Planet Fitness, Inc.: The Budget Gym Flexing Its Muscles

Founded in 1992 in Dover, New Hampshire, Planet Fitness has grown into one of the most recognizable fitness brands in the world. It's a franchisor: roughly 90% of its 2,896 clubs are independently owned and operated, meaning the company collects royalties, fees, and mandatory equipment placements - combined with a membership model priced to reach consumers who have historically never held a gym membership. At the end of 2025, the group served approximately 20.8 million members across the United States, Canada, Australia, Mexico, Panama, and Spain, making it the largest gym operator in North America by membership count.

The structural drivers behind gym industry growth are well-established - rising chronic disease burden, cultural normalization of preventive health, growing employer wellness spending. The HVLP segment compounded at 9% annually from 2019 to 2024, while Premium Gyms, Studios, and Mid-Tier Gyms each contracted at -1% over the same period, against a total market CAGR of just 1%. 

The gym industry is not growing uniformly: it is consolidating around the value end, and Planet Fitness sits at the center of that shift. U.S. exercise equipment revenues grew from $4.5 billion in 2018 to $6.0 billion in 2025, forecast to reach $7.0 billion by 2029 — a tailwind that directly supports PLNT's Equipment segment, where franchisees are contractually required to purchase brand-approved gear for every new club and periodic refresh. Private equity has noticed: Leonard Green & Partners recently backed Crunch Fitness's expansion, and EoS Fitness is reportedly being shopped at $1+ billion, marking the sector's most active M&A cycle in a decade.

CEO Colleen Keating has organized the growth agenda around four vectors: deeper member engagement, accelerated new club openings (180–190 guided for 2026), corporate club portfolio optimization (including the 2025 sale of eight clubs to a franchisee for a $6.4M gain), and international expansion. A deliberate push into new media — partnerships with Netflix, Amazon Prime Video, Twitch, TikTok, Strava, Barstool Sports, and the New Heights and Call Her Daddy podcasts — signals a bid to reach younger audiences outside traditional advertising channels

Gen Z is the fastest-growing membership cohort, rising from approximately 5.1 million members in 2024 to 5.8 million in 2025, while Millennials remain the largest at roughly 6.8 million — together accounting for nearly 60% of total membership. Both cohorts have grown consistently since 2021, contrasting with the relatively flat Gen X and Baby Boomer bases, and signaling that Planet Fitness is successfully capturing younger consumers at the top of the funnel before competitors can.

The club network has grown at a 5.9% CAGR since 2020 — from 2,124 units to 2,795 by Q3 2025 — with the franchised share holding steady at 90% throughout, rising from 2,021 to 2,514 locations. Membership has compounded faster, at 9.4% annually, climbing from 13.5 million in 2020 to 20.7 million by Q3 2025. 

The Franchise segment (Q3 2025 at $4.68B) generates royalties on monthly membership billings plus annual fees and NAF contributions, with very low marginal cost, while the Corporate-Owned Clubs segment ($547M) provides direct operational exposure and serves as a living laboratory for brand and technology initiatives. Adjusted EBITDA has compounded at 11.8% annually since 2020 — growing from $119M to $536M by Q3 2025 — with margins expanding from 33% to 45% over the same period, while FCF tracked in lockstep, rising from $66M to $381M.

Revenue is projected to increase from $1.32B in 2025 to $1.66B by 2028, while EBITDA grows from $551.6M to $700.4M. Net income is also expected to rise steadily from $219M to $305M, with EBITDA margins remaining above 41% while FCF generation remains strong as well, reaching $355M by 2028 with improving FCF yield from 4.07% to 5.78%.

EV declines from $11.1B in 2025 to around $6.1B in 2028 estimates, causing valuation multiples such as EV/EBITDA to compress from 20.2x to 8.77x and P/E ratio from 41.4x to 13.3x. At the same time, leverage improves from 3.87x Debt/EBITDA in 2025 to 2.82x by 2028, while net debt gradually decreases.

Four risks stand out for 2026. First, membership growth deceleration: web traffic fell 7% in January 2026 — the brand's most important recruitment window — raising questions about whether the $15 price increase has begun pulling forward demand. Second, competitive pressure: Crunch's $9.99 entry tier undercuts PLNT by 33%, and fresh PE capital is accelerating its expansion into overlapping markets. Third, Spain — all corporate-owned, generating a $3.5M EBITDA drag in 2025 — remains an open-ended margin headwind depending on how long new international clubs take to mature. Fourth, leverage at 4.5x with $114M in guided 2026 net interest expense leaves limited cushion if revenue growth disappoints.

Planet Fitness has built a consumer brand that grows when the economy tightens, a franchise model that generates cash without deploying much capital, and a membership base that has expanded every year for over a decade. The challenges ahead are real: proving international markets, defending price in a more competitive HVLP landscape, and rebuilding investor confidence after a difficult stretch for the stock. Let’s see what the future holds for this fitness icon.