How Free Bagels and No Frills Made Planet Fitness King

Planet Fitness may be one of the strangest gym chains on earth. Decorated in purple-and-yellow, the gym stocks a plastic jug of free Tootsie Rolls and hosts free “bagel mornings” and “pizza nights” every month. To combat “gymtimidation,” trainers will sound a blaring siren if a member grunts or drops a weight, which they call a “lunk alarm.”

Yet the fitness giant, with its 7 million members, has quickly become one of America’s fastest-growing gym chains, doubling its number of franchises since 2012 and opening its 1,000th gym in D.C. this month. A stock-market debut later this year is expected to value the business at more than $2 billion.

While fitness trackers like the Fitbit and Apple Watch squabble over new users, America’s $33 billion fitness-club industry is looking more buff than ever. U.S. gym membership has climbed 5 percent since 2010, to an all-time high of 53 million members last year, industry data show. Analysts expect revenue will keep climbing 4 percent every year through 2020.

As one of the biggest beneficiaries of the country’s growing health craze, Planet Fitness seemed to tap a nerve among amateur exercisers with its $10-a-month rates and promise of a “Judgement Free Zone”: In financial filings, the gym says it offers “a welcoming, non-intimidating environment … where anyone – and we mean anyone – can feel they belong.”

But even pricier, swankier gyms are benefiting from a nationwide wave of adults spending more of their disposable income on slimming down. SoulCycle, the stationary-bike studio chain that charges about $34 for a 45-minute “spin session,” has hired bankers to help set up an initial public offering for later this year.

The chains have begun to trade on their prestige outside of the workout, with SoulCycle running a clothing line that sells $54 tank tops and $118 sweatpants. Equinox, the high-end New York gym chain, is planning to expand with a 300-room, $850 million “luxury lifestyle” hotel in downtown Los Angeles.

Even after decades of treadmill farms and workout videos, the fitness industry remains wide open. The country’s 50 biggest gym chains control only a third of the market, which includes more than 34,000 health clubs nationwide, according to the International Health, Racquet and Sportsclub Association. And the opportunity is huge: 80 percent of American adults aren’t members of any gym, the industry group said.

That’s largely because a staggering number of Americans are dangerously unhealthy. About 83 million Americans, or about 28 percent of the country, said they didn’t do a single physical activity last year — not even bowling, fast walking or stretching — the highest level of “totally sedentary” adults since 2007, a survey by the Physical Activity Council released in April said.

Planet Fitness started as a small fitness club in Dover, N.H., in 1992 and it started franchising a decade later, slashing membership prices to compete with bigger chains, and focusing on first-time gym-goers more than fitness geeks.

The chain is now largely owned by TSG Consumer Partners, the private-equity buyout giant that also holds big stakes in Vitaminwater, Pabst Blue Ribbon and cookie company Famous Amos.

Far from the amenity-rich offerings of traditional health clubs and the hardcore cult culture of CrossFit, Planet Fitness stuck out for being no-frills and cheap to run. The chain offers virtually no perks, like fitness classes or babysitting, and the franchises tend to open in the echoing hulks of closed big-box retailers, helping franchise owners save money on rent.

It’s also open to members at bargain-basement prices. The $10 monthly fee is far cheaper than the industry average of $46 a month, making it easy for gym hopefuls to join and remain a member — even if they end up mostly staying away. (Planet Fitness members have gained a reputation for showing colorful ways to use the machines.)

Planet Fitness’s stock-market debut, which the company expects will help it raise $100 million, is far from the only big deal in big-box fitness. Life Time Fitness, which pulled in about $1.3 billion in revenue last year at its 113 North American gyms, agreed in March to be bought by private-equity investors in one of the year’s biggest leveraged buyouts, a deal worth more than $4 billion.

The chains are benefiting from public marketing campaigns aimed at fighting obesity, growing consumer trends toward healthier food and the hype surrounding fitness trackers that offer calorie counts and by-the-numbers results.

But the big chains are increasingly facing resistance from the rise of small yoga studios and fitness boutiques, which can be opened for cheap in small spaces and often charge pricey rates from fitness-minded urbanites seeking the status of a unique workout.

One high-end yoga studio that opened earlier this year in San Francisco, Ritual, offers candlelit sessions to bass-heavy jams like Ginuwine’s “Pony,” and each class ends in a head massage. The 1,000-square-foot studio fits 16 sweating customers, co-owner Brittany Blum told the Associated Press, and even at $25 a session “it’s packed in there.”

Some big-box gyms have sought to model themselves after the underdog. Town Sports International Holdings, which runs city-specific fitness centers like the New York Sports Clubs, last year launched a class-based concept called BFX Studio (for “Boutique Fitness Experience”). Still, in February, the company said it was exploring a sale or other strategic alternatives.

Ultimately, Planet Fitness’s biggest draw may be its openness to a crowd the fitness world long lived without. The chain has been a sponsor of NBC’s weight-loss reality show, “The Biggest Loser,” for four years, and even served the series’s “approved snack,” Fit Popcorn, at its gyms during the premiere. “If you’re going to be bored in front of the TV,” a gym Facebook account once posted, “you might as well also be on a treadmill.”

Read the original article on The Washington Post.