As one of the leading franchisors and operators of fitness centers in the United States, Planet Fitness (NYSE: PLNT) had quite the run of success up until the coronavirus pandemic forced the stock to drop 25% year to date. Planet Fitness' franchise business model is attractive to investors as long as the unit economics of individual locations generate favorable cash-on-cash returns. Not only does the company benefit from economies of scale as it relates to marketing spend, equipment purchases, and real estate acquisition, Planet Fitness also makes money by selling its intellectual property to franchisees. Read More...
Planet Fitness’ Unit Economics Show Signs of a Bright Future
As one of the leading franchisors and operators of fitness centers in the United States, Planet Fitness (NYSE: PLNT) had quite the run of success up until the coronavirus pandemic forced the stock to drop 25% year to date. Planet Fitness’ franchise business model is attractive to investors as long as the unit economics of individual locations generate favorable cash-on-cash returns. Not only does the company benefit from economies of scale as it relates to marketing spend, equipment purchases, and real estate acquisition, Planet Fitness also makes money by selling its intellectual property to franchisees.
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