10q10k10q10k.net

What changed in Planet Fitness, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Planet Fitness, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+544 added−564 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-29)

Top changes in Planet Fitness, Inc.'s 2024 10-K

544 paragraphs added · 564 removed · 466 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

117 edited+9 added−33 removed32 unchanged
Biggest changeOur industry Due to our unique positioning to a broader demographic, we believe Planet Fitness has an addressable market that is significantly larger than the traditional health club industry, focused on occasional gym users and people over the age of 14 who do not belong to a gym.
Biggest changeIn certain international markets, we earn a commission on the sale of equipment by our required vendors to franchisee-owned clubs. 6 Table of Contents Our industry Due to our unique positioning which allows us to appeal to a broad population, inclusive of all fitness levels from beginners to athletes, we believe Planet Fitness has an addressable market that is significantly larger than the traditional health club industry.
We are committed to providing equitable, comprehensive and competitive pay and benefits. • We are committed to providing competitive pay that aligns with job responsibilities, experience, skills, and geographic location. • We have an annual corporate bonus plan and field bonus programs designed to align and reward team member performance with company performance. • We support financial well-being through our retirement savings plan and offer an employee stock purchase plan. • We provide a comprehensive employee assistance program to all team members. • We provide a free Black Card membership to all team members. • We support work life balance with our paid time off programs and hybrid work schedule. • We provide health insurance, telehealth, prescription drug benefits, dental insurance, vision insurance, life insurance, disability insurance, health and flexible spending accounts, paid parental leave, childcare reimbursement and wellness initiatives to eligible team members.
We are committed to providing equitable, comprehensive and competitive pay and benefits. • We are committed to providing competitive pay that aligns with job responsibilities, experience, skills, and geographic location. • We have an annual corporate bonus program designed to align and reward team member performance with company performance. • We support financial well-being through our retirement savings plan and offer an employee stock purchase plan. • We provide a comprehensive employee assistance program to all team members. • We provide a free Black Card membership to all team members. • We support work life balance with our paid time off programs and hybrid work schedule. • We provide health insurance, telehealth, prescription drug benefits, dental insurance, vision insurance, life insurance, disability insurance, health and flexible spending accounts, paid parental leave, childcare reimbursement and wellness initiatives to eligible team members.
These conversations are designed to bring feedback about aspects of the business that are important to our workforce to the forefront of management’s attention, and to increase direct engagement and trust at every level of the company. Feedback is carefully reviewed by our human resources teams and shared with our executive leadership team, including our interim CEO.
These conversations are designed to bring feedback about aspects of the business that are important to our workforce to the forefront of management’s attention, and to increase direct engagement and trust at every level of the company. Feedback is carefully reviewed by our human resources teams and shared with our executive leadership team, including our CEO.
To a great extent, we also compete with other industry participants, including: • other fitness centers; • recreational facilities established by non-profit organizations such as YMCAs and by businesses for their employees; • private studios and other boutique fitness offerings; • racquet, tennis, pickleball and other athletic clubs; • amenity and condominium/apartment clubs; • country clubs; • online personal training and fitness coaching; • providers of digital fitness content; • the home-use fitness equipment industry; • local tanning salons; and • businesses offering similar services . 11 Table o f Contents The health club industry is highly competitive and fragmented.
To a great extent, we also compete with other industry participants, including: • other fitness centers; • recreational facilities established by non-profit organizations such as YMCAs and by businesses for their employees; • private studios and other boutique fitness offerings; • racquet, tennis, pickleball and other athletic clubs; • amenity and condominium/apartment clubs; • country clubs; • online personal training and fitness coaching; • providers of digital fitness content; • the home-use fitness equipment industry; • local tanning salons; and • businesses offering similar services . 11 Table of Contents The health club industry is highly competitive and fragmented.
Site selection and approval Our stores are generally located in free-standing retail buildings or neighborhood shopping centers, and we consider locations in both high- and low-density markets. We seek out locations with (i) high visibility and accessibility, (ii) favorable traffic counts and patterns, (iii) availability of signage, (iv) ample parking or access to public transportation and (v) our targeted demographics.
Site selection and approval Our clubs are generally located in free-standing retail buildings or neighborhood shopping centers, and we consider locations in both high- and low-density markets. We seek out locations with (i) high visibility and accessibility, (ii) favorable traffic counts and patterns, (iii) availability of signage, (iv) ample parking or access to public transportation and (v) our targeted demographics.
We use third-party site analytics tools that provide us with extensive demographic data and analysis that we use to review new and existing sites and markets for our corporate-owned stores and franchisee-owned stores. We assess population density and drive time, current tenant mix, layout, potential competition and impact on existing Planet Fitness stores and comparative data based upon existing stores.
We use third-party site analytics tools that provide us with extensive demographic data and analysis that we use to review new and existing sites and markets for our corporate-owned clubs and franchisee-owned clubs. We assess population density and drive time, current tenant mix, layout, potential competition, impact on existing Planet Fitness clubs and comparative data based upon existing clubs.
Planet Fitness franchisees are not granted an exclusive area or territory under the franchise agreement. The franchise agreement requires that the franchisee operate the Planet Fitness store at a specific location and in compliance with our standard methods of operation, including providing the services, using the vendors and selling the merchandise that we require.
Planet Fitness franchisees are not granted an exclusive area or territory under the franchise agreement. The franchise agreement requires that the franchisee operate the Planet Fitness club at a specific location and in compliance with our standard methods of operation, including providing the services, using the vendors and selling the merchandise that we require.
In order to maintain a consistent experience across our store base, we stipulate specific pieces and quantities of cardio and strength-training equipment and work with franchisees to review and approve layouts and placement. Due to our scale, we are able to negotiate competitive pricing and secure extended warranties from our suppliers.
In order to maintain a consistent experience across our club base, we stipulate specific pieces and quantities of cardio and strength-training equipment and work with franchisees to review and approve layouts and placement. Due to our scale, we are able to negotiate competitive pricing and secure extended warranties from our suppliers.
For the past nine years, we have sponsored “Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest,” and have been the sole presenting sponsor of the Times Square New Year’s Eve celebration through the Times Square Alliance, allowing the brand to be featured prominently in TV broadcasts covering Times Square during the celebration.
For the past 10 years, we have sponsored “Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest,” and have been the sole presenting sponsor of the Times Square New Year’s Eve celebration through the Times Square Alliance, allowing the brand to be featured prominently in TV broadcasts covering Times Square during the celebration.
Our easy-to-operate model, strong store-level economics and brand strength have enabled us to attract a team of professional, successful franchisees from a variety of industries. We believe that our strategy to be predominantly franchisee-owned enables us to scale more rapidly than a predominantly company-owned strategy.
Our easy-to-operate model, strong club-level economics and brand strength have enabled us to attract a team of professional, successful franchisees from a variety of industries. We believe that our strategy to be predominantly franchisee-owned enables us to scale more rapidly than a predominantly company-owned strategy.
Each franchisee is responsible for selecting a site, but must obtain site approval from us. Design and construction Once we have approved a franchisee’s site selection, we assist and provide corporate approval in the design and layout of the store and track the franchisee’s progress from lease signing to grand opening.
Each franchisee is responsible for selecting a site, but must obtain site approval from us. Design and construction Once we have approved a franchisee’s site selection, we assist and provide corporate approval in the design and layout of the club and track the franchisee’s progress from lease signing to grand opening.
Our PF Black Card members also have the right to reciprocal use of all Planet Fitness stores, can bring a friend with them each time they work out, and have access to massage beds and chairs and tanning, among other benefits.
Our PF Black Card members also have the right to reciprocal use of all Planet Fitness clubs, can bring a friend with them each time they work out, and have access to massage beds and chairs and tanning, among other benefits.
We believe our tailored use of space is, at least in part, why we have not needed to impose time limits on our cardio machines. Part of our unique store experience is the diligence our members and employees have to maintain a clean and sanitized environment.
We believe our tailored use of space is, at least in part, why we have not needed to impose time limits on our cardio machines. Part of our unique club experience is the diligence our members and employees have to maintain a clean and sanitized environment.
Our growth strategies We believe there are significant opportunities to grow our brand awareness, increase our revenues and profitability and deliver shareholder value by executing on the following strategies: • Continue to grow our store base across a broad range of domestic and international markets.
Our growth strategies We believe there are significant opportunities to grow our brand awareness, increase our revenues and profitability and deliver shareholder value by executing on the following strategies: • Continue to grow our club base across a broad range of domestic and international markets.
The franchisee must sign a separate franchise agreement with us for each Planet Fitness store developed under an ADA and that franchise agreement governs the franchisee’s right to own and operate the Planet Fitness store. Franchise agreements For each franchised Planet Fitness store, we enter into a franchise agreement covering standard terms and conditions.
The franchisee must sign a separate franchise agreement with us for each Planet Fitness club developed under an ADA and that franchise agreement governs the franchisee’s right to own and operate the Planet Fitness club. Franchise agreements For each franchised Planet Fitness club, we enter into a franchise agreement covering standard terms and conditions.
If the franchisee meets those obligations and otherwise complies with the terms of the ADA, with a few limited exceptions, we agree not to, during the term of the ADA, operate or franchise new Planet Fitness stores in the designated geographic area.
If the franchisee meets those obligations and otherwise complies with the terms of the ADA, with a few limited exceptions, we agree not to, during the term of the ADA, operate or franchise new Planet Fitness clubs in the designated geographic area.
The number, size and strength of our competitors vary by region. Some of our competitors have an established presence in local markets or name recognition in their respective countries, and some are established in markets in which we have existing stores or intend to locate new stores.
The number, size and strength of our competitors vary by region. Some of our competitors have an established presence in local markets or name recognition in their respective countries, and some are established in markets in which we have existing clubs or intend to locate new clubs.
We register some of our copyrighted material and otherwise rely on common law protection of our copyrighted works. Such copyrighted materials are not material to our business. We also license some intellectual property from third parties for use in our stores, but such licenses are not material to our business.
We register some of our copyrighted material and otherwise rely on common law protection of our copyrighted works. Such copyrighted materials are not material to our business. We also license some intellectual property from third parties for use in our clubs, but such licenses are not material to our business.
We have a dedicated field support team of regional franchise operations managers and directors focused on ensuring that our franchisee-owned stores adhere to brand standards and providing ongoing assistance, training and coaching to all franchisees.
We have a dedicated field support team of regional franchise operations managers and directors focused on ensuring that our franchisee-owned clubs adhere to brand standards and providing ongoing assistance, training and coaching to all franchisees.
These computer systems include third-party hosted systems that support our franchise management, real estate, and construction processes, third-party hosted financial systems, third-party hosted data warehouses and business intelligence system to consolidate multiple data sources for reporting, advanced analysis, consumer insights and financial analysis and forecasting, a third-party hosted human resource management and payroll system, on premise telephony systems and a third-party hosted call center software solution to manage and track member-related requests.
These computer systems include third-party hosted systems that support our franchise management, real estate, and construction processes, third-party hosted financial systems, third-party hosted data warehouses and business intelligence system to consolidate multiple data sources for reporting, advanced analysis, consumer insights and financial analysis and forecasting, a third-party hosted human resource management and payroll system and a third-party hosted call center software solution to manage and track member-related requests.
We plan to continue to increase our strong brand awareness by leveraging significant marketing expenditures by our franchisees and us, which we believe will result in increased membership in new and existing stores and continue to attract high-quality franchisee partners.
We plan to continue to increase our strong brand awareness by leveraging significant marketing expenditures by our franchisees and us, which we believe will result in increased membership in new and existing clubs and continue to attract high-quality franchisee partners.
Strategy At Planet Fitness, we believe that an engaged, diverse, and inclusive culture is essential for the success of our business. To elevate our approach, we have implemented an overarching human capital management strategy, programming and initiatives.
Strategy At Planet Fitness, we believe that an engaged, welcoming, and inclusive culture is essential for the success of our business. To elevate our approach, we have implemented an overarching human capital management strategy, programming and initiatives.
Our stores provide a Judgement Free Zone where members can experience a non-intimidating and supportive environment. Our “come as you are” approach has fostered a strong sense of community among our members, allowing them not only to feel comfortable as they work toward their fitness goals but also to encourage others to do the same.
Our clubs provide a Judgement Free environment where members can experience a non-intimidating and supportive environment. Our “come as you are” approach has fostered a strong sense of community among our members, allowing them not only to feel comfortable as they work toward their fitness goals but also to encourage others to do the same.
The stores included in these business reviews represent those stores that voluntarily disclosed such information in response to our request, and we believe this information reflects a representative sample of franchisees based on the franchisee groups and geographic areas represented by these stores. Fitness equipment We provide our members with high-quality, Planet Fitness-branded fitness equipment from leading suppliers.
The clubs included in these business reviews represent those clubs that disclosed such information in response to our request, and we believe this information reflects a representative sample of franchisees based on the franchisee groups and geographic areas represented by these clubs. Fitness equipment We provide our members with high-quality, Planet Fitness-branded fitness equipment from leading suppliers.
Intellectual property We own many registered trademarks and service marks in the U.S. and in other countries, including “Planet Fitness,” “Judgement Free Zone,” “PE@PF,” “Lunk Alarm,” “Black Card,” “PF Black Card,” “No Gymtimidation,” “You Belong,” “The Judgement Free Generation,” “PF + ” and various other trademarks and trade dress.
Intellectual property We own many registered trademarks and service marks in the U.S. and in other countries, including “Planet Fitness,” “Judgement Free Zone,” “PE@PF,” “Lunk Alarm,” “Black Card,” “PF Black Card,” “No Gymtimidation,” “Grow Stronger Together,” “You Belong,” “The Judgement Free Generation,” “PF + ” and various other trademarks and trade dress.
We have developed a highly relatable and recognizable brand focused on providing our members with a judgement free environment. We do so through fun and memorable marketing campaigns and in-store signage.
We have developed a highly relatable and recognizable brand focused on providing our members with a judgement free environment. We do so through fun and memorable marketing campaigns and in-club signage.
Membership We make it simple for members to join, whether online, through our mobile application or in-store—no pushy sales tactics, no pressure and no complicated rate structures.
Membership We make it simple for members to join, whether online, through our mobile application or in-club—no pushy sales tactics, no pressure and no complicated rate structures.
Employee Engagement and Workplace Culture At Planet Fitness, we believe that culture is the core of our business. To ensure that our culture is rooted in ongoing engagement with our team members, our Chief People Officer hosts ongoing small informal meetings with team members across all departments.
Employee Engagement and Workplace Culture At Planet Fitness, we believe that culture is the core of our business. To ensure that our culture is rooted in ongoing engagement with our team members, our Chief Corporate Affairs Officer hosts ongoing small informal meetings with team members across all departments.
We generally perform a site visit and operations review on each franchise store within 30 to 60 days of opening, and each franchisee ownership group is visited at least once per year in multiple locations for a business review with their operations team thereafter. We also use mystery shoppers to perform anonymous reviews of franchisee-owned stores.
We generally perform a site visit and operations review on each franchise club within 30 to 60 days of opening, and each franchisee ownership group is visited at least once per year in multiple locations for a business review with their operations team thereafter. We also use mystery shoppers to perform anonymous reviews of franchisee-owned clubs.
Our real estate team meets regularly to review sites for future development and follows a detailed review process to ensure each site aligns with our strategic growth objectives and critical success factors. We help franchisees select sites and develop facilities in these stores that conform to the physical specifications for a Planet Fitness store.
Our real estate team meets regularly to review sites for future development and follows a detailed review process to ensure each site aligns with our strategic growth objectives and critical success factors. We help franchisees select sites and develop facilities in these clubs that conform to the physical specifications for a Planet Fitness club.
Planet Fitness brand elements are required to be incorporated into every new store in accordance with our Design Control Documents (“DCD”) and supporting design brand guidelines, and we strive for a consistent appearance across all of our stores, emphasizing clean, attractive facilities, including full-size locker rooms, and modern equipment.
Planet Fitness brand elements are required to be incorporated into every new club in accordance with our Design Control Documents (“DCD”) and supporting design brand guidelines, and we strive for a consistent appearance across all of our clubs, emphasizing clean, attractive facilities, including full-size locker rooms, and modern equipment.
We see Planet Fitness as a community gathering place, and the heart of our marketing strategy is to reinforce the “feel good” mental and physical benefits of exercise and create a welcoming in-store environment for our members. 10 Table o f Contents Marketing spending National advertising . We support our franchisees both at a national and local level.
We see Planet Fitness as a community gathering place, and the heart of our marketing strategy is to reinforce the “feel good” mental and physical benefits of exercise and create a welcoming in-club environment for our members. 10 Table of Contents Marketing spending National advertising . We support our franchisees both at a national and local level.
Ongoing programs at Planet Fitness include professional level workshops led by our training department, in addition to LeadDev, our competency-based leadership development program for the accelerated development of our highest potential team members. In 2023, there were over 35,000 active users of the PF University platform across our franchise community.
Ongoing programs at Planet Fitness include professional level workshops led by our training department, in addition to LeadDev, our competency-based leadership development program for the accelerated development of our highest potential team members. In 2024, there were over 39,000 active users of the PF University platform across our franchise community.
Our streamlined model features relatively fixed labor costs, minimal inventory, automatic billing and limited cash transactions. The attractiveness of our franchise model is further evidenced by the fact that our franchisees re-invest their capital into the brand, with substantially all of our new stores in 2023 opened by our existing franchisee base.
Our streamlined model features relatively fixed labor costs, minimal inventory, automatic billing and limited cash transactions. The attractiveness of our franchise model is further evidenced by the fact that our franchisees re-invest their capital into the brand, with substantially all of our new clubs in 2024 opened by our existing franchisee base.
In addition, we estimate that our U.S. national advertising fund, funded by franchisees and us, together with our requirement that franchisees spend 7% of their monthly membership dues on local advertising, enabled us and our franchisees to spend over $300 million combined in 2023. • Exceptional value proposition that appeals to a broad member demographic .
In addition, we estimate that our U.S. national advertising fund, funded by franchisees and us, together with our requirement that franchisees spend 7% of their monthly membership dues on local advertising, enabled us and our franchisees to spend over $330 million combined in 2024. • Exceptional value proposition that appeals to a broad member demographic .
Under our current franchise agreement, franchisees as well as our corporate-owned stores are also required to spend 7% of their monthly membership dues on local advertising. We expect both our NAF and local advertising spending to grow as our membership grows. • Continue to expand royalties from increases in average royalty rate and new franchisees.
Under our current franchise agreement, franchisees as well as our corporate-owned clubs are also required to spend 7% of their monthly membership dues on local advertising. We expect both our NAFs and local advertising spending to grow as our membership grows. • Continue to expand royalties from increases in average royalty rate and new franchisees.
Our low monthly membership dues combined with our non-intimidating and welcoming environment, enable us to attract a broad member demographic based on age, household income, gender and ethnicity. Our member base is approximately 50% female and our members come from households of all income levels.
Our low monthly membership dues combined with our non-intimidating and welcoming environment, enable us to attract a broad member demographic based on age, household income, gender and ethnicity. Our member base is approximately 51% male and our members come from households of all income levels.
We have not historically owned or entered into leases for Planet Fitness franchisee-owned stores and historically have generally not guaranteed franchisees’ lease agreements, although we have done so in a few certain instances. Franchising Franchising strategy We rely heavily on our franchising strategy to develop new Planet Fitness stores, leveraging the ownership of entrepreneurs with specific local market expertise.
We have not historically owned or entered into leases for Planet Fitness franchisee-owned clubs and historically have generally not guaranteed franchisees’ lease agreements, although we have done so in a few certain instances. 8 Table of Contents Franchising Franchising strategy We rely heavily on our franchising strategy to develop new Planet Fitness clubs, leveraging the ownership of entrepreneurs with specific local market expertise.
We offer over 85 courses through Planet Fitness University, our online training development program available to all team members. In order to support franchisees’ growing leadership teams, we offer an operations leadership training to assist with 12 Table o f Contents the onboarding and training process for multi-unit leaders and executives who are new to the brand.
We offer over 60 courses through Planet Fitness University, our online training development program available to all team members. In order to support franchisees’ growing leadership teams, we offer an operations leadership training to assist with 12 Table of Contents the onboarding and training process for multi-unit leaders and executives who are new to the brand.
Because our stores are successful across a wide range of geographies and demographics with varying market characteristics, we believe that our high level of brand awareness and low per capita penetration creates a significant opportunity to open new Planet Fitness stores both in the U.S. and internationally.
Because our clubs are successful across a wide range of 5 Table of Contents geographies and demographics with varying market characteristics, we believe that our high level of brand awareness and low per capita penetration creates a significant opportunity to open new Planet Fitness clubs both in the U.S. and internationally.
We manage the NAF and Canadian advertising fund for franchisees and corporate-owned stores, with the goals of generating national awareness through advertising and media partnerships, developing and maintaining creative assets to support local sale periods throughout the year, and building and supporting the Planet Fitness community via digital, social media and public relations.
We manage the NAF and CAF for franchisees and corporate-owned clubs, with the goals of generating national awareness through advertising and media partnerships, developing and maintaining creative assets to support local sale periods throughout the year, and building and supporting the Planet Fitness community via digital, social media and public relations.
This competition is more significant internationally, where we have a limited number of stores and limited brand recognition.
This competition is more significant internationally, where we have a limited number of clubs and limited brand recognition.
Our competition continues to increase as we continue to expand into new markets and add stores in existing markets.
Our competition continues to increase as we continue to expand into new markets and add clubs in existing markets.
Based on strategic analysis regarding the immediate and future needs of our business and our team members, we identified three critical areas of focus: Employee Engagement and Workplace Culture, Employee Health and Safety, and Diversity, Equity and Inclusion (“DE&I”). We believe that focus and investment in these three areas will, in turn, generate long-term value.
Based on strategic analysis regarding the immediate and future needs of our business and our team members, we identified three critical areas of focus: Employee Engagement and Workplace Culture, Employee Health and Safety, and Inclusion and Belonging. We believe that focus and investment in these three areas will, in turn, generate long-term value.
Our members generally pay the following amounts (or an equivalent amount in the store’s local currency): • monthly membership dues starting at only $10 for our standard Classic Card membership, or $24.99 for PF Black Card membership; • current standard annual fees of $49; and • enrollment fees of $0 to $59.
Our members generally pay the following amounts (or an equivalent amount in the club’s local currency): • monthly membership dues starting at only $15 to new members for our standard Classic Card membership, or $24.99 for PF Black Card membership; • current standard annual fees of $49; and • enrollment fees of $0 to $59.
Based on our internal and third-party analyses, we believe we have the potential to grow our store base to over 5,000 stores in the U.S. alone. • Drive revenue growth and system-wide same store sales .
Based on our internal and third-party analyses, we believe we have the potential to grow our club base to over 5,000 clubs in the U.S. alone. • Drive revenue growth and system-wide same club sales .
Area development agreements An ADA specifies the number of Planet Fitness stores to be developed by the franchisee in a designated geographic area and requires the franchisee to meet certain scheduled deadlines for the development and opening of each Planet Fitness store authorized by the ADA.
Area development agreements An ADA specifies the number of Planet Fitness clubs to be developed by the franchisee in a designated geographic area and requires the franchisee to meet certain scheduled deadlines for the development and opening of each Planet Fitness club authorized by the ADA.
We expect our equipment sales to grow as our U.S. franchisees open new stores and replace used equipment as required every five to nine years. In addition, we believe that regularly refreshing equipment helps our franchise stores maintain a consistent, high-quality fitness experience and is one of the contributing factors that drives new member growth.
We expect our equipment sales to grow as our franchisees open new clubs and replace their equipment as required every five to nine years. In addition, we believe that regularly refreshing equipment helps our franchise clubs maintain a consistent, high-quality fitness experience and is one of the contributing factors that drives new member growth.
We have a significant history of positive system-wide same store sales growth and expect to achieve system-wide same store sales growth primarily by: • Attracting new members to existing Planet Fitness stores.
We have a significant history of positive system-wide same club sales growth and expect to achieve system-wide same club sales growth primarily by: • Attracting new members to existing Planet Fitness clubs.
Based on franchisee business reviews and management estimates, we believe that, on average, franchisee stores achieve four-wall EBITDA margins in line with these corporate-owned store four-wall EBITDA margins.
Based on franchisee business reviews and management estimates, we believe that, on average, franchisee clubs achieve four-wall adjusted EBITDA margins in line with these corporate-owned clubs.
As the population in the markets where we operate continue to focus on health and wellness, we believe we are well-positioned to capture a disproportionate share of these populations given our affordability and appeal to first-time and occasional gym users. Over the years, we have seen our membership penetration rates of each successive generation increase compared to the previous generations.
As the population in the markets where we operate continue to focus on health and wellness, we believe we are well-positioned to capture a disproportionate share of these populations given our affordability and appeal to all fitness levels. Over the years, we have seen our membership penetration rates of each successive generation increase compared to the previous generations.
We utilize electronic funds transfer (“EFT”) as our primary method of collecting monthly dues and annual membership fees. Over 86% of membership fee payments to our corporate-owned and franchise stores are collected via Automated Clearing House (“ACH”) direct debit.
We utilize electronic funds transfer (“EFT”) as our primary method of collecting monthly dues and annual membership fees. Approximately 82% of membership fee payments to our corporate-owned and franchise clubs are collected via Automated Clearing House (“ACH”) direct debit.
Compliance with brand standards—Regional Franchise Operations Our corporate-owned stores provide incentive compensation for store staff to successfully drive key business metrics in the service, cleanliness, personnel and financial categories, and we encourage our franchisees to follow our lead.
Compliance with brand standards—Regional Franchise Operations Our corporate-owned clubs provide competitive compensation for club staff to successfully drive key business metrics in the service, cleanliness, personnel and financial categories, and we encourage our franchisees to follow our lead.
Our bright, clean stores are typically 20,000 square feet, with a large selection of high-quality, purple and yellow Planet Fitness-branded cardio, circuit- and weight-training equipment and friendly staff trainers who offer unlimited free fitness instruction to all our members in small groups through our PE@PF program.
Our bright, clean clubs are typically 20,000 square feet, with a large selection of high-quality, purple and yellow Planet Fitness-branded cardio, circuit- and strength-training equipment and friendly staff trainers who offer unlimited free fitness instruction to all our members in small groups.
PF Black Card benefits extend beyond our store as well, with exclusive specials and enhanced discount offers from select third-party retail partners. While some of our memberships require a cancellation fee, we offer, and require our franchisees to offer, a non-committal membership option. As of December 31, 2023, we had approximately 18.7 million members.
PF Black Card benefits extend beyond our club as well, with exclusive specials and enhanced discount offers from select third-party retail partners in our PF Perks program. While some of our memberships require a cancellation fee, we offer, and require our franchisees to offer, a non-committal membership option. As of December 31, 2024, we had approximately 19.7 million members.
We made the following updates to our typical franchise agreements effective January 1, 2024 for franchisees who selected to be part of our new growth model (the “franchise growth model”) that was announced at the end of 2023: • franchise agreements have up to a 12-year term with no initial fee instead of a 10-year term and $20,000 initial fee; • store remodels are required in year 12, in conjunction with a $20,000 fee for the renewal of the franchise agreement, instead of in year 10; • fitness equipment is required to be replaced every five to nine years instead of every five to seven years, based on store volume; • join fees are a percentage-based fee for all joins instead of $5 on digital out of club joins.
We made the following updates to our typical franchise agreements effective January 1, 2024 as part of our updated growth model (the “franchise growth model”): • franchise agreements have up to a 12-year term with no initial fee instead of a 10-year term and $20,000 initial fee; • club remodels are required in year 12, in conjunction with a $20,000 fee for the renewal of the franchise agreement, instead of in year 10; • fitness equipment is required to be replaced every five to nine years instead of every five to seven years, based on club volume; • join fees are a percentage-based fee for all joins instead of $5 on digital out of club joins.
Approximately 20% of our stores are located in areas that the US government deems “low income,” providing access to improve health and wellness in underserved communities.
Approximately 20% of our clubs are located in areas that the U.S. government deems “low income,” providing access to improve health and wellness in underserved communities.
The SEC maintains an Internet site (http://www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 16 Table o f Contents
The SEC maintains an Internet site (http://www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 14 Table of Contents
We regularly add and improve the content available on Planet Fitness University as a no-cost service to help enhance training programs for franchisees. Additional training opportunities offered to our franchisees include new owner orientation, operations training and workshops held at Planet Fitness headquarters (when circumstances permit), in stores and through regularly held webinars and seminars. Operational support and communication .
We regularly add and improve the content available on Planet Fitness University as a no-cost service to help enhance training programs for franchisees. Additional training opportunities offered to our franchisees include new owner orientation, operations training and workshops held at our New Hampshire Club Support Center, in clubs and through regularly held webinars and seminars. Operational support and communication .
The map below shows our franchisee-owned stores by location, and the accompanying table shows our corporate-owned stores by location. 7 Table o f Contents Franchisee-owned store count by location Store model Our store model is designed to generate attractive four-wall EBITDA margins, strong free cash flow and high returns on invested capital for both our corporate-owned and franchisee-owned stores.
The map below shows our franchisee-owned clubs by location, and the accompanying table shows our corporate-owned clubs by location. 7 Table of Contents Franchisee-owned club count by location Club model Our club model is designed to generate attractive four-wall Adjusted EBITDA margins, strong free cash flow and high returns on invested capital for both our corporate-owned and franchisee-owned clubs.
And, for approximately $24.99 per month, our PF Black Card members have access to all of our stores system-wide and can bring a guest on each visit, which provides an additional opportunity to attract new members.
And, for generally $24.99 per month, our PF Black Card members have access to all of our clubs system-wide and can bring a guest on each visit, which provides an additional opportunity to attract new 4 Table of Contents members.
In 2023, we recorded revenues of $1.1 billion and had system-wide sales of $4.5 billion, which we define as monthly dues and annual fees billed by us and our franchisees. We ended the year with approximately 18.7 million members and 2,575 stores in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia.
In 2024, we recorded revenues of $1.2 billion and had system-wide sales of $4.8 billion, which we define as monthly dues and annual fees billed by us and our franchisees. We ended the year with approximately 19.7 million members and 2,722 clubs in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico, Australia and Spain.
As new franchisees enter our system and, generally, as current franchisees open new stores or renew their existing franchise agreements at the current royalty rate, our average system-wide royalty rate will increase. In 2023, our average royalty rate was 6.5% compared to 6.1% in 2019. • Grow sales from fitness equipment and related services.
As new franchisees enter our system and, generally, as current franchisees open new clubs or renew their existing franchise agreements at the current royalty rate, our average system-wide royalty rate will increase. In 2024, our average royalty rate was 6.6% compared to 6.3% in 2020. • Grow sales from fitness equipment and related services.
The typical franchise agreement has a 10-year term. Additionally, franchisees must purchase equipment from us (or our required vendors in the case of our franchisees located in certain international markets) and generally replace the fitness equipment in their stores and refurbish and remodel their stores periodically.
The current franchise agreement stipulates a 12-year term. Additionally, franchisees must purchase equipment from us (or our required vendors in the case of our franchisees located in certain international markets) and generally replace the fitness equipment in their clubs and refurbish and remodel their clubs periodically.
Based on franchisee business reviews and management estimates, we believe that, on average, franchisee stores achieve four-wall EBITDA margins in line with these corporate-owned store four-wall EBITDA margins.
Based on franchisee business reviews and management estimates, we believe that, on average, franchisee clubs achieve four-wall adjusted EBITDA margins in line with these corporate-owned club Royalty adjusted four-wall EBITDA margins.
In addition to our in store experience, we also provide more than 500 workouts to both existing members and prospects via the free Planet Fitness mobile application, featuring differentiated content geared toward engaging with our community outside of our four walls and providing more ways to connect to our target audience – first time and casual gym users. • Increasing mix of PF Black Card memberships by enhancing value and member experience .
In addition to our in club experience, we also provide more than 500 workouts to both existing members and prospects via the free Planet Fitness mobile application, featuring differentiated content geared toward engaging with our community inside and outside of our four walls. • Increasing mix of PF Black Card memberships by enhancing value and member experience .
Belonging to a Planet Fitness store has perks whether members select the standard Classic Card membership or the premium PF Black Card membership. Every member can take advantage of specials and discount offers from third-party retail partners and gets free, unlimited fitness instruction included in their monthly membership fee.
Belonging to a Planet Fitness club has perks whether members select the standard Classic Card membership or the premium PF Black Card membership. Every member can take advantage of PF Perks and gets free, unlimited fitness instruction included in their monthly membership fee.
Our back-office computer systems are comprised of a variety of technologies designed to assist in the management and analysis of our revenues, costs and key operational metrics as well as support the daily operations of our headquarters.
We believe these systems are scalable to support our growth plans. Our back-office computer systems are comprised of a variety of technologies designed to assist in the management and analysis of our revenues, costs and key operational metrics as well as support the daily operations of our Corporate Support Centers.
Planet Fitness is the home of the Judgement Free Zone, a place where people of all fitness levels can feel comfortable working out at their own pace, feel supported in their efforts and not feel intimidated by pushy salespeople or other members who may ruin their fitness experience.
Planet Fitness is the home of the Judgement Free Zone, a place where people of all fitness levels can feel comfortable working out at their own pace, feel supported in their efforts and not feel intimidated.
Both our standard Classic Card and PF Black Card memberships are priced significantly below the 2022 industry average of $59 per month, the latest available estimate from our industry’s trade association, the International Health, Racquet & Sportsclub Association’s (“IHRSA”).
Both our standard Classic Card and PF Black Card memberships are priced significantly below the 2023 industry average of $65 per month, the latest available estimate from our industry’s trade association, the Health & Fitness Association, formerly known as the International Health, Racquet & Sportsclub Association.
As of December 31, 2023, our agency structure consists of one national and two local agencies allowing for integration and coordination of National Advertising Fund (“NAF”) and local advertising spending.
As of December 31, 2024, our U.S. agency structure consists of one national and two local agencies allowing for integration and coordination of our NAFs and local advertising spending.
We encourage this upgrade by continuing to enhance the value of our PF Black Card benefits through the ability to use any Planet Fitness location, free guest privileges, access premium content on the Planet Fitness mobile app and additional in-store amenities, such as tanning equipment, hydro-massage beds, and affinity partnerships for discounts and promotions.
We encourage this upgrade by continuing to enhance the value of our PF Black Card benefits through the ability to use any Planet Fitness location, free guest privileges, access premium content and PF Perks on the Planet Fitness mobile app and additional in-club amenities, such as tanning equipment, water massage beds, massage chairs and hot/cold recovery lounges.
As of December 31, 2023, approximately 98% of all franchise stores were owned and operated by a franchisee group that owned at least three stores, and while our largest franchisee owned 194 stores, only 44% of our franchisee groups own ten or more stores.
As of December 31, 2024, approximately 99% of all franchise clubs were owned and operated by a franchisee group that owned at least three clubs, and while our largest franchisee owned 196 clubs, only 44% of our franchisee groups own 10 or more clubs.
Our stores We had 2,575 stores system-wide as of December 31, 2023, of which 2,319 were franchised and 256 were corporate-owned, located in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia.
Our clubs We had 2,722 clubs system-wide as of December 31, 2024, of which 2,445 were franchised and 277 were corporate-owned, located in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico, Australia and Spain.
Our broad appeal and ability to attract occasional and first-time gym users enable us to continue to target a large segment of the population in a variety of markets and geographies. • Highly attractive franchise system built for growth .
Our broad appeal and variety of equipment within our clubs enable us to continue to target a large segment of the population in a variety of markets and geographies. • Highly attractive franchise system built for growth .
We sell equipment purchased from third-party equipment manufacturers to franchisee-owned stores in the U.S, Canada, and Mexico. We also have one approved supplier of tanning beds, one approved supplier of massage beds and chairs, and various approved suppliers of non-fitness equipment and miscellaneous items. These vendors arrange for delivery of products and services directly to franchisee-owned stores.
We sell equipment purchased from third-party equipment manufacturers to franchisee-owned clubs in the U.S, Canada, and Mexico. We work with vendors who supply the following: tanning beds, massage beds and chairs, and various other non-fitness equipment and miscellaneous items. These vendors arrange for delivery of products and services directly to franchisee-owned clubs.
While our current franchise agreement stipulates a monthly royalty rate of 7% of monthly dues and annual membership fees, as of December 31, 2023, only 55% of our stores are paying royalties at the current franchise agreement rate, primarily due to lower rates in historical 6 Table o f Contents agreements.
While our current franchise agreement for the U.S. stipulates a monthly royalty rate of 7% of monthly dues and annual membership fees, as of December 31, 2024, only 57% of our clubs are paying royalties at the current franchise agreement rate, primarily due to lower rates in historical agreements.
Government regulation We and our franchisees are subject to various federal, international, state, provincial and local laws and regulations affecting our business.
Government regulation We and our franchisees are subject to various federal, international, state, provincial and local laws and regulations affecting our business. For more information about government regulation and laws applicable to our business, see “Item 1A.
Our websites, mobile, and digital platforms are hosted by third parties, and we also rely on third-party vendors for related functions such as our system for managing digital content (text, images and videos), sending email and mobile messaging, and processing member digital identities. We believe these systems are scalable to support our growth plans.
Our websites and mobile and digital platforms can also process new club memberships and are hosted by third party vendors. We rely on third-party vendors for related functions such as our system for managing digital content (text, images and videos), sending email and mobile messaging, and processing member digital identities.
Our competitive strengths We attribute our success to the following strengths: • Market leader with differentiated member experience, nationally recognized brand and scale advantage . We are one of the largest and fastest-growing franchisors and operators of fitness centers in the world by number of members and locations, with a highly recognized national brand. • Differentiated member experience.
We are one of the largest and fastest-growing franchisors and operators of fitness centers in the world by number of members and locations, with a highly recognized national brand. • Differentiated member experience.

… 79 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

181 edited+34 added−5 removed197 unchanged
Biggest changeSummary of Risk Factors Risks related to our business and industry • Our success depends substantially on the value of our brand, which could be materially and adversely affected by the high level of competition in the health and fitness industry, our ability to anticipate and satisfy consumer preferences, shifting views of health and fitness and our ability to obtain and retain high-profile strategic partnership arrangements. • Our and our franchisees’ stores may be unable to attract and retain members, which would materially and adversely affect our business, results of operations and financial condition. • Our intellectual property rights, including trademarks, trade names, copyrights and trade dress, may be infringed, misappropriated or challenged by others. • We and our franchisees rely heavily on information systems, including the use of email marketing, mobile application and social media, and any material failure, interruption or weakness may prevent us from effectively operating our business, damage our reputation or subject us to potential fines or other penalties. • If we fail to properly maintain the confidentiality and integrity of our data, including member credit card, debit card, bank account information and other personally identifiable information, our reputation and business could be materially and adversely affected. • The occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of confidential information, and/or damage to our employee and business relationships and reputation, all of which could harm our brand and our business. • If we fail to successfully implement our growth strategy, which includes new store development by existing and new franchisees, our ability to increase our revenues and operating profits could be adversely affected. • Our planned growth and changes in the industry could place strains on our management, employees, information systems and internal controls, which may adversely impact our business. • If we cannot retain our key employees and hire additional highly qualified employees, we may not be able to successfully manage our businesses and pursue our strategic objectives. • Economic, political and other risks associated with our international operations could adversely affect our profitability and international growth prospects. • Our financial results are affected by the operating and financial results of, our relationships with and actions taken by our franchisees. • We are subject to a variety of additional risks associated with our franchisees, such as potential franchisee bankruptcies, franchisee changes in control, franchisee turnover, rising costs related to construction of new stores and maintenance of existing stores, including rising costs due to inflation and supply chain disruptions, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition. • We and our franchisees could be subject to claims related to health and safety risks to members that arise while at both our corporate-owned and franchise stores. • Our business is subject to various laws and regulations including, among others, those governing indoor tanning, electronic funds transfer, ACH, credit card, debit card, digital payment options, auto-renewal contracts, membership cancellation rights and consumer protection more generally, and changes in such laws and regulations, failure to comply with existing or future laws and regulations or failure to adjust to consumer sentiment regarding these matters, could harm our reputation and adversely affect our business. • Our failure to address evolving environmental, social and governance (“ESG”) issues may have an adverse effect on our business, financial condition and results of operations. • We are subject to risks associated with leasing property subject to long-term non-cancelable leases. • If we and our franchisees are unable to identify and secure suitable sites for new franchise stores, our revenue growth rate and profits may be negatively impacted. • Opening new stores in close proximity may negatively impact our existing stores’ revenues and profitability. 17 Table o f Contents • Our franchisees may incur rising costs related to construction of new stores and maintenance of existing stores, including rising costs due to inflation, supply chain disruptions and other market conditions, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition. • Our dependence on a limited number of suppliers for equipment and certain products and services could result in disruptions to our business and could adversely affect our revenues and gross profit.
Biggest changeSummary of Risk Factors Risks related to our business and industry • Our success depends substantially on the value of our brand, which could be materially and adversely affected by the high level of competition in the health and fitness industry, our ability to anticipate and satisfy consumer preferences, shifting views of health and fitness and our ability to obtain and retain high-profile strategic partnership arrangements. • Our and our franchisees’ clubs may be unable to attract and retain members, which would materially and adversely affect our business, results of operations and financial condition. • Our intellectual property rights may be infringed, misappropriated or challenged by others. • We and our franchisees rely heavily on information systems and any material failure, interruption or weakness may prevent us from effectively operating our business, damage our reputation or subject us to potential fines or other penalties. • If we fail to properly maintain the confidentiality and integrity of our data, our reputation and business could be materially and adversely affected. • The occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of confidential information, and/or damage to our employee and business relationships and reputation, all of which could harm our brand and our business. • If we fail to successfully implement our growth strategy, our ability to increase our revenues and operating profits could be adversely affected. • Our planned growth and changes in the industry could place strains on our management, employees, information systems and internal controls, which may adversely impact our business. • If we cannot retain our key employees and hire additional highly qualified employees, we may not be able to successfully manage our businesses and pursue our strategic objectives. • Economic, political and other risks associated with our international operations could adversely affect our profitability and international growth prospects. • Our financial results are affected by the operating and financial results of, our relationships with and actions taken by our franchisees.
These risks include, among others: • inadequate brand infrastructure within foreign countries to support our international activities; • inconsistent regulation or sudden policy changes by foreign agencies or governments; • maintaining non-U.S. employees; • the collection of royalties from foreign franchisees; • difficulty of enforcing contractual obligations of foreign franchisees; • increased costs in maintaining international franchise and marketing efforts; • franchisees’ difficulty in raising adequate capital; • problems entering international markets with well established competitors and different cultural bases and consumer preferences; • political and economic instability of foreign markets, including as a result of war or conflict; • compliance with laws and regulations applicable to our international operations, such as the Foreign Corrupt Practices Act and regulations promulgated by the Office of Foreign Asset Control; • fluctuations in foreign currency exchange rates; and • operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations relating to contract and intellectual property rights.
These risks include, among others: • inadequate brand infrastructure within foreign countries to support our international activities; • inconsistent regulation or sudden policy changes by U.S. and foreign agencies or governments; • maintaining non-U.S. employees; • the collection of royalties from foreign franchisees; • difficulty of enforcing contractual obligations of foreign franchisees; • increased costs in maintaining international franchise and marketing efforts; • franchisees’ difficulty in raising adequate capital; • problems entering international markets with well established competitors and different cultural bases and consumer preferences; • political and economic instability of foreign markets, including as a result of war or conflict; • compliance with laws and regulations applicable to our international operations, such as the Foreign Corrupt Practices Act and regulations promulgated by the Office of Foreign Asset Control; • fluctuations in foreign currency exchange rates; and • operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations relating to contract and intellectual property rights.
This level of debt could have significant consequences on our future operations, including: • resulting in an event of default if our subsidiaries fail to comply with the financial and other restrictive covenants contained in debt agreements, which event of default could result in all of our subsidiaries’ debt becoming immediately due and payable; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • limiting the Company’s flexibility in planning for, or reacting to, and increasing its vulnerability to, changes in our business, the industry in which it operates and the general economy; • placing us at a competitive disadvantage compared to our competitors that are less leveraged; • subjecting us to the risk of increased sensitivity to interest rate increases on indebtedness with respect to the Variable Funding Notes or the refinancing of the Securitized Senior Notes or the 2022 Notes; and • increasing the possibility that we may be unable to generate cash sufficient for the Master Issuer to pay, when due, interest on and principal of the Securitized Senior Notes.
This level of debt could have significant consequences on our future operations, including: • resulting in an event of default if our subsidiaries fail to comply with the financial and other restrictive covenants contained in debt agreements, which event of default could result in all of our subsidiaries’ debt becoming immediately due and payable; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • limiting the Company’s flexibility in planning for, or reacting to, and increasing its vulnerability to, changes in our business, the industry in which it operates and the general economy; • placing us at a competitive disadvantage compared to our competitors that are less leveraged; • subjecting us to the risk of increased sensitivity to interest rate increases on indebtedness with respect to the Variable Funding Notes or the refinancing of the outstanding Securitized Senior Notes or the 2022 Variable Funding Notes; and • increasing the possibility that we may be unable to generate cash sufficient for the Master Issuer to pay, when due, interest on and principal of the Securitized Senior Notes.
The Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain a stated debt service coverage ratio, the sum of system-wide sales being below certain levels on certain measurement dates, certain manager termination events (including in certain cases a change of control of Planet Fitness Holdings, LLC), an event of default and the failure to repay or refinance the Securitized Senior Notes on the applicable anticipated repayment date.
The outstanding Securitized Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain a stated debt service coverage ratio, the sum of system-wide sales being below certain levels on certain measurement dates, certain manager termination events (including in certain cases a change of control of Planet Fitness Holdings, LLC), an event of default and the failure to repay or refinance the Securitized Senior Notes on the applicable anticipated repayment date.
Some states have passed or have considered legislation requiring gyms and health clubs to offer a prepaid or cash membership option at all times, provide notice to members in advance of automatic renewals, make online cancellation available to some or all members in a particular jurisdiction, and/or limit the duration for which gym memberships can auto-renew through EFT payments, if at all.
Some states and provinces have passed or have considered legislation requiring gyms and health clubs to offer a prepaid or cash membership option at all times, provide notice to members in advance of automatic renewals, make online cancellation available to some or all members in a particular jurisdiction, and/or limit the duration for which gym memberships can auto-renew through EFT payments, if at all.
Policing unauthorized use and other violations of our intellectual property rights is difficult, and the steps we take may not prevent misappropriation, infringement, dilution or other violations of our intellectual property, especially internationally where foreign nations may not have laws to protect against “squatting,” or in “first-to-file” nations where trademark rights can be obtained despite a third-party’s prior use of our intellectual property.
Policing unauthorized use and other violations of our intellectual property rights is difficult and costly, and the steps we take may not prevent misappropriation, infringement, dilution or other violations of our intellectual property, especially internationally where foreign nations may not have laws to protect against “squatting,” or in “first-to-file” nations where trademark rights can be obtained despite a third-party’s prior use of our intellectual property.
The Securitized Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Securitized Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective and certain judgments.
The outstanding Securitized Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the outstanding Securitized Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective and certain judgments.
Additionally, the handling of personally identifiable information by our, or our franchisees’, businesses are regulated at the federal, state and international levels, as well as by certain industry groups, such as the Payment Card Industry Security Standards Council, National Automated Clearing House Association, Canadian Payments Association and individual credit card issuers.
Additionally, the handling of personally identifiable information by our, or our franchisees’, businesses are regulated at the federal, state and international levels, as well as by certain industry groups, such as the Payment Card Industry Security Standards Council, National Automated Clearing House Association (“NACHA”), Canadian Payments Association and individual credit card issuers.
We expect that the payments we will be required to make will be substantial and may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreements and we will not be reimbursed for any payments made pursuant to the tax receivable agreements in the event that any tax benefits are disallowed. • Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations. • Our ability to pay taxes and expenses, including payments under the tax receivable agreements, may be limited by our structure. • In certain circumstances, Pla-Fit Holdings will be required to make distributions to us and the Continuing LLC Owners, and the distributions that Pla-Fit Holdings will be required to make may be substantial.
We expect that the payments we will be required to make will be substantial and may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreements and we will not be reimbursed for any payments made pursuant to the tax receivable agreements in the event that any tax benefits are disallowed. • Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations. • Our ability to pay taxes and expenses may be limited by our structure. • In certain circumstances, Pla-Fit Holdings will be required to make distributions to us and the Continuing LLC Owners, and the distributions that Pla-Fit Holdings will be required to make may be substantial.
The ability of these third-party suppliers to successfully provide reliable and high-quality services is subject to technical and operational uncertainties that are beyond our control, including, for our overseas suppliers, vessel availability and port delays or congestion.
The ability of these third-party suppliers to successfully provide reliable and high-quality services is subject to technical and operational uncertainties that are beyond our control, including, for our overseas suppliers, tariffs, vessel availability and port delays or congestion.
Such platforms depend on the internet, internet providers and cloud computing providers to deliver ongoing services, the interruption of which could disrupt our operations. Disruption to those platforms and/or services could impact the products and services we offer to our members and affect our membership sales and retention.
Such platforms depend on the internet, internet providers and cloud computing providers to deliver ongoing services, the interruption of which could disrupt our operations. Disruption to those platforms and/or services could adversely impact the products and services we offer to our members and affect our membership sales and retention.
Our and our franchisees’ operations and properties are subject to extensive U.S., Canadian, Panamanian, Mexican and Australian, federal, international, state, provincial and local laws and regulations, including those relating to environmental, building and zoning requirements.
Our and our franchisees’ operations and properties are subject to extensive U.S., Canadian, Panamanian, Mexican, Australian, and Spanish federal, international, state, provincial and local laws and regulations, including those relating to environmental, building and zoning requirements.
Increased regulatory and legal requirements concerning ESG issues may also lead to increased operational costs. Further, as a global company, we recognize physical climate-related risks wherever our business is conducted. Our stores may be located in areas that are subject to natural disasters such as severe weather and other potential risks and costs associated with the impacts of climate change.
Increased regulatory and legal requirements concerning ESG issues may also lead to increased operational costs. Further, as a global company, we recognize physical climate-related risks wherever our business is conducted. Our clubs may be located in areas that are subject to natural disasters such as severe weather and other potential risks and costs associated with the impacts of climate change.
Consumer demand for our stores and our brand’s value could diminish significantly if any such incidents or other matters erode consumer confidence in us, our stores or our reputation as a health and fitness brand, which would likely result in fewer memberships sold or renewed and, ultimately, lower royalty revenue, which in turn could materially and adversely affect our results of operations and financial condition.
Consumer demand for our clubs and our brand’s value could diminish significantly if any such incidents or other matters erode consumer confidence in us, our clubs or our reputation as a health and fitness brand, which would likely result in fewer memberships sold or renewed and, ultimately, lower royalty revenue, which in turn could materially and adversely affect our results of operations and financial condition.
Furthermore, we may from time to time negotiate terms of our franchise agreements with individual franchisees or groups of franchisees (e.g., a franchisee association). We have also recently implemented a new growth model which, among other things. provides for extended franchise agreement terms, up to twelve years, and provides more flexibility on the timing of re-equipment obligations.
Furthermore, we may from time to time negotiate terms of our franchise agreements with individual franchisees or groups of franchisees (e.g., a franchisee association). We have also recently implemented our new franchise growth model which, among other things, provides for extended franchise agreement terms, up to 12 years, and provides more flexibility on the timing of re-equipment obligations.
We may need to expand our information systems to support newer and emerging forms of payment methods, which may be time-consuming and expensive, and may not realize a return on our investment. We are subject to risks associated with leasing property subject to long-term non-cancelable leases. All but one of our corporate-owned stores are located on leased premises.
We may need to expand our information systems to support newer and emerging forms of payment methods, which may be time-consuming and expensive, and may not realize a return on our investment. We are subject to risks associated with leasing property subject to long-term non-cancelable leases. All but one of our corporate-owned clubs are located on leased premises.
Competitors, including companies that are larger and have greater resources than us, may compete with us to attract members in our markets. Non-profit organizations in our markets may be able to obtain land and construct stores at a lower cost and collect membership dues and fees without paying taxes, thereby allowing them to charge lower prices.
Competitors, including companies that are larger and have greater resources than us, may compete with us to attract members in our markets. Non-profit organizations in our markets may be able to obtain land and construct clubs at a lower cost and collect membership dues and fees without paying taxes, thereby allowing them to charge lower prices.
As a result, those new stores may be less successful than stores in our existing markets. Further, effectively managing growth can be challenging, particularly as we continue to expand into new international markets where we must balance the need for flexibility and a degree of autonomy for local management against the need for consistency with our mission and standards.
As a result, those new clubs may be less successful than clubs in our existing markets. Further, effectively managing growth can be challenging, particularly as we continue to expand into new international markets where we must balance the need for flexibility and a degree of autonomy for local management against the need for consistency with our mission and standards.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting in future periods, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could be negatively affected and we could become subject to investigations by the NYSE, on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting in future periods, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could be negatively affected and we could become subject to investigations by 37 Table of Contents the NYSE, on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
On December 3, 2019, the Master Issuer issued $550 million Series 2019-1 3.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2019 Notes”) in an offering exempt from registration under the Securities Act of 1933, as amended. The 2019 Notes were issued under the 2018 Indenture and a related supplemental indenture dated December 3, 2019 (together, the “Indenture”).
On December 3, 2019, the Master Issuer issued $550 million Series 2019-1 3.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2019 Notes”) in an offering exempt from registration under the Securities Act of 1933, as amended. The 2019 Notes were issued under the 2018 Indenture and a related supplemental indenture dated December 3, 2019 (together, the “2019 Indenture”).
Our and our franchisees’ operations depend upon our ability, and the ability of our franchisees and third-party service providers (as well as their third-party service providers), to protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, viruses, denial-of-service attacks and other disruptions.
Our and our franchisees’ operations depend upon our ability, and the ability of our franchisees and third-party service providers (as well as their third-party service providers), to protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security incidents, viruses, denial-of-service attacks and other disruptions.
If franchisees do not successfully operate stores in a manner consistent with required standards and comply with local laws and regulations, franchise fees and royalties paid to us may be adversely affected, and our brand image and reputation could be harmed, which in turn could materially and adversely affect our results of operations and financial condition.
If franchisees do not successfully operate clubs in a manner consistent with required standards and comply with local laws and regulations, franchise fees and royalties paid to us may be adversely affected, and our brand image and reputation could be harmed, which in turn could materially and adversely affect our results of operations and financial condition.
These changes may impose greater costs and regulatory burdens on franchising and negatively affect our ability to sell new franchises, which in turn may materially and adversely affect our results of operations and financial condition. Franchise agreements and franchisee relationships. Our franchisees develop and operate their stores under terms set forth in our ADAs and franchise agreements, respectively.
These changes may impose greater costs and regulatory burdens on franchising and negatively affect our ability to sell new franchises, which in turn may materially and adversely affect our results of operations and financial condition. Franchise agreements and franchisee relationships. Our franchisees develop and operate their clubs under terms set forth in our ADAs and franchise agreements, respectively.
In addition, if a franchisee is unwilling or unable to acquire the necessary financing to invest in the maintenance and upkeep of its stores, including periodic remodeling and replacement of equipment, the quality of its stores could deteriorate, which may have a negative impact on our brand image and our ability to attract and maintain members, which in turn may have a negative impact on our revenues.
In addition, if a franchisee is unwilling or unable to acquire the necessary financing to invest in the maintenance and upkeep of its clubs, including periodic remodeling and replacement of equipment, the quality of its clubs could deteriorate, which may have a negative impact on our brand image and our ability to attract and maintain members, which in turn may have a negative impact on our revenues.
In addition, if a franchisee is unwilling or unable to acquire the necessary financing to invest in the maintenance and upkeep of its stores, including periodic remodeling and replacement of equipment, the quality of its stores could deteriorate, which may have a negative impact on our brand image and our ability to attract and maintain members, which in turn may have a negative impact on our revenues.
In addition, if a franchisee is unwilling or unable to acquire the necessary financing to invest in the maintenance and upkeep of its clubs, including periodic remodeling and replacement of equipment, the quality of its clubs could deteriorate, which may have a negative impact on our brand image and our ability to attract and maintain members, which in turn may have a negative impact on our revenues.
We are subject to similar franchise sales laws in Mexico and Australia, and may become subject to similar laws in other countries in which we may offer franchises in the future.
We are subject to similar franchise sales laws in Mexico, Australia, and Spain and may become subject to similar laws in other countries in which we may offer franchises in the future.
Based upon our experience with hiring employees and operating corporate-owned stores, we believe a significant number of our and our franchisees’ employees are paid at rates related to the U.S. federal or state minimum wage, and past increases in the U.S. federal and/or state minimum wage have increased labor costs, as would future increases.
Based upon our experience with hiring employees and operating corporate-owned clubs, we believe a significant number of our and our franchisees’ employees are paid at rates related to the U.S. federal or state minimum wage, and past increases in the U.S. federal and/or state minimum wage have increased labor costs, as would future increases.
Our success is dependent in large part upon our ability to maintain and enhance the value of our brand, our store members’ connection to our brand and a positive relationship with our franchisees. Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation.
Our success is dependent in large part upon our ability to maintain and enhance the value of our brand, our club members’ connection to our brand and a positive relationship with our franchisees. Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation.
In any transfer situation, the transferee may not be able to perform its obligations under its franchise agreements and successfully operate the store. In such a case the performance and quality of service of the store could be adversely affected, which could also reduce memberships and negatively affect our royalty revenues and brand image.
In any transfer situation, the transferee may not be able to perform its obligations under its franchise agreements and successfully operate the club. In such a case, the performance and quality of service of the club could be adversely affected, which could also reduce memberships and negatively affect our royalty revenues and brand image.
In connection with such Series 2022-1 Issuance, the Master Issuer repaid the outstanding principal amount (and all accrued and unpaid interest thereon) of the Class A-2-I Notes, and the Master Issuer also entered into a new revolving financing facility that allows for the issuance of up to $75 million in Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes”, and such Class A-1 note facilities in effect from time to time, the “Variable Funding Notes”) and certain Letters of Credit, which were undrawn as of December 31, 2023.
In connection with such Series 2022-1 Issuance, the Master Issuer repaid the outstanding principal amount (and all accrued and unpaid interest thereon) of the 2018 Class A-2-I Notes, and the Master Issuer also entered into a new revolving financing facility that allows for the issuance of up to $75 million in Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes”, and such Class A-1 note facilities in effect from time to time, the “Variable Funding Notes”) and certain Letters of Credit, which were undrawn as of December 31, 2024.
Members may cancel their memberships at any time after giving proper notification, in accordance with the terms of their membership agreement, subject to an initial minimum term applicable to certain memberships. We may also cancel or suspend memberships if a member fails to provide payment for an extended period of time.
Members may cancel their memberships at any time after giving proper notification, in accordance with the terms of their membership agreement and, for certain memberships, subject to an initial minimum term. We may also cancel or suspend memberships if a member fails to provide payment for an extended period of time.
A substantial portion of our revenues come from royalties, which are generally based on a percentage of gross monthly membership dues and annual fees at our franchise stores or, in certain cases, a sliding scale based on gross monthly membership dues, other fees and commissions generated from activities associated with our franchisees, and equipment sales to our franchisees.
A substantial portion of our revenues come from royalties, which are generally based on a percentage of gross monthly membership dues and annual fees at our franchise clubs or, in certain cases, a sliding scale based on gross monthly membership dues, other fees and commissions generated from activities associated with our franchisees, and equipment sales to our franchisees.
In addition, if we fail to negotiate renewals, either on commercially acceptable terms or at all, as each of our leases expire we could be forced to close stores in desirable locations. We depend on cash flows from operations to pay our lease expenses and to fulfill our other cash needs.
In addition, if we fail to negotiate renewals, either on commercially acceptable terms or at all, as each of our leases expire we could be forced to close clubs in desirable locations. We depend on cash flows from operations to pay our lease expenses and to fulfill our other cash needs.
These provisions include: • the division of our board of directors into three classes and the election of each class for three-year terms; • advance notice requirements for stockholder proposals and director nominations; • the ability of the board of directors to fill a vacancy created by the expansion of the board of directors; 37 Table o f Contents • the ability of our board of directors to issue new series of, and designate the terms of, preferred stock, without stockholder approval, which could be used to, among other things, institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors; • limitations on the ability of stockholders to call special meetings and to take action by written consent; and • the required approval of holders of at least 75% of the voting power of the outstanding shares of our capital stock to adopt, amend or repeal certain provisions of our certificate of incorporation and bylaws or remove directors for cause.
These provisions include: • the division of our board of directors into three classes and the election of each class for three-year terms; • advance notice requirements for stockholder proposals and director nominations; • the ability of the board of directors to fill a vacancy created by the expansion of the board of directors; • the ability of our board of directors to issue new series of, and designate the terms of, preferred stock, without stockholder approval, which could be used to, among other things, institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors; • limitations on the ability of stockholders to call special meetings and to take action by written consent; and • the required approval of holders of at least 75% of the voting power of the outstanding shares of our capital stock to adopt, amend or repeal certain provisions of our certificate of incorporation and bylaws or remove directors for cause.
Our failure to add a significant number of new stores would adversely affect our ability to increase our revenues and operating income and could materially and adversely affect our business, results of operations and financial condition. Our planned growth could place strains on our management, employees, information systems and internal controls, which may adversely impact our business.
Our failure to add a significant number of new clubs would adversely affect our ability to increase our revenues and operating income and could materially and adversely affect our business, results of operations and financial condition. Our planned growth could place strains on our management, employees, information systems and internal controls, which may adversely impact our business.
We and our franchisees could be subject to claims related to health and safety risks to members that arise while at both our corporate-owned and franchise stores. Use of our and our franchisees’ stores poses some potential health and safety risks to members or guests through physical exertion and use of our services and facilities, including exercise and tanning equipment.
We and our franchisees could be subject to claims related to health and safety risks to members that arise while at both our corporate-owned and franchise clubs. Use of our and our franchisees’ clubs poses some potential health and safety risks to members or guests through physical exertion and use of our services and facilities, including exercise and tanning equipment.
Additional sites that we lease are likely to be subject to similar long-term, non-terminable leases. If we close a store, we nonetheless may be obligated to perform our monetary obligations under the applicable lease, including, among other things, payment of the base rent for the balance of the lease term.
Additional sites that we lease are likely to be subject to similar long-term, non-terminable leases. If we close a club, we nonetheless may be obligated to perform our monetary obligations under the applicable lease, including, among other things, payment of the base rent for the balance of the lease term.
Our franchisees may incur rising costs related to construction of new stores and maintenance of existing stores, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition. Our stores require significant upfront and ongoing investment, including periodic remodeling and equipment replacement.
Our franchisees may incur rising costs related to construction of new clubs and maintenance of existing clubs, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition. Our clubs require significant upfront and ongoing investment, including periodic remodeling and equipment replacement.
Such option, however, is contingent on the franchisee’s execution of the then-current form franchise agreement (which may include increased royalty payments, advertising fees and other fees and costs), the satisfaction of certain conditions (including re-equipment and remodeling of the store and other requirements) and the payment of a successor fee.
Such option, however, is contingent on the franchisee’s execution of the then-current form franchise agreement (which may include increased royalty payments, advertising fees and other fees and costs), the satisfaction of certain conditions (including re-equipment and remodeling of the club and other requirements) and the payment of a successor fee.
The CCPA, including as amended, broadly defines personal information, provides an expansive meaning to activity considered to be a sale of personal information, and gives California residents expanded privacy rights and protections, including the right to opt out of the sale of personal information or the sharing of personal information for purposes of cross-context behavioral advertising.
The CCPA, as amended, broadly defines personal information, provides an expansive meaning to activity considered to be a sale or sharing of personal information, and gives California consumers expanded privacy rights and protections, including the right to opt out of the sale of personal information or the sharing of personal information for purposes of cross-context behavioral advertising.
These unrelated risks could materially and adversely affect a franchisee that is an operating company and its ability to service its members and maintain store operations while making royalty payments, which in turn may materially and adversely affect our business and operating results. Franchise agreement termination; nonrenewal.
These unrelated risks could materially and adversely affect a franchisee that is an operating company and its ability to service its members and maintain club operations while making royalty payments, which in turn may materially and adversely affect our business and operating results. Franchise agreement termination; nonrenewal.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expected timing and amount of the release of any tax valuation allowances; • tax effects of stock-based compensation; • costs related to intercompany restructurings; • changes in tax laws, regulations or interpretations thereof; • lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates; or • higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expected timing and amount of the release of any tax valuation allowances; • tax effects of stock-based compensation; 35 Table of Contents • costs related to intercompany restructurings; • changes in tax laws, regulations or interpretations thereof; • lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates; or • higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
Risks related to our Class A common stock • Provisions of our corporate governance documents could make an acquisition of our Company more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders. • Our organizational structure, including the tax receivable agreements, confers certain benefits upon the TRA Holders and the Continuing LLC Owners that do not benefit Class A common stockholders to the same extent as it will benefit the TRA Holders and the Continuing LLC Owners. • If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price. • Our certificate of incorporation designates courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • Our stock price could be extremely volatile, and, as a result, stockholders may not be able to resell shares at or above their purchase price. • Because we do not currently pay any cash dividends on our Class A common stock, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it. • We cannot guarantee that our share repurchase program will be fully consummated or that such program will enhance the long-term value of our share price. • Financial forecasting may differ materially from actual results. 18 Table o f Contents Risks related to our business and industry Our success depends substantially on the value of our brand.
Risks related to our Class A common stock • Provisions of our corporate governance documents could make an acquisition of our Company more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders. • Our organizational structure, including the tax receivable agreements, confers certain benefits upon the TRA Holders and the Continuing LLC Owners that do not benefit Class A common stockholders to the same extent as it will benefit the TRA Holders and the Continuing LLC Owners. • If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price. • Our certificate of incorporation designates courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • Our stock price could be extremely volatile, and, as a result, stockholders may not be able to resell shares at or above their purchase price. • Because we do not currently pay any cash dividends on our Class A common stock, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it. • We cannot guarantee that our share repurchase program will be fully consummated or that such program will enhance the long-term value of our share price. 16 Table of Contents Risks related to our business and industry Our success depends substantially on the value of our brand.
To the extent that we are unable to implement effective marketing and promotional programs and foster recognition and affinity for our brand in new domestic and international markets, our and our franchisees’ new stores may not perform as expected and our growth may be significantly delayed or impaired.
To the extent that we are unable to implement effective marketing and promotional programs and foster recognition and affinity for our brand in new domestic and international markets, our and our franchisees’ new clubs may not perform as expected and our growth may be significantly delayed or impaired.
Although such growth was temporarily slowed by measures put in place in response to the COVID-19 pandemic and the resulting temporary closure of stores and accompanying decrease in membership, we have resumed our expansion strategy, in line with prior plans for growth.
Although such growth was temporarily slowed by measures put in place in response to the COVID-19 pandemic and the resulting temporary closure of clubs and accompanying decrease in membership, we have resumed our expansion strategy, in line with prior plans for growth.
Although the tanning industry is regulated by U.S. federal and state, and international government agencies, negative publicity regarding the potentially harmful health effects of the tanning services we offer at our stores could lead to additional legislation or further regulation of the industry.
Although the tanning industry is regulated by U.S. federal and state, and international government agencies, negative publicity regarding the potentially harmful health effects of the tanning services we offer at our clubs could lead to additional legislation or further regulation of the industry.
If we and our franchisees are unable to identify and secure suitable sites for new franchise stores, our revenue growth rate and profits may be negatively impacted. To successfully expand our business, we and our franchisees must identify and secure sites for new franchise stores and, to a lesser extent, new corporate-owned stores that meet our established criteria.
If we and our franchisees are unable to identify and secure suitable sites for new franchise clubs, our revenue growth rate and profits may be negatively impacted. To successfully expand our business, we and our franchisees must identify and secure sites for new franchise clubs and, to a lesser extent, new corporate-owned clubs that meet our established criteria.
The success of our business depends on our and our franchisees’ ability to attract and retain members. Our and our franchisees’ marketing efforts may not be successful in attracting members to stores, and membership levels may materially decline over time, especially at stores in operation for an extended period of time.
The success of our business depends on our and our franchisees’ ability to attract and retain members. Our and our franchisees’ marketing efforts may not be successful in attracting members to clubs, and membership levels may materially decline over time, especially at clubs in operation for an extended period of time.
In addition, we experience attrition and must continually engage existing members and attract new members in order to maintain membership levels. A portion of our member base does not regularly use our stores and may be more likely to cancel their memberships.
In addition, we experience attrition and must continually engage existing members and attract new members in order to maintain membership levels. A portion of our member base does not regularly use our clubs and may be more likely to cancel their memberships.
These processes are time-consuming and expensive, increase management responsibilities and divert management attention, and we may not realize a return on our investment in these processes. In addition, we believe the culture we foster at our and our franchisees’ stores is an important contributor to our success.
These processes are time-consuming and expensive, increase management responsibilities and divert management attention, and we may not realize a return on our investment in these processes. In addition, we believe the culture we foster at our and our franchisees’ clubs is an important contributor to our success.
A principal component of our marketing program has been to partner with high-profile marketing partners, such as our sponsorship of ABC’s “Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest 2024,” to help us extend the reach of our brand.
A principal component of our marketing program has been to partner with high-profile marketing partners, such as our sponsorship of ABC’s “Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest 2025,” to help us extend the reach of our brand.
Our franchisees are contractually obligated to operate their stores in accordance with the operational, safety and health standards set forth in our agreements with them, including adherence to applicable laws and regulations. However, franchisees are independent third parties and their actions are outside of our control.
Our franchisees are contractually obligated to operate their clubs in accordance with the operational, safety and health standards set forth in our agreements with them, including adherence to applicable laws and regulations. However, franchisees are independent third parties and their actions are outside of our control.
If a new operator is not found or approved by us, or the new operator is not as successful in operating the store as the then - deceased franchisee or franchisee principal, the gross EFT of the store may be affected and could adversely affect our business and operating results. Franchisee insurance.
If a new operator is not found or approved by us, or the new operator is not as successful in operating the club as the then - deceased franchisee or franchisee principal, the gross EFT of the club may be affected and could adversely affect our business and operating results. Franchisee insurance.
These and other such negative factors could reduce franchise stores’ revenues, impact payments to us from franchisees under the franchise agreements and could have a material adverse effect on our revenues, which in turn may materially and adversely affect our business.
These and other such negative factors could reduce franchise clubs’ revenues, impact payments to us from franchisees under the franchise agreements and could have a material adverse effect on our revenues, which in turn may materially and adversely affect our business.
In order to increase membership levels, we may from time to time offer promotions or lower monthly dues or annual fees. If we and our franchisees are not successful in optimizing price or in adding new memberships in new and existing stores, growth in monthly membership dues or annual fees may suffer.
In order to increase membership levels, we may from time to time offer promotions or lower monthly dues or annual fees. If we and our franchisees are not successful in optimizing price or in adding new memberships in new and existing clubs, growth in monthly membership dues or annual fees may suffer.
If our franchisees (or prospective franchisees) are not able to obtain financing at commercially reasonable rates, or at all, they may be unwilling or unable to invest in the development of new stores, and our future growth could be adversely affected.
If our franchisees (or prospective franchisees) are not able to obtain financing at commercially reasonable rates, or at all, they may be unwilling or unable to invest in the development of new clubs, and our future growth could be adversely affected.
In addition, our ability and the ability of our franchisees to successfully open and operate new stores in new or existing markets may be adversely affected by a lack of awareness or acceptance of our brand, as well as a lack of existing marketing efforts and operational execution in these new markets.
In addition, our ability and the ability of our franchisees to successfully open and operate new clubs in new or existing markets may be adversely affected by a lack of awareness or acceptance of our brand, as well as a lack of existing marketing efforts and operational execution in these new markets.
Franchisee changes in control. Our franchises are operated by independent business owners. Although we have the right to approve franchise owners, and any transferee owners, we cannot predict in advance whether a particular franchise owner will be successful.
Franchisee changes in control. Our franchises are operated by third-party independent business owners. Although we have the right to approve franchise owners, and any transferee owners, we cannot predict in advance whether a particular franchise owner will be successful.
In addition, we and our franchisees are subject to various regulatory efforts to enforce employment laws, such as efforts to classify franchisors as the co-employers of their franchisees’ employees and legislation to categorize individual franchised businesses as large employers for the purposes of various employment benefits.
In addition, we and our franchisees are subject to various regulatory efforts, such as efforts to classify franchisors as the co-employers of their franchisees’ employees and legislation to categorize individual franchised businesses as large employers for the purposes of various employment benefits.
Although our business model does not place an emphasis on indoor tanning, the vast majority of our corporate-owned stores and franchise stores offer indoor tanning services. We offer tanning services as one of many amenities available to our PF Black Card members.
Although our business model does not place an emphasis on indoor tanning, the vast majority of our corporate-owned clubs and franchise clubs offer indoor tanning services. We offer tanning services as one of many amenities available to our PF Black Card members.
Despite the changes under our new growth model, our franchisees may not realize the benefits of such flexibility if costs continue to rise. If our franchisees’ costs are greater than expected, franchisees may need to outperform their operational plan to achieve their targeted return.
Despite the changes under our franchise growth model, our franchisees may not realize the benefits of such flexibility if costs continue to rise. If our franchisees’ costs are greater than expected, franchisees may need to outperform their operational plan to achieve their targeted return.
The significant increase in remote working, particularly for an extended period of time, could exacerbate certain risks to our business, including an increased risk of cyber incidents and improper collection and dissemination of personal or confidential information. Use of email marketing, mobile application and social media may adversely impact our reputation or subject us to fines or other penalties.
The significant increase in remote working, particularly for an extended period of time, could exacerbate certain risks to our business, including an increased risk of cyber incidents and improper collection and dissemination of personal or confidential information. 19 Table of Contents Use of email marketing, mobile application and social media may adversely impact our reputation or subject us to fines or other penalties.
If an individual franchise owner is unable to successfully establish, manage and operate the store, the performance and quality of service of the store could be adversely affected, which could reduce memberships and negatively affect our royalty revenues and brand image.
If an individual franchise owner is unable to successfully establish, manage and operate the club, the performance and quality of service of the club could be adversely affected, which could reduce memberships and negatively affect our royalty revenues and brand image.
Although we believe that our FDDs, franchise sales practices and franchise activities comply with such franchise sales laws and franchise relationship laws, our non-compliance could result in liability to franchisees and regulatory authorities (as described above), inability to enforce our franchise agreements and a reduction in our anticipated royalty revenue, which in turn may materially and adversely affect our business and results of operations.
Although we believe that our FDDs, franchise sales practices and franchise activities comply with such franchise sales laws and franchise 26 Table of Contents relationship laws, our non-compliance could result in liability to franchisees and regulatory authorities (as described above), inability to enforce our franchise agreements and a reduction in our anticipated royalty revenue, which in turn may materially and adversely affect our business and results of operations.
Our ability to efficiently and effectively manage our franchisee and corporate-owned stores depends significantly on the reliability and capacity of these systems, and any potential failure of these third parties to provide quality uninterrupted service is beyond our control.
Our ability to efficiently and effectively manage our franchisee and corporate-owned clubs depends significantly on the reliability and capacity of these systems, and any potential failure of these third parties to provide quality uninterrupted service is beyond our control.
Changes in consumer behavior following a security breach or perceived security breach, act of cyber terrorism or sabotage, vandalism or theft, computer viruses, loss or corruption of data or programming or human error or other similar event affecting a competitor, large retailer or financial institution may materially and adversely affect our business, which in turn may materially and adversely affect our results of operations and financial condition.
Changes in consumer behavior following a security breach or perceived security breach, act of cyber terrorism or sabotage, vandalism or theft, computer viruses, loss or corruption of data or 20 Table of Contents programming or human error or other similar event affecting a competitor, large retailer or financial institution may materially and adversely affect our business, which in turn may materially and adversely affect our results of operations and financial condition.
The leases for corporate-owned stores generally have initial terms of 10 years and typically provide for two renewal options in five-year increments as well as for rent escalations. Moreover, although historically we have generally not guaranteed franchisees’ lease agreements, we have done so in a few certain instances and may do so from time to time.
The leases for corporate-owned clubs generally have initial terms of 10 to 12 years and typically provide for two renewal options in five-year increments as well as for rent escalations. Moreover, although historically we have generally not guaranteed franchisees’ lease agreements, we have done so in a few certain instances and may do so from time to time.
Negative economic conditions, including recession, public health emergencies, inflation, increased unemployment levels and the effect of decreased consumer confidence or changes in consumer behavior, could materially harm our franchisees’ financial condition, which would cause our royalty and other revenues to decline and materially and adversely affect our results of operations and financial condition as a result.
Negative economic conditions, including recession, public health emergencies, inflation, increased unemployment levels and the effect of decreased consumer confidence or changes in consumer behavior, could materially harm our franchisees’ financial condition, which would cause our royalty and other revenues to decline and materially and adversely affect our results of operations and financial condition as 23 Table of Contents a result.
The FTC and other authorities are likewise imposing standards for the collection, use, dissemination and security of personal information under consumer protection laws. Additionally, in the United States, laws in all 50 states require businesses to provide notice to individuals whose personally identifiable information has been disclosed as a result of a data breach.
The FTC and other authorities are likewise imposing standards for the collection, use, dissemination and security of personal information under consumer protection laws. Additionally, in the United States, laws in 27 Table of Contents all 50 states require businesses to provide notice to individuals whose personally identifiable information has been disclosed as a result of a data breach.
In addition, in the event of the death or permanent disability of a franchisee (if a natural person) or a principal of a franchisee entity, the executors and representatives of the franchisee are required to appoint an operator approved by us to manage the store.
In addition, in the event of the death or permanent disability of a franchisee (if a natural person) or a principal of a franchisee entity, the executors and representatives of the franchisee are required to appoint an operator approved by us to manage the club.
Opening new stores in close proximity to existing stores may attract some memberships away from those existing stores, which may lead to diminished revenues and profitability for us and our franchisees rather than increased market share.
Opening new clubs in close proximity to existing clubs may attract some memberships away from those existing clubs, which may lead to diminished revenues and profitability for us and our franchisees rather than increased market share.
In the event that an acceptable operator is not found, the franchisee would be in default under its franchise agreement and, among other things, the franchise agreement and the franchisee’s right to operate the store under the franchise agreement could be terminated.
In the event that an acceptable operator is not found, the franchisee would be in default under its franchise agreement and, among other things, the franchise agreement and the franchisee’s right to operate the club under the franchise agreement could be terminated.
Additionally, if our or our franchisees’ analysis of the suitability of a store site is incorrect, we or our franchisees may not be able to recover the capital investment in developing and building the new store.
Additionally, if our or our franchisees’ analysis of the suitability of a club site is incorrect, we or our franchisees may not be able to recover the capital investment in developing and building the new club.
In particular, because the majority of our new store development is funded by franchisee investment, our growth strategy is dependent on our franchisees’ (or prospective franchisees’) ability to access funds to finance such development.
In particular, because the majority of our new club development is funded by franchisee investment, our growth strategy is dependent on our franchisees’ (or prospective franchisees’) ability to access funds to finance such development.
In addition, we cannot be certain that our franchisees will have the business acumen or financial resources necessary to operate successful franchises in their approved locations, and certain state franchise laws limit our ability to terminate or not renew these franchise agreements. Our franchisees own, operate and oversee the daily operations of their stores.
In addition, we cannot be certain that our franchisees will have the business acumen or financial resources necessary to operate successful franchises in their approved locations, and certain franchise laws limit our ability to terminate or not renew these franchise agreements. Our franchisees own, operate and oversee the daily operations of their clubs.
We and our franchisees increasingly rely on information systems, including point-of-sale processing systems in our stores and other information systems managed by third parties, to interact with our franchisees and members and collect, maintain, store and transmit member information, billing information and other personally identifiable information, including for the operation of stores, collection of cash, legal and regulatory compliance, management of our supply chain, accounting, staffing, payment of obligations, ACH transactions, credit and debit card transactions and other processes and procedures.
We and our franchisees increasingly rely on information systems, including point-of-sale processing systems in our clubs and other information systems managed by third parties, to interact with our franchisees and members and collect, maintain, club and transmit member information, billing information and other personally identifiable information, including for the operation of clubs, collection of cash, legal and regulatory compliance, management of our supply chain, accounting, staffing, payment of obligations, ACH transactions, credit and debit card transactions and other processes and procedures.
The failure of these systems to operate effectively, stemming from maintenance problems, upgrading or transitioning to new platforms, expanding our systems as we grow, a breach in security or other unanticipated problems could result in interruptions to or delays in our business and member services and reduce efficiency in our operations.
The failure of these systems to operate effectively, stemming from maintenance problems, existing systems becoming obsolete, upgrading or transitioning to new platforms, expanding our systems as we grow, a breach in security or other unanticipated problems could result in interruptions to or delays in our business and member services and reduce efficiency in our operations.
For several years prior to the COVID-19 pandemic, we experienced growth in our business activities and operations, including a significant increase in the number of system-wide stores.
For several years prior to the COVID-19 pandemic, we experienced growth in our business activities and operations, including a significant increase in the number of system-wide clubs.
The CCPA also requires that businesses make disclosures to individuals about their collection and use practices and restricts a business’s ability to use, disclose or retain personal information, in some cases. The CCPA also provides for civil penalties for violations and a private right of action for certain data breaches.
The CCPA also requires that businesses make disclosures to California consumers about their collection and use practices and restricts a business’s ability to use, disclose or retain personal information, in some cases. The CCPA also provides for civil penalties for violations and a private right of action for certain data breaches.
Under the Indenture, Master Issuer had approximately $2.0 billion of outstanding debt as of December 31, 2023. Additionally, the Master Issuer has the ability to borrow amounts from time to time on a revolving basis, up to an aggregate principal amount of $75 million pursuant to the 2022 Variable Funding Notes.
Under the Indenture, Master Issuer had approximately $2.2 billion of outstanding debt as of December 31, 2024. Additionally, the Master Issuer has the ability to borrow amounts from time to time on a revolving basis, up to an aggregate principal amount of $75 million pursuant to the 2022 Variable Funding Notes.

… 140 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+1 added−0 removed8 unchanged
Biggest changeMonitor Cybersecurity Incidents The Vice President of IT Security and Sr. Director of Security implement and oversees processes for the monitoring of our information systems. This includes the deployment of security measures and system audits to identify potential vulnerabilities.
Biggest changeDirector of Security implement and oversees processes for the monitoring of our information systems. This includes the deployment of security measures and system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, we have implemented an incident response plan, which includes actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. Reporting to Board of Directors The VP of IT Security, in his capacity, regularly informs the CIO, Chief Financial Officer (“CFO”) and other executive team leaders of aspects related to cybersecurity risks and incidents.
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. Reporting to Board of Directors 40 Table of Contents The Vice President of IT Security, in his capacity, regularly informs the CIO, Chief Financial Officer (“CFO”) and other executive team leaders of aspects related to cybersecurity risks and incidents.
In addition to our scheduled meetings, the Audit Committee, CIO and interim CEO maintain an ongoing dialogue regarding emerging or potential cybersecurity risks. The Audit Committee conducts an annual review of our cybersecurity posture and the effectiveness of our risk management strategies.
In addition to our scheduled meetings, the Audit Committee, CIO and CEO maintain an ongoing dialogue regarding emerging or potential cybersecurity risks. The Audit Committee conducts a review at least annually of our cybersecurity posture and the effectiveness of our risk management strategies.
These risks are captured and prioritized in a risk register. Engaging Third-parties on Risk Management Recognizing the complexity and evolving nature of cybersecurity threats, Planet Fitness engages with a range of external experts, including cybersecurity assessors, consultants, legal advisors and auditors in evaluating and testing our risk management systems.
Engaging Third-parties on Risk Management Recognizing the complexity and evolving nature of cybersecurity threats, Planet Fitness engages with a range of external experts, including cybersecurity assessors, consultants, legal advisors and auditors in evaluating and testing our risk management systems. Our collaboration with these third-parties includes regular audits, threat assessments, and consultation on security enhancements.
Our collaboration with these third-parties includes regular audits, threat assessments, and consultation on security enhancements. Oversee Third-party Risk Because we are aware of the risks associated with third-party service providers, Planet Fitness implements processes to oversee and manage these risks. We conduct security assessments of third-party providers before engagement and maintain ongoing monitoring to oversee compliance with our cybersecurity standards.
Oversee Third-party Risk Because we are aware of the risks associated with third-party service providers, Planet Fitness implements processes to oversee and manage these risks. We conduct security assessments of third-party providers before engagement and maintain ongoing monitoring to oversee compliance with our cybersecurity standards. Monitor Cybersecurity Incidents The Vice President of IT Security and Sr.
In the event of a cybersecurity incident, we have implemented an incident response plan, which includes actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. 40 Table o f Contents Risks from Cybersecurity Threats As of the date of this report, we have not experienced a cybersecurity incident that resulted in a material effect on our business strategy, results of operations, or financial condition, but we cannot provide assurance that we will not be materially affected in the future by such risks or any future material incidents.
Risks from Cybersecurity Threats As of the date of this report, we have not experienced a cybersecurity incident that resulted in a material effect on our business strategy, results of operations, or financial condition, but we cannot provide assurance that we will not be materially affected in the future by such risks or any future material incidents.
Managing Material Risks & Integrated Risk Management Planet Fitness has strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. Our risk management team works closely with our information technology (“IT”) department to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.
Our risk management team works closely with our information technology (“IT”) department to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs. These risks are captured and prioritized in a risk register.
Added
Managing Material Risks & Integrated Risk Management 39 Table of Contents Planet Fitness has strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management.

Item 2. Properties

Properties — owned and leased real estate

6 edited+0 added−0 removed0 unchanged
Biggest changeThe following table lists all of our corporate-owned store counts by state or province as of December 31, 2023: 41 Table o f Contents State/Province Store Count Florida 61 New York 35 South Carolina 34 Pennsylvania 22 Georgia 21 New Hampshire 20 New Jersey 16 North Carolina 16 California 8 Alabama 6 Delaware 5 Massachusetts 4 Maine 4 Ontario 2 Vermont 2 Franchisee Stores Franchisees own or directly lease from a third-party each Planet Fitness franchise location.
Biggest changeThe following table lists all of our corporate-owned club counts by state, province or country as of December 31, 2024: State/Province/Country Club Count Florida 66 New York 38 South Carolina 36 Georgia 23 Pennsylvania 22 New Hampshire 22 North Carolina 17 New Jersey 16 California 8 Alabama 6 Delaware 5 Maine 5 Spain 5 Massachusetts 4 Ontario 2 Vermont 2 Franchisee Clubs Franchisees own or directly lease from a third-party each Planet Fitness franchise location.
Item 2. Properties Our corporate headquarters is located in Hampton, New Hampshire and consists of approximately 71,700 sq. ft. of leased office space. It is the base of operations for our executive management and nearly all of the employees who provide our primary corporate and franchisee support functions.
Item 2. Properties Our New Hampshire Corporate Support Center is located in Hampton, New Hampshire and consists of approximately 71,700 sq. ft. of leased office space. It is the base of operations for our executive management and nearly all of the employees who provide our primary corporate and franchisee support functions.
We have not historically owned or entered into leases for Planet Fitness franchise stores and generally do not guarantee franchisees’ lease agreements, although we have done so in a few certain instances and may do so from time to time.
We have not historically owned or entered into leases for Planet Fitness franchise clubs and generally do not guarantee franchisees’ lease agreements, although we have done so in a few certain instances and may do so from time to time.
In addition, the Company has a corporate-owned stores headquarters located in Orlando, Florida, which consists of 8,168 sq. ft. of leased office space. Corporate-Owned Stores We lease all but one of our corporate-owned stores. Our store leases typically have initial terms of ten years with two five-year renewal options, exercisable in our discretion.
In addition, the Company has a Florida Corporate Support Center located in Orlando, Florida, which consists of 8,168 sq. ft. of leased office space. Corporate-Owned Clubs We lease all but one of our corporate-owned clubs. Our club leases typically have initial terms of 10 years with two five-year renewal options, exercisable in our discretion.
As of December 31, 2023, we had 2,319 franchisee-owned stores in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia.
As of December 31, 2024, we had 2,445 franchisee-owned clubs in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia.
As of December 31, 2023, we had 256 corporate-owned store locations.
As of December 31, 2024, we had 277 corporate-owned club locations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeSee Note 18 - Commitments and Contingencies to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None. PART II
Biggest changeSee Note 17 - Commitments and Contingencies to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+3 added−0 removed3 unchanged
Biggest changeIssuer Purchases of Equity Securities The following table provides information regarding purchases of shares of our Class A common stock by us and our “affiliated purchasers” (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the three months ended December 31, 2023. 43 Table o f Contents Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (1) 10/01/23 - 10/30/23 — $ — — $374,970,426 11/01/23 - 11/30/23 — $ — — $374,970,426 12/01/23 - 12/31/23 — $ — — $374,970,426 Total — $ — — (1) On November 5, 2019, our board of directors approved a share repurchase program of $500,000,000.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (1) 10/31/2024 — $ — — $500,000,000 11/30/2024 — $ — — $500,000,000 12/31/2024 — $ — — $500,000,000 Total — $ — — (1) On June 13, 2024, our board of directors approved the 2024 share repurchase program of up to $500,000,000 to replace the 2022 share repurchase program, contingent upon the completion of the ASR Agreement.
The graph and table assume that $100 was invested at the market close on the last trading day for the fiscal year ending December 31, 2018. The performance graph and table are not intended to be indicative of future performance.
The graph and table assume that $100 was invested at the market close on the last trading day for the fiscal year ending December 31, 2019. The performance graph and table are not intended to be indicative of future performance.
A substantially greater number of holders of our Class A common stock are held in “street name” and held of record by banks, brokers and other financial institutions. As of February 22, 2024, there were 11 stockholders of record of our Class B common stock, and there is no public market for these shares.
A substantially greater number of holders of our Class A common stock are held in “street name” and held of record by banks, brokers and other financial institutions. As of February 18, 2025, there were 7 stockholders of record of our Class B common stock, and there is no public market for these shares.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Class A Common Stock Shares of our Class A common stock trade on the NYSE under the symbol “PLNT.” Holders of Record As of February 22, 2024, there were 35 stockholders of record of our Class A common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Class A Common Stock 41 Table of Contents Shares of our Class A common stock trade on the NYSE under the symbol “PLNT.” Holders of Record As of February 18, 2025, there were 34 stockholders of record of our Class A common stock.
The declaration, amount and payment of any future dividends on shares of our Class A common stock will be at the sole discretion of our board of directors, which may take into account general economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and any other factors that our board of directors may deem relevant. 42 Table o f Contents Performance Graph The following graph and table depict the cumulative total shareholder return for our Class A common stock, the S&P 500 Index, the Russell 2000 Index, and the Invesco Dynamic Leisure and Entertainment ETF (“PEJ”) for the five years ended December 31, 2023.
The declaration, amount and payment of any future dividends on shares of our Class A common stock will be at the sole discretion of our board of directors, which may take into account general economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and any other factors that our board of directors may deem relevant.
The performance graph and table shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933 or the Exchange Act. 2018 2019 2020 2021 2022 2023 Planet Fitness, Inc. $ 100.00 $ 139.28 $ 144.78 $ 168.93 $ 146.96 $ 136.14 S&P 500 Index $ 100.00 $ 128.88 $ 149.83 $ 190.13 $ 153.16 $ 190.27 Russell 2000 (Total Return) Index $ 100.00 $ 123.72 $ 146.44 $ 166.50 $ 130.60 $ 150.31 Invesco Dynamic Leisure and Entertainment ETF (PEJ) $ 100.00 $ 113.82 $ 102.11 $ 125.22 $ 93.44 $ 108.15 Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the fourth quarter of the year ended December 31, 2023.
The performance graph and table shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933 or the Exchange Act. 42 Table of Contents 2019 2020 2021 2022 2023 2024 Planet Fitness, Inc. $ 100.00 $ 103.95 $ 121.29 $ 105.52 $ 97.75 $ 132.39 S&P 500 Index $ 100.00 $ 116.26 $ 147.52 $ 118.84 $ 147.64 $ 182.05 Russell 2000 (Total Return) Index $ 100.00 $ 118.36 $ 134.57 $ 105.56 $ 121.49 $ 133.66 Invesco Dynamic Leisure and Entertainment ETF (PEJ) $ 100.00 $ 89.54 $ 110.75 $ 83.90 $ 98.62 $ 125.31 Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the fourth quarter of the year ended December 31, 2024.
On November 4, 2022, our board of directors approved a share repurchase program of up to $500,000,000 which replaces the plan from November 5, 2019. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. The Company may terminate the program at any time.
The 2024 share repurchase program became effective on September 16, 2024 upon the completion of the ASR Agreement. As of December 31, 2024, there is $500,000,000 remaining under the 2024 share repurchase program. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing.
Added
Performance Graph The following graph and table depict the cumulative total shareholder return for our Class A common stock, the S&P 500 Index, the Russell 2000 Index, and the Invesco Dynamic Leisure and Entertainment ETF (“PEJ”) for the five years ended December 31, 2024.
Added
Issuer Purchases of Equity Securities The following table provides information regarding purchases of shares of our Class A common stock by us and our “affiliated purchasers” (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the three months ended December 31, 2024.
Added
The Company may terminate the program at any time. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

138 edited+31 added−60 removed39 unchanged
Biggest change(5) Includes the effect of royalties at a rate of 7.0% as if the stores were similar to a franchisee-owned store at the current franchise royalty rate. 55 Table o f Contents Results of Operations The following table sets forth a comparison of our consolidated statements of operations in dollars and as a percentage of total revenue: Years Ended December 31, 2023 2022 (in thousands) Amount % of Total Revenues Amount % of Total Revenues Revenue: Franchise $ 317,917 29.7% $ 271,559 29.0% National advertising fund revenue 70,012 6.5% 58,075 6.2% Franchise segment 387,929 36.2% 329,634 35.2% Corporate-owned stores 449,296 41.9% 379,393 40.5% Equipment 234,101 21.9% 227,745 24.3% Total revenue 1,071,326 100.0% 936,772 100.0% Operating costs and expenses: Cost of revenue 190,026 17.7% 177,200 18.9% Store operations 253,619 23.7% 219,422 23.4% Selling, general and administrative 124,930 11.7% 114,853 12.3% National advertising fund expense 70,095 6.5% 66,116 7.1% Depreciation and amortization 149,413 13.9% 124,022 13.2% Other losses, net 10,379 1.0% 5,081 0.5% Total operating costs and expenses 798,462 74.5% 706,694 75.4% Income from operations 272,864 25.5% 230,078 24.6% Other income (expense), net: Interest income 17,741 1.7% 5,005 0.5% Interest expense (86,576) (8.1)% (88,628) (9.5)% Other income (expense), net 3,512 0.3% 14,983 1.6% Total other income (expense), net (65,323) (6.1)% (68,640) (7.3)% Income before income taxes 207,541 19.4% 161,438 17.2% Provision for income taxes 58,512 5.5% 50,515 5.4% Losses from equity-method investments, net of tax (1,994) (0.2)% (467) —% Net income 147,035 13.7% 110,456 11.8% Less net income attributable to non-controlling interests 8,722 0.8% 11,054 1.2% Net income attributable to Planet Fitness, Inc. $ 138,313 12.9% $ 99,402 10.6% Comparison of the years ended December 31, 2023 and December 31, 2022 Revenue Total revenues were $1,071.3 million in the year ended December 31, 2023, compared to $936.8 million in the year ended December 31, 2022, an increase of $134.6 million, or 14.4%.
Biggest changeResults of Operations Comparison of the years ended December 31, 2024 and December 31, 2023 The following table sets forth a comparison of our consolidated statements of operations in dollars and as a percentage of total revenue: Years Ended December 31, 2024 2023 (in thousands) Amount % of Total Revenues Amount % of Total Revenues Revenue: Franchise $ 344,320 29.1% $ 317,917 29.7% National advertising fund revenue 78,927 6.7% 70,012 6.5% Franchise segment 423,247 35.8% 387,929 36.2% Corporate-owned clubs 502,287 42.5% 449,296 41.9% Equipment 256,120 21.7% 234,101 21.9% Total revenue 1,181,654 100.0% 1,071,326 100.0% Operating costs and expenses: Cost of revenue 197,122 16.7% 190,026 17.7% Club operations 290,507 24.6% 253,619 23.7% Selling, general and administrative 129,146 10.9% 124,930 11.7% National advertising fund expense 79,009 6.7% 70,095 6.5% Depreciation and amortization 160,346 13.6% 149,413 13.9% Other losses, net 1,326 0.1% 10,379 1.0% Total operating costs and expenses 857,456 72.6% 798,462 74.5% Income from operations 324,198 27.4% 272,864 25.5% Other income (expense), net: Interest income 23,115 2.0% 17,741 1.7% Interest expense (100,037) (8.5)% (86,576) (8.1)% Other expense, net (548) —% 3,512 0.3% Total other income (expense), net (77,470) (6.5)% (65,323) (6.1)% Income before income taxes 246,728 20.9% 207,541 19.4% Provision for income taxes 68,443 5.8% 58,512 5.5% Losses from equity-method investments, net of tax (4,042) (0.3)% (1,994) (0.2)% Net income 174,243 14.8% 147,035 13.7% Less net income attributable to non-controlling interests 2,201 0.2% 8,722 0.8% Net income attributable to Planet Fitness, Inc. $ 172,042 14.6% $ 138,313 12.9% Revenue Total revenues were $1,181.7 million in the year ended December 31, 2024, compared to $1,071.3 million in the year ended December 31, 2023, an increase of $110.3 million, or 10.3%.
Our ability to repurchase shares at any particular time is also subject to the terms of the Indenture governing the Securitized Senior Notes. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. The Company may reinstate or terminate the program at any time.
Our ability to repurchase shares at any particular time is also subject to the terms of the Indenture governing the Securitized Senior Notes. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. The Company may terminate the program at any time.
Tax Benefit Arrangements As described in Note 17 to the consolidated financial statements included in Part II, Item 8, we are a party to the tax benefit arrangements under which we are contractually committed to pay certain non-controlling interest holders 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of certain transactions.
Tax Benefit Arrangements As described in Note 16 to the consolidated financial statements included in Part II, Item 8, we are a party to the tax benefit arrangements under which we are contractually committed to pay certain non-controlling interest holders 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of certain transactions.
PF Black Card members pay higher monthly membership dues than our standard Classic Card membership and receive additional benefits for these additional fees. These benefits include access to all of our stores system-wide, guest privileges and access to exclusive areas in our stores that provide amenities such as water massage beds, massage chairs, tanning equipment and more.
PF Black Card members pay higher monthly membership dues than our standard Classic Card membership and receive additional benefits for these additional fees. These benefits include access to all of our clubs system-wide, guest privileges and access to exclusive areas in our clubs that provide amenities such as water massage beds, massage chairs, tanning equipment and more.
Discussions of fiscal 2021 items and year-to-year comparisons between fiscal 2022 and fiscal 2021 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our annual report on Form 10-K for the fiscal year ended December 31, 2022.
Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our annual report on Form 10-K for the fiscal year ended December 31, 2023.
For the majority of our equipment purchase obligations, our policy is to require the franchisee to provide us with either a deposit or proof of a committed financing arrangement. Off-Balance Sheet Arrangements As of December 31, 2023, our off-balance sheet arrangements consisted of guarantees of lease agreements for certain franchisees.
For the majority of our equipment purchase obligations, our policy is to require the franchisee to provide us with either a deposit or proof of a committed financing arrangement. Off-Balance Sheet Arrangements As of December 31, 2024, our off-balance sheet arrangements consisted of guarantees of lease agreements for certain franchisees.
Expenses We primarily incur the following expenses: • Cost of revenue : Primarily includes the direct costs associated with equipment sales, including freight costs, to new and existing franchisee-owned stores in the U.S., Canada and Mexico. Cost of revenue also includes the cost of retail merchandise sold at our corporate-owned stores.
Expenses We primarily incur the following expenses: • Cost of revenue : Primarily includes the direct costs associated with equipment sales, including freight costs, to new and existing franchisee-owned clubs in the U.S., Canada and Mexico. Cost of revenue also includes the cost of retail merchandise sold at our corporate-owned clubs.
Our franchisees are responsible for maintaining the membership billing records and collection of member dues for their respective stores through the point-of-sale system. Our royalties are generally based on monthly and annual membership billings for the franchisee-owned stores without regard to the collections of those billings by our franchisees.
Our franchisees are responsible for maintaining the membership billing records and collection of member dues for their respective clubs through the point-of-sale system. Our royalties are generally based on monthly and annual membership billings for the franchisee-owned clubs without regard to the collections of those billings by our franchisees.
During the remainder of 2023, the Company invested an additional $25.6 million in the form of cash and received $17.0 million worth of equity interests for the contribution of five stores that were acquired from a franchisee in October 2023 in connection with a legal settlement.
During the remainder of 2023, the Company invested an additional $25.6 million in the form of cash and received $17.0 million worth of equity interests for the contribution of five clubs that were acquired from a franchisee in October 2023 in connection with a legal settlement.
Several factors affect our same store sales in any given period, including the following: • the number of stores that have been in operation for more than 12 months; • the percentage mix and pricing of PF Black Card and standard Classic Card memberships in any period; • growth in total net memberships per store; • consumer recognition of our brand and our ability to respond to changing consumer preferences; • overall economic trends, particularly those related to consumer spending; • our and our franchisees’ ability to operate stores effectively and efficiently to meet consumer expectations; • marketing and promotional efforts; • local competition; • trade area dynamics; and • opening of new stores in the vicinity of existing locations.
Several factors affect our same club sales in any given period, including the following: • the number of clubs that have been in operation for more than 12 months; • the percentage mix and pricing of PF Black Card and standard Classic Card memberships in any period; • growth in total net memberships per club; • consumer recognition of our brand and our ability to respond to changing consumer preferences; • overall economic trends, particularly those related to consumer spending; • our and our franchisees’ ability to operate clubs effectively and efficiently to meet consumer expectations; • marketing and promotional efforts; • local competition; • trade area dynamics; and • opening of new clubs in the vicinity of existing locations.
Revenue and Segment EBITDA for all operating segments include only transactions with unaffiliated customers and do not include intersegment transactions.
Revenue and Segment Adjusted EBITDA for all operating segments include only transactions with unaffiliated customers and do not include intersegment transactions.
System-wide sales is an operating measure that includes monthly membership dues and annual fee billings by franchisees that are not revenue realized by the Company in accordance with GAAP, as well as monthly membership dues and annual fee billings by the Company’s corporate-owned stores.
System-wide sales is an operating measure that includes monthly membership dues and annual fee billings by franchisees that are not revenue realized by the Company in accordance with GAAP, as well as monthly membership dues and annual fee billings by the Company’s corporate-owned clubs.
Average royalty fee percentages for the franchisee-owned stores The average royalty fee percentage represents royalties collected by us from our franchisees as a percentage of the monthly membership dues and annual fees that are billed by the franchisees to their member base.
Average royalty fee percentages for the franchisee-owned clubs The average royalty fee percentage represents royalties collected by us from our franchisees as a percentage of the monthly membership dues and annual fees that are billed by the franchisees to their member base.
In 2019, in connection with a real estate partnership, the Company began guaranteeing certain leases of its franchisees up to a maximum period of ten years, with earlier expiration dates if certain conditions are met. See Note 18 to our consolidated financial statements included elsewhere in this Form 10-K for more information regarding these operating leases and guarantees.
In 2019, in connection with a real estate partnership, the Company began guaranteeing certain leases of its franchisees up to a maximum period of 10 years, with earlier expiration dates if certain conditions are met. See Note 17 to our consolidated financial statements included elsewhere in this Form 10-K for more information regarding these operating leases and guarantees.
We capture all membership changes daily through our point-of-sale system. We monitor a combination of membership growth, average members per store, average monthly dues and transfers from or to an individual store location.
We capture all membership changes daily through our point-of-sale system. We monitor a combination of membership growth, average members per club, average monthly dues and transfers from or to an individual club location.
Our royalties and certain other fees are generally deducted on or around the 17 th of each month from these membership billings by the processor prior to the net billings being remitted to the franchisees, although our billing and collection practices vary in certain international markets.
Our royalties and certain other fees are generally deducted on or around the billing dates of each month from these membership billings by the processor prior to the net billings being remitted to the franchisees, although our billing and collection practices vary in certain international markets.
Our statements of operations do not include, and we are not responsible for, any costs associated with operating franchisee-owned stores. • Selling, general and administrative expenses : Consists of costs primarily associated with administrative, corporate-owned store and franchisee support functions related to our existing business as well as growth and development activities, including certain costs to support equipment placement and assembly services.
Our statements of operations do not include, and we are not responsible for, any costs associated with operating franchisee-owned clubs. • Selling, general and administrative expenses : Consists of costs primarily associated with administrative, corporate-owned club and franchisee support functions related to our existing business as well as growth and development activities, including certain costs to support equipment placement and assembly services.
(14) Represents a loss on extinguishment of debt as a result of the repayment of the 2018-1 Class A-2-I notes prior to the anticipated repayment date.
(8) Represents a loss on extinguishment of debt as a result of the repayment of the 2018-1 Class A-2-I notes prior to the anticipated repayment date.
(2) Reflects administrative costs attributable to the Corporate-owned stores segment but not directly related to store operations. (3) Reflects certain intercompany charges and other fees which are eliminated in consolidation. (4) Represents the impact of certain purchase accounting adjustments associated with the 2012 Acquisition and our historical acquisitions of franchisee-owned stores.
(2) Reflects administrative costs attributable to the Corporate-owned clubs segment but not directly related to club operations. (3) Reflects certain intercompany charges and other fees which are eliminated in consolidation. (4) Represents the impact of certain purchase accounting adjustments associated with the 2012 Acquisition and our historical acquisitions of franchisee-owned clubs.
Our maximum total commitment under these agreements is approximately $5.2 million and would only require payment upon default by the primary obligor. The estimated fair value of these guarantees at December 31, 2023 was not material, and no accrual has been recorded for our potential obligation under these arrangements.
Our maximum total commitment under these agreements is approximately $4.5 million and would only require payment upon default by the primary obligor. The estimated fair value of these guarantees at December 31, 2024 was not material, and no accrual has been recorded for our potential obligation under these arrangements.
We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
We retain the right to prevent debranded clubs from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s club with another club located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining club.
The adjustment represents the amount of actual non-cash amortization expense recorded, in accordance with GAAP, in each period. (16) Represents corporate income taxes at an assumed effective tax rate of 25.9% for both the years ended December 31, 2023 and 2022, applied to adjusted income before income taxes.
The adjustment represents the amount of actual non-cash amortization expense recorded, in accordance with GAAP, in each period. (10) Represents corporate income taxes at an assumed effective tax rate of 25.9% for both the years ended December 31, 2024 and 2023, applied to adjusted income before income taxes.
For the 2012 Acquisition, intangible assets consisted of trade and brand names, member relationships, franchisee relationships related to both our franchise and equipment segments, non-compete agreements, order backlog and favorable and unfavorable leases.
For the 2012 Acquisition, 57 Table of Contents intangible assets consisted of trade and brand names, member relationships, franchisee relationships related to both our franchise and equipment segments, non-compete agreements, order backlog and favorable and unfavorable leases.
Changes in the projected liability under these tax benefit arrangements are and will be recorded as a component of other income (expense) each period. The projection of future taxable income involves significant judgment.
Changes in the projected liability under these tax benefit arrangements are 58 Table of Contents and will be recorded as a component of other income (expense) each period. The projection of future taxable income involves significant judgment.
Our cost of revenue changes primarily based on equipment sales volume. • Store operations : Includes the direct costs associated with our corporate-owned stores, primarily payroll, rent, utilities, supplies, maintenance, insurance, and local and national advertising. The components of store operations remain relatively stable for each store.
Our cost of revenue changes primarily based on equipment sales volume. • Club operations : Includes the direct costs associated with our corporate-owned clubs, primarily payroll, rent, utilities, supplies, maintenance, insurance, and local and national advertising. The components of club operations remain relatively stable for each club.
Equipment sales to new and existing franchisee-owned stores also generate significant cash flows. Franchisees generally pay in advance, provide evidence of a committed financing arrangement for such equipment or provide evidence of availability under an existing credit facility.
Equipment sales to new and existing franchisee-owned clubs also generate significant cash flows. Franchisees generally pay in advance, provide evidence of a committed financing arrangement for such equipment or provide evidence of sufficient liquidity or availability under an existing credit facility.
Same store sales Same store sales refers to year-over-year sales comparisons for the same store sales base of both corporate-owned and franchisee-owned stores. We define the same store sales base to include those stores that have been open and for which monthly membership dues have been billed for longer than 12 months.
Same club sales Same club sales refers to year-over-year sales comparisons for the same club sales base of both corporate-owned and franchisee-owned clubs. We define the same club sales base to include those clubs that have been open and for which monthly membership dues have been billed for longer than 12 months.
Number of new store openings The number of new store openings reflects stores opened during a particular reporting period for both corporate-owned and franchisee-owned stores. Opening new stores is an important part of our growth strategy and we expect the majority of our future new stores will be franchisee-owned.
Number of new club openings The number of new club openings reflects clubs opened during a particular reporting period for both corporate-owned and franchisee-owned clubs. Opening new clubs is an important part of our growth strategy and we expect the majority of our future new clubs will be franchisee-owned.
We believe that Adjusted EBITDA is an appropriate measure of operating performance in addition to EBITDA because it eliminates the impact of other items that we believe reduce the comparability of our underlying core business performance from period to period and is therefore useful to our investors.
We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of certain expenses and other items that we believe reduce the comparability of our underlying core business performance from period to period and is therefore useful to our investors.
The key measures for determining how our business is performing include total monthly dues and annual fees from members (which we refer to as system-wide sales), the number of new store openings, same store sales for both corporate-owned and franchisee-owned stores, average royalty fee percentages for franchisee-owned stores, monthly PF Black Card membership penetration percentage, EBITDA, Adjusted EBITDA, Segment EBITDA, four-wall EBITDA, royalty adjusted four-wall EBITDA, Adjusted net income, and Adjusted net income per share, diluted.
The key measures for determining how our business is performing include total monthly dues and annual fees from members (which we refer to as system-wide sales), the number of new club openings, same club sales for both corporate-owned and franchisee-owned clubs, net member growth, average royalty fee percentages for franchisee-owned clubs, PF Black Card penetration percentage, Adjusted EBITDA, Segment Adjusted EBITDA, four-wall Adjusted EBITDA, Royalty adjusted four-wall EBITDA, Adjusted net income, and Adjusted net income per share, diluted.
Total monthly dues and annual fees from members (system-wide sales) We review the total amount of dues we collect from our members on a monthly basis, which allows us to assess changes in the performance of our corporate-owned and franchisee-owned stores from period to period, any competitive pressures, local or regional membership traffic patterns and general market conditions that might impact our store performance.
Total monthly dues and annual fees from members (system-wide sales) We review the total amount of dues we bill to our members on a monthly basis, which allows us to assess changes in the performance of our corporate-owned and franchisee-owned clubs from period to period, any competitive pressures, local or regional membership traffic patterns and general market conditions that might impact our club performance.
PF Black Card penetration percentage Our PF Black Card penetration percentage represents the number of our members that have opted to enroll in our PF Black Card membership program as a percentage of our total active membership base.
PF Black Card penetration percentage Our PF Black Card penetration percentage represents the number of our recurring billing members that have opted to enroll in our PF Black Card membership program as a percentage of our total recurring billing membership base.
These costs primarily consist of payroll, information technology, marketing, legal, accounting, and insurance related expenses. • NAF Expense: Consists of expenses incurred on behalf of the NAF.
These costs primarily consist of payroll, information technology, marketing, legal, accounting, and insurance related expenses. • NAF Expense: Consists of expenses incurred on behalf of the NAFs (“NAF expense”).
In projecting future taxable income, we consider our historical results and incorporate certain assumptions. As of December 31, 2023, we recognized $495.7 million of liabilities relating to our obligations under the tax benefit arrangements. We concluded that we would have sufficient future taxable income to utilize all of the related tax benefits generated by all transactions that occurred.
In projecting future taxable income, we consider our historical results and incorporate certain assumptions. As of December 31, 2024, we recognized $466.9 million of liabilities relating to our obligations under the tax benefit arrangements. We concluded that we would have sufficient future taxable income to utilize all of the related tax benefits generated by all transactions that occurred.
Contractual Obligations and Commitments The following table presents contractual obligations and commercial commitments as of December 31, 2023.
Contractual Obligations and Commitments The following table presents contractual obligations and commercial commitments as of December 31, 2024.
The Equipment segment includes the sale of equipment to franchisee-owned stores in the U.S, Canada and Mexico. We evaluate the performance of our segments and allocate resources to them based on revenue and earnings before interest, taxes, depreciation and amortization, referred to as Segment EBITDA.
The Equipment segment includes the sale of equipment to franchisee-owned clubs in the U.S, Canada and Mexico. 45 Table of Contents We evaluate the performance of our segments and allocate resources to them based on revenue and adjusted earnings before interest, taxes, depreciation and amortization, referred to as Segment Adjusted EBITDA.
The amount and timing of the collection of royalties and membership dues and fees at corporate-owned stores is, therefore, generally fairly predictable. 45 Table o f Contents Our corporate-owned stores also historically generate strong operating margins and cash flows, as a significant portion of our costs are fixed or semi-fixed, such as rent and labor.
The amount and timing of the collection of royalties and membership dues and fees at corporate-owned clubs is, therefore, generally fairly predictable. Our corporate-owned clubs also historically generate strong operating margins and cash flows, as a significant portion of our costs are fixed or semi-fixed, such as rent and labor.
For other acquisitions, which consist of acquisitions of stores from franchisees, intangible assets generally consist of member relationships, re-acquired franchise rights, and favorable and unfavorable leases. 61 Table o f Contents The Company uses a variety of information sources to determine the estimated fair values of acquired assets and liabilities, including third-party valuation experts.
For other acquisitions, which consist of acquisitions of clubs from franchisees, intangible assets generally consist of member relationships, re-acquired franchise rights, and favorable and unfavorable leases. The Company uses a variety of information sources to determine the estimated fair values of acquired assets and liabilities, including third-party valuation experts.
(12) Represents the amortization expense of the Company’s pro-rata portion of the basis difference in its equity method investees, which is included within losses from equity-method investments, net of tax on our consolidated statements of operations. (13) Represents certain other gains and charges that we do not believe reflect our underlying business performance.
(6) Represents the Company’s pro-rata portion of the basis difference related to intangible asset amortization expense in its equity method investees, which is included within losses from equity-method investments, net of tax on our consolidated statements of operations. (7) Represents certain other gains and charges that we do not believe reflect our underlying business performance.
(12) Represents the amortization expense of the Company’s pro-rata portion of the basis difference in its equity method investees, which is included within losses from equity-method investments, net of tax on our consolidated statements of operations. (13) Represents certain other gains and charges that we do not believe reflect our underlying business performance.
(6) Represents the Company’s pro-rata portion of the basis difference related to intangible asset amortization expense in its equity method investees, which is included within losses from equity-method investments, net of tax on our consolidated statements of operations. (7) Represents certain other gains and charges that we do not believe reflect our underlying business performance.
Our bright, clean stores are typically 20,000 square feet, with a large selection of high-quality, purple and yellow Planet Fitness-branded cardio, circuit- and weight-training equipment and friendly staff trainers who offer unlimited free fitness instruction to all our members in small groups through our PE@PF program.
Our bright, clean clubs are typically 20,000 square feet, with a large selection of high-quality, purple and yellow Planet Fitness-branded cardio, circuit- and strength equipment and friendly staff trainers who offer unlimited free fitness instruction to all our members in small groups through our PE@PF 43 Table of Contents program.
Estimating future taxable income is inherently uncertain and requires judgment. As of December 31, 2023, we had $502.5 million of net deferred tax assets, net of valuation allowances. We expect to realize future tax benefits related to the utilization of these assets.
Estimating future taxable income is inherently uncertain and requires judgment. As of December 31, 2024, we had $468.8 million of net deferred tax assets, net of valuation allowances. We expect to realize future tax benefits related to the utilization of these assets.
Our franchise segment revenue comprised 36.2% and 35.2% of our total revenue for the years ended December 31, 2023 and 2022, respectively. • Corporate-owned store segment revenue : Includes monthly membership dues, enrollment fees, annual fees and prepaid fees paid by our members as well as retail sales.
Our franchise segment revenue comprised 35.8% and 36.2% of our total revenue for the years ended December 31, 2024 and 2023, respectively. • Corporate-owned club segment revenue : Includes monthly membership dues, enrollment fees, annual fees, and other fees paid by our members as well as retail sales.
This source of revenue comprised 41.9% and 40.5% of our total revenue for the years ended December 31, 2023 and 2022, respectively.
This source of revenue comprised 42.5% and 41.9% of our total revenue for the years ended December 31, 2024 and 2023, respectively.
A held-to-maturity investment security and its allowance for expected credit losses is written off when deemed uncollectible.
A held-to-maturity investment security and its allowance for expected credit losses is written off when deemed uncollectible. 59 Table of Contents
Four-wall EBITDA is an assessment of our average corporate-owned store-level profitability for stores included in the same-store-sales base, which includes local and national advertising expense and adjusts for certain administrative and other items that we do not consider in our evaluation of individual store-level performance. Royalty adjusted four-wall EBITDA then applies the current royalty rate.
Four-wall Adjusted EBITDA is an assessment of our average corporate-owned club-level profitability for clubs included in the same-club-sales base, which includes local and national advertising expense and adjusts for certain administrative and other items that we do not consider in our evaluation of individual club-level performance.
We measure same store sales based solely upon monthly dues billed to members of our corporate-owned and franchisee-owned stores.
We measure same club sales based solely upon monthly dues billed to members of our corporate-owned and franchisee-owned clubs.
Our Franchise segment includes operations related to our franchising business in the United States, Puerto Rico, Canada, Panama, Mexico and Australia, as well as revenues and expenses of the NAF. Our Corporate-owned stores segment includes operations with respect to all corporate-owned stores throughout the United States and Canada.
Our Franchise segment includes operations related to our franchising business in the United States, Puerto Rico, Canada, Panama, Mexico and Australia, as well as revenues and expenses of the NAFs. Our Corporate-owned clubs segment includes operations with respect to all corporate-owned clubs throughout the U.S., Canada, and Spain.
In February 2022, the Master Issuer completed a refinancing transaction with respect to this facility under which the Master Issuer issued the Series 2022-1 Class A-2 Notes with initial principal amounts totaling $900 million.
In June 2024, the Master Issuer completed a refinancing transaction with respect to this facility under which the Master Issuer issued the Series 2024-1 Class A-2 Notes with initial principal amounts totaling $800 million.
Actual taxable income may differ from estimates, which could significantly impact the liability under the tax benefit arrangements and the Company’s consolidated results of operations. 62 Table o f Contents Investments and allowance for expected credit losses Our held-to-maturity debt security is reported at amortized cost.
Actual taxable income may differ from estimates, which could significantly impact the liability under the tax benefit arrangements and the Company’s consolidated results of operations. Investments and allowance for expected credit losses Our held-to-maturity debt security is reported at amortized cost. We reserve for expected credit losses on our held-to-maturity debt securities through the allowance for expected credit losses.
Same store sales of our international stores are calculated on a constant currency basis, meaning that we translate the current year’s same store sales of our international stores at the same exchange rates used in the prior year.
Same club sales of our international clubs are calculated on a constant currency basis, meaning that we translate the 47 Table of Contents current year’s same club sales of our international clubs at the same exchange rates used in the prior year.
(15) Includes $12.4 million of amortization of intangible assets, other than favorable leases, for each of the years ended December 31, 2023 and 2022, recorded in connection with the 2012 Acquisition, and $39.1 million and $27.9 million of amortization of intangible assets for the years ended December 31, 2023 and 2022, respectively, created in connection with historical acquisitions of franchisee-owned stores.
(9) Includes $10.6 million and $12.4 million of amortization of intangible assets, other than favorable leases, for the years ended December 31, 2024 and 2023, respectively, recorded in connection with the 2012 Acquisition, and $38.6 million and $39.1 million of amortization of intangible assets for the years ended December 31, 2024 and 2023, respectively, created in connection with historical acquisitions of franchisee-owned clubs.
National advertising fund expense National advertising fund expense was $70.1 million in the year ended December 31, 2023, compared to $66.1 million in the year ended December 31, 2022, an increase of $4.0 million, or 6.0%. This increase was primarily a result of higher advertising and marketing expenditures due to higher national advertising revenue as described above.
National advertising fund expense National advertising fund expense was $79.0 million in the year ended December 31, 2024, compared to $70.1 million in the year ended December 31, 2023, an increase of $8.9 million, or 12.7%. This increase was primarily a result of higher advertising and marketing expenditures due to higher national advertising revenue as described above.
We recognize the effects of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
Consistent with common industry practice, we present same store sales as compared to the same period in the prior year for all stores that have been open and for which monthly membership dues have been billed for longer than 12 months, beginning with the thirteenth month and thereafter, as applicable.
We present same club sales as compared to the same period in the prior year for all clubs that have been open and for which monthly membership dues have been billed for longer than 12 months, beginning with the 13th month and thereafter, as applicable.
Recent Transactions Florida Acquisition On April 16, 2023, the Company purchased from one of its franchisees a majority of the assets associated with four stores operating in Florida (the “Florida Acquisition”) for approximately $26.3 million in cash consideration. See Note 5 to the consolidated financial statements.
See “—Share Repurchase Program” below for more information. Florida Acquisition On April 16, 2023, the Company purchased from one of its franchisees a majority of the assets associated with four clubs operating in Florida (the “Florida Acquisition”) for approximately $26.3 million in cash consideration. See Note 4 to the consolidated financial statements.
We reserve for expected credit losses on our held-to-maturity debt securities through the allowance for expected credit losses. The allowance for expected credit losses estimate reflects a lifetime loss estimate and is based on historical loss information for assets with similar risk characteristics, adjusted for management’s expectations.
The allowance for expected credit losses estimate reflects a lifetime loss estimate and is based on historical loss information for assets with similar risk characteristics, adjusted for management’s expectations.
Provided our stores are open, we bill monthly dues on or around the 17 th of every month and bill annual fees once per year from each member based upon when the member signed his or her membership agreement. System-wide sales were $4.5 billion and $3.9 billion during the years ended December 31, 2023 and 2022, respectively.
We bill monthly dues on or around the 17 th of every month and bill annual fees once per year to each member based upon when the member signed their membership agreement. System-wide sales were $4.8 billion and $4.5 billion during the years ended December 31, 2024 and 2023, respectively.
The following table shows our same store sales: Years Ended December 31, 2023 2022 Same store sales growth: Franchisee-owned stores 8.5 % 11.2 % Corporate-owned stores 10.1 % 13.1 % System-wide stores 8.7 % 11.4 % Number of stores in same store sales base: Franchisee-owned stores 2,144 2,004 Corporate-owned stores 231 104 Total stores 2,384 2,226 Net member growth per store Net member growth per store refers to the net change in total members in relation to total stores over time.
The following table shows our same club sales: Years Ended December 31, 2024 2023 Same club sales growth: Franchisee-owned clubs 5.2 % 8.5 % Corporate-owned clubs 4.5 % 10.1 % System-wide clubs 5.0 % 8.7 % Number of clubs in same club sales base: Franchisee-owned clubs 2,296 2,144 Corporate-owned clubs 253 231 Total clubs 2,554 2,384 Net member growth Net member growth refers to the net change in total members in relation to total clubs over time.
Investing activities For the year ended December 31, 2023, net cash used in investing activities was $340.0 million compared to $506.6 million in the year ended December 31, 2022, a decrease of $166.6 million.
Investing activities For the year ended December 31, 2024, net cash used in investing activities was $208.7 million compared to $340.0 million in the year ended December 31, 2023, a decrease of $131.3 million.
We seek to make it simple for members to join, whether online, through our mobile application or in-store, and, while some memberships require a cancellation fee, we offer, and require our franchisees to offer, a non-committal membership option. This approach to memberships is part of our commitment to appeal to new and occasional gym users.
We seek to make it simple for members to join, whether online, through our mobile application or in-club, and, while some memberships require a cancellation fee, we offer, and require our franchisees to offer, a non-committal membership option.
The following table shows the growth in our corporate-owned and franchisee-owned store base: 48 Table o f Contents Year Ended December 31, 2023 2022 Franchisee-owned stores: Stores operated at beginning of period 2,176 2,142 New stores opened 147 144 Stores acquired from the Company 5 6 Stores debranded, sold or consolidated (1) (9) (116) Stores operated at end of period 2,319 2,176 Corporate-owned stores: Stores operated at beginning of period 234 112 New stores opened 18 14 Stores sold to franchisees (5) (6) Stores acquired from franchisees 9 114 Stores operated at end of period 256 234 Total stores: Stores operated at beginning of period 2,410 2,254 New stores opened 165 158 Stores debranded, sold or consolidated (1) — (2) Stores operated at end of period 2,575 2,410 (1) The term “debranded” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement.
The following table shows the growth in our corporate-owned and franchisee-owned club base: Years Ended December 31, 2024 2023 Franchisee-owned clubs: Clubs operated at beginning of period 2,319 2,176 New clubs opened 129 147 Clubs acquired from the Company — 5 Clubs debranded, sold or consolidated (1) (3) (9) Clubs operated at end of period 2,445 2,319 Corporate-owned clubs: Clubs operated at beginning of period 256 234 New clubs opened 21 18 Clubs sold to franchisees — (5) Clubs acquired from franchisees — 9 Clubs operated at end of period 277 256 Total clubs: Clubs operated at beginning of period 2,575 2,410 New clubs opened 150 165 Clubs debranded, sold or consolidated (1) (3) — Clubs operated at end of period 2,722 2,575 (1) The term “debranded” refers to a franchisee-owned club whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement.
Accordingly, we believe that Royalty adjusted four-wall EBITDA is comparable to a franchise store under our current franchise agreement and is useful to investors to assess the operating performance of an average store in our system. Management also uses such metrics in assessing store-level operating performance over time.
Royalty adjusted four-wall EBITDA then applies the current royalty rate to our four-wall Adjusted EBITDA. Accordingly, we believe that Royalty adjusted four-wall EBITDA is comparable to a franchise club under our current franchise agreement and is useful to investors to assess the operating performance of an average club in our system.
Franchise segment revenue was $387.9 million in the year ended December 31, 2023 compared to $329.6 million in the year ended December 31, 2022, an increase of $58.3 million, or 17.7%.
Franchise segment revenue was $423.2 million in the year ended December 31, 2024, compared to $387.9 million in the year ended December 31, 2023, an increase of $35.3 million, or 9.1%.
Franchisee-owned stores are generally required to replace their equipment every five to nine years. This source of revenue comprised 21.9% and 24.3% of our total revenue for the years ended December 31, 2023 and 2022, respectively. See Item 8: Financial Statements and Supplementary Data - Note 2(e) for further discussion on our revenue streams and revenue recognition policies.
This source of revenue comprised 21.7% and 21.9% of our total revenue for the years ended December 31, 2024 and 2023, respectively. See Item 8: Financial Statements and Supplementary Data - Note 2(e) for further discussion on our revenue streams and revenue recognition policies.
Franchise revenue was $317.9 million in the year ended December 31, 2023 compared to $271.6 million in the year ended December 31, 2022, an increase of $46.4 million, or 17.1%.
Franchise revenue was $344.3 million in the year ended December 31, 2024, compared to $317.9 million in the year ended December 31, 2023, an increase of $26.4 million, or 8.3%.
Included in franchise revenue is royalty revenue of $260.7 million, franchise and other fees of $32.7 million, and placement revenue of $19.8 million for the year ended December 31, 2023, compared to royalty revenue of $228.7 million, franchise and other fees of $24.2 million, and placement revenue of $17.1 million for the year ended December 31, 2022.
Included in franchise revenue is royalty revenue of $286.3 million, franchise and other fees of $34.8 million and placement revenue of $20.9 million for the year ended December 31, 2024, compared to royalty revenue of $260.7 million, franchise and other fees of $33.6 million and placement revenue of $19.8 million for the year ended December 31, 2023.
As of December 31, 2023, approximately 95% of members at our corporate stores paid their monthly dues by EFT, while the remainder prepaid annually in advance. • Equipment segment revenue : Includes equipment revenue for new franchisee-owned stores as well as replacement equipment for existing franchisee-owned stores, in the U.S., Canada and Mexico.
As of December 31, 2024, approximately 93% of members at our corporate clubs paid their monthly dues by EFT. • Equipment segment revenue : Includes equipment revenue for new franchisee-owned clubs as well as replacement equipment for existing franchisee-owned clubs, in the U.S., Canada and Mexico. Franchisee-owned clubs are generally required to replace their equipment every five to nine years.
Revenue from our corporate-owned stores segment was $449.3 million in the year ended December 31, 2023, compared to $379.4 million in the year ended December 31, 2022, an increase of $69.9 million, or 18.4%.
Revenue from our corporate-owned clubs segment was $502.3 million in the year ended December 31, 2024, compared to $449.3 million in the year ended December 31, 2023, an increase of $53.0 million, or 11.8%.
Subsequent to these repurchases, there is $374,970 remaining under the 2022 share repurchase program. 60 Table o f Contents The timing of purchases and amount of stock repurchased will be subject to the Company’s discretion and will depend on market and business conditions, the Company’s general working capital needs, stock price, applicable legal requirements and other factors.
The timing of purchases and amount of stock repurchased will be subject to the Company’s discretion and will depend on market and business conditions, the Company’s general working capital needs, stock price, applicable legal requirements and other factors.
EBITDA, Adjusted EBITDA, four-wall EBITDA and royalty adjusted four-wall EBITDA as presented in this Form 10-K are supplemental measures of our performance that are neither required by, nor presented in accordance with GAAP.
Adjusted EBITDA, four-wall Adjusted EBITDA, Royalty adjusted four-wall EBITDA, Adjusted net income and Adjusted net income per share, diluted, as presented in this Form 10-K, are supplemental measures of our performance that are neither required by, nor presented in accordance with GAAP and should not be considered as substitutes for GAAP metrics such as net income or any other performance measures derived in accordance with GAAP.
As of December 31, 2023, we had approximately 18.7 million members and 2,575 stores in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia. Of our 2,575 stores, 2,319 were franchised and 256 were corporate-owned.
As of December 31, 2024, we had approximately 19.7 million members and 2,722 clubs in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico, Australia and Spain. Of our 2,722 clubs, 2,445 were franchised and 277 were corporate-owned. As of December 31, 2024, we had contractual commitments to open approximately 900 new clubs.
As of December 31, 2023, we had contractual commitments to open approximately 1,000 new stores. 44 Table o f Contents Composition of Revenues, Expenses and Cash Flows Revenues We generate revenue from three primary sources: • Franchise segment revenue: Franchise segment revenue relates to services we provide to support our franchisees and includes royalties, NAF contributions, initial and successor franchise fees and upfront fees from ADAs, transfer fees, equipment placement revenue, membership join fees and other fees associated with our franchisee-owned stores.
Composition of Revenues, Expenses and Cash Flows Revenues We generate revenue from three primary sources: • Franchise segment revenue: Franchise segment revenue relates to services we provide to support our franchisees and includes royalties, contributions to our NAFs (“NAF revenue”), franchise fees, upfront fees from ADAs, transfer fees, equipment placement revenue, membership join fees and other fees associated with our franchisee-owned clubs.
In connection with the issuance of the Series 2022-1 Class A-2 Notes, the Master Issuer also issued the Series 2022-1 Class A-1 Notes, which allow for the drawing of up to $75 million of Variable Funding Notes, including a Letters of Credit facility, which was used to repay the 2018-1 Class A-1 Notes.
In February 2022, the Master Issuer also issued the Series 2022-1 Class A-1 Notes, which allow for the drawing of up to $75 million of Variable Funding Notes, including a letter of credit facility. The 2022 Variable Funding Notes are undrawn as of December 31, 2024.
(2) Timing of payments under tax benefit arrangements is estimated. (3) Advertising purchase commitments include commitments for the NAF. (4) Purchase obligations consists of open purchase orders primarily related to equipment to be sold to franchisees.
(2) Interest on long-term debt is based on the contractual interest rate through the anticipated repayment dates of the outstanding senior secured notes. (3) Timing of payments under tax benefit arrangements is estimated. (4) Advertising purchase commitments include commitments for the NAFs. (5) Purchase obligations consists of open purchase orders primarily related to equipment to be sold to franchisees.
The $8.5 million increase in franchise and other fees was primarily attributable to higher online join fees and a $2.7 million increase in placement revenue that was primarily driven by higher 56 Table o f Contents replacement equipment placements. Also included in franchise revenue was a $3.5 million increase in revenue associated with the sale of HVAC units to franchisees.
The $1.2 million increase in franchise and other fees was primarily attributable to an increase in PF Perks revenue and the $1.1 million increase in placement revenue was primarily driven by higher replacement equipment placements. Also impacting franchise revenue was a $1.4 million decrease in revenue associated with the sale of HVAC units to franchisees.
Of the $32.1 million increase in royalty revenue, $17.4 million was attributable to a franchise same store sales increase of 8.5%, $6.8 million was attributable to new stores opened since January 1, 2022 and $7.9 million was from higher royalties on annual fees.
Of the $25.5 million increase in royalty revenue, $13.9 million was attributable to a franchise same club sales increase of 5.2%, $6.2 million was attributable to new clubs opened since January 1, 2023 before 52 Table of Contents they move into the same club sales base and $5.4 million was from higher royalties on annual fees.
This increase was primarily due to the $46.4 million of higher franchise revenue and $11.9 million of higher NAF revenue as described above, partially offset by $4.0 million of higher NAF expense, $3.5 million of higher costs of HVAC units sold to franchisees, and $1.3 million of higher selling, general and administrative expense.
This increase was primarily due to higher franchise and NAF revenue of $26.4 million and $8.9 million, respectively, and $3.1 million of lower selling, general and administrative expense, partially offset by $8.9 million of higher NAF expense.
(1) $ 138,313 85,185 $ 1.62 Assumed exchange of shares (2) 8,722 3,735 Net income 147,035 Adjustments to arrive at adjusted income before income taxes (3) 121,533 Adjusted income before income taxes 268,568 Adjusted income taxes (4) 69,559 Adjusted net income $ 199,009 88,920 $ 2.24 Year Ended December 31, 2022 Net income attributable to Planet Fitness, Inc.
(1) $ 138,313 85,185 $ 1.62 Assumed exchange of shares (2) 8,722 3,735 Net income 147,035 Adjustments to arrive at adjusted income before income taxes (3) 121,533 Adjusted income before income taxes 268,568 Adjusted income taxes (4) 69,559 Adjusted net income $ 199,009 88,920 $ 2.24 (1) Represents net income attributable to Planet Fitness, Inc. and the associated weighted average shares of Class A common stock outstanding (see Note 15 to our consolidated financial statements included elsewhere in this form 10-K).
A reconciliation of net income per share, diluted, to Adjusted net income per share, diluted, is set forth below: (in thousands, except per share amounts) Net income Weighted Average Shares Net income per share, diluted Year Ended December 31, 2023 Net income attributable to Planet Fitness, Inc.
(11) Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc. 50 Table of Contents A reconciliation of net income per share, diluted, to Adjusted net income per share, diluted, is set forth below: (in thousands, except per share amounts) Net income Weighted Average Shares Net income per share, diluted Year Ended December 31, 2024 Net income attributable to Planet Fitness, Inc.

… 149 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−0 removed4 unchanged
Biggest changeInflation risk Given the recent rise in inflation rates in fiscal 2023 and 2022, there have been and may continue to be increases in shipping, labor and equipment costs which could impact our profitability and that of our franchisees.
Biggest changeInflation risk As a result of inflationary conditions, there have been and may continue to be increases in shipping, labor and equipment costs which could impact our profitability and that of our franchisees.
Although we do not believe that inflation has had a material effect on our income from continuing operations, we have a substantial number of hourly employees in our corporate-owned stores that are paid wage rates at or based on the applicable federal or state minimum wage. Any increases in these minimum wages will subsequently increase our labor costs.
Although we do not believe that inflation has had a material effect on our income from continuing operations, we have a substantial number of hourly employees in our corporate-owned clubs that are paid wage rates at or based on the applicable federal or state minimum wage. Any increases in these minimum wages will subsequently increase our labor costs.
Foreign exchange risk We are exposed to fluctuations in exchange rates, primarily those of the Canadian dollar, Mexican peso, and Australian dollar, which are the functional currencies of our Canadian, Mexican, and Australian entities, respectively. Our sales, costs and expenses of our foreign subsidiaries, when translated into U.S. dollars, can fluctuate due to exchange rate movement.
Foreign exchange risk We are exposed to fluctuations in exchange rates, primarily those of the Canadian dollar, Mexican peso, Australian dollar and Euro, which are the functional currencies of our Canadian, Mexican, Australian and Spanish entities, respectively. Our sales, costs and expenses of our foreign subsidiaries, when translated into U.S. dollars, can fluctuate due to exchange rate movement.
As of December 31, 2023, a 10% increase or decrease in the exchange rates of the U.S. dollar and foreign currencies to which we are exposed would increase or decrease net income by a negligible amount.
As of December 31, 2024, a 10% increase or decrease in the exchange rates of the U.S. dollar and foreign currencies to which we are exposed would increase or decrease net income by a negligible amount.
Long-term debt The securitized financing facility includes the Series 2018-1 Senior Class A-2-II Notes and the Series 2022-1 Senior Class A-2 Notes, which are comprised of fixed interest rate notes, and the 2022 Variable Funding Notes, which allow for the incurrence of up to $75.0 million in revolving loans and/or Letters of Credit under the 2022 Variable Funding Notes.
Long-term debt The securitized financing facility includes the Series 2022-1 Senior Class A-2 Notes and the Series 2024-1 Senior Class A-2 Notes, which are comprised of fixed interest rate notes, and the 2022 Variable Funding Notes, which allow for the incurrence of up to $75.0 million in revolving loans and/or Letters of Credit under the 2022 Variable Funding Notes.
As of December 31, 2023, the 2022 Variable Funding Notes remain undrawn, but the Company would be exposed to interest rate increases on any borrowings under the 2022 Variable Funding Notes.
As of December 31, 2024, the 2022 Variable Funding Notes remain undrawn, but the Company would be exposed to interest rate increases on any borrowings under the 2022 Variable Funding Notes.
A 100 basis point increase in the general level of U.S. interest rates relative to interest rates as of December 31, 2023 would decrease the fair value of our marketable security investments by approximately $1.0 million. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur.
A 100 basis point increase in the general level of U.S. interest rates relative to interest rates as of December 31, 2024 would decrease the fair value of our marketable security investments by approximately $1.3 million. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur.
As of December 31, 2023, we had investments in short and long-term marketable securities of $125.8 million, primarily consisting of commercial paper, corporate debt securities, U.S. treasury securities, and U.S. government agency securities, respectively.
As of December 31, 2024, we had investments in short and long-term marketable securities of $179.8 million, primarily consisting of commercial paper, corporate debt securities, U.S. treasury securities, and U.S. government agency securities, respectively.
We may or may not be able to offset cost increases in the future. 63 Table o f Contents
We may or may not be able to offset cost increases in the future.

Other PLNT 10-K year-over-year comparisons