How Free Pizza Helped Make Planet Fitness The Fastest-Growing Gym Franchise In America

How Free Pizza Helped Make Planet Fitness The Fastest-Growing Gym Franchise In America

ALISON GRISWOLD STRATEGY  MAR. 17, 2014, 11:11 PM

Once a month, national gym chain Planet Fitness has a free pizza night.

So many members come in for these food-filled evenings that the health club franchise usually gives away 250,000 slices each time, for more than 3 million pieces a year. That’s probably not surprising when you consider that Planet Fitness recently hit 5 million members and is now the fastest-growing gym chain in the U.S., according to co-founder and chief executive Chris Rondeau. 
What’s taken the company, which began in 1992 as a small operation in Dover, N.H., to a nationally dominant chain? Rondeau says its all about targeting the right audience.

Most health clubs, Rondeau explains, cater to the roughly 15% of Americans who consider themselves fitness nuts and love to work out. Planet Fitness’s goal, on the other hand, is to attract the much larger percentage of people who want to be healthier but may only use the gym a few times a month.

“The rest of the industry is fighting over that 15%,” he says. “We’re going for the other 85%.”

To accomplish this, Planet Fitness has mixed fitness with fun through its monthly pizza nights and a bagel breakfast on the second Tuesday of the Month. Its facilities sport mostly bright yellow and purple equipment, with an emphasis on cardio and weight-lifting machines. To keep costs down, the company omits amenities offered by more upscale gyms, such as juice bars and personal trainers. Membership fees run as low as $10 per month (plus a $20 startup fee), and many locations are open 24/7.

Beyond being affordable, Planet Fitness has built its reputation on maintaining a non-competitive workout environment. If someone attempts to lift too many weights or seems to be grunting under the effort, staffers can set off a loud siren called the “lunk alarm.” On some occasions, particularly egregious lifting offenders have been asked to leave and then escorted out by police.

What’s more, Rondeau thinks the focus his company has on basic products like weight and cardio ends up being a strength, rather than a detractor. There’s always “a lot of fads” in fitness, he explains — aerobics, kickboxing, and lately, spinning — but the cardio and weight machines are the timeless essentials.

If further evidence is needed that Planet Fitness has a broad appeal, Rondeau points out that the gym’s 5 million members account for roughly 10% of the 50 million people in the U.S. who belong to a health club. The gym has more than 750 locations nationwide, with the heaviest concentrations in the Northeast, Texas, Florida, and the Carolinas.

At least right now, Rondeau isn’t planning any big changes in the model. He says the $10 price tag and the uncompetitive atmosphere are the two big reasons Planet Fitness has been able to differentiate its product. As he likes to put it, if all the other gyms are selling hamburgers, then Planet Fitness is offering pizza.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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