Planet Fitness is still running in the corona-conomy — behold, the fruit fly strategy
Do you even lift?... Planet Fitness makes money from your ~$10/month gym membership, and from selling equipment to its franchisee-owned gyms — same idea as McDonald's franchise model, except PF sells purple ellipticals instead of McFlurry machines.
- Flex #1: While competitors like 24 Hour Fitness, Gold’s Gym, and Town Sports have filed for bankruptcy during the pandemic, Planet Fitness is in its own (non-bankrupt) orbit.
- Flex #2: PF stock is down less than 3% this year, despite the pandemic's crushing effect on all things public sweating-related. Town Sports plunged 93% before getting delisted.
Shoo fly... PF's monthly fees are generally small enough to live with, even if you're not using the membership. Like a fruit fly, they're annoying... but bearable. The fruit fly membership strategy: keep it cheap, but make it hard to get rid of. Even when PF gyms were closed, cancellations had to be in person or by letter.
- PF's best customers: Those who barely ever show up but keep paying.
- PF's second best customers: Those who didn't bother trying to cancel during lockdowns.
The 10-Q doesn't lie... That's the quarterly financial report public companies have to file with the SEC. While the fruit fly strategy may have helped pad third-quarter results, PF's overall sales still fell 37% — and equipment sales alone plunged 71%. Membership dropped from 15.5M people in March to 14M at the end of October. Even as gyms reopened, people probably got fed up with the brutal cancellation policy (fly = swatted).