Planet Fitness Franchise Disclosure Document Analysis

Mandatory Affiliate Purchases Create Substantial Cost and Rebate Exposure

Franchisees are required to purchase all fitness equipment exclusively from PF Equipment, a Planet Fitness affiliate, with no ability to seek competitive bids or alternative suppliers for this major cost category.

Source: p.34

High Combined Fee Burden Significantly Compresses Franchisee Operating Margins

The combined royalty, NAF, and local advertising fund obligations can reach 16% or more of EFT revenues, representing a substantial and largely fixed cost before rent, labor, or equipment expenses are considered.

Source: p.17

National Advertising Fund Governance Provides Franchisees No Spending Control

The 2% NAF fee is collected and spent entirely at Planet Fitness's discretion, with no independent audit obligation disclosed, no requirement to spend in proportion to contributions by market, and no franchisee advisory vote on expenditures.

Source: p.18