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by ndirish1842
3232 days ago
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>It's why places like Planet Fitness are able to offer $10/month unlimited memberships. That model is far different though For each Planet Fitness, much of the cost is upfront. That is, they have to buy the property, renovate (or build), and then buy all the machines. Yes there are increased maintenance costs as more people join the gym, but cost per user should decrease with each additional membership. For MoviePass, for each user they have to pay for the price of each movie ticket they go to. Thus their costs increase proportionally to the number of subscribers. Unless each additional user they sign up goes to the movies less than the average MoviePass user, Cost per user doesn't decrease. |
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As said before, this is not remotely accurate. Firstly, nearly all of these franchises rent their building space. Secondly, as with any B&M business, fully loaded employee costs comprise a majority of operating expenses. Thirdly, gym equipment maintenance is a non-trivial ongoing factor. Certainly the initial equipment purchase is a bubble, but the idea that PF is only fiscally viable due to equipment longevity is specious at best.
You can see an estimate breakdown of PF expenses here: http://www.franchisedirect.com/fitnessfranchises/planet-fitn...
Note fitness equipment estimates range from $35,930 to $944,800; re-equip costs are estimated at $359,900 to $944,800. (that low estimate on re-equip may be a typo, it is likely re-equip costs are estimated in the same range)