl opened his first club in 1997 and launched his franchise business in 2003. Today there is a mix of both corporate owned and franchise clubs. The clubs are predominantly in the Northeast with occurrences beginning to appear in Florida, Texas, Arizona, Illinois, North Carolina, Alabama and Michigan.

What's the attraction?

The attraction to Planet Fitness appears to be low price and no frills. The initiation fee is just $99 and the monthly fees range anywhere between $10 - $19 per month, with the average falling at around $15 per month. This is cheaper than the average Curves membership.

Planet Fitness clubs also typically don't include group exercise classes, day care or swimming pools. They consist predominantly of cardio machines with selectorized resistance machines and some free weights, but not enough free weights to attract the muscleheads. The key is to maintain a non-intimidating environment.

The corporate facilities, which serve as a model for the franchised units, average 12,000-26,000 square feet in size; are open 24 hours a day; have more than 100 pieces of cardio equipment, including stationary bikes, treadmills, climbers, and elliptical cross-trainers.

Breaking Away from the Body Builder Image

Thus it's easier for newbies to join because they are not intimidated by the grunting and groaning of the muscleheads. Therefore the model is designed to appeal to a broader market. Women seem to be more comfortable because free weight and strength equipment are kept to a minimum.

Gym Franchise Plan

Franchisees pay an initial franchise fee of roughly $25,000 and a monthly fee that operates on a sliding scale somewhere between $500 to $3,500 depending upon revenues. The buildout and equipment costs of starting the gym are extra. All told, the total start-up investment will most likely range between $500,000 to $1 million. www.planetfitness.com.

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