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Planet Fitness Acquires World Gym, The Minnow Swallows the Whale
(11/6/06) Planet Fitness recently acquired World Gym for more than $10 million. What does this portend for the health club industry? Is the no salespeople, no sales pressure, no ancillary revenue, no group fitness studio model the new one for ultimate success? Planet Fitness appears to be doing something right.
November 6, 2006 Dover, NH -- It's reminiscent of the PC revolution when in 1998 Compaq computer acquired DEC. It was preposterous to think that a PC company, a minnow, could turn around and swallow the whale with the longevity of DEC.

Yet a similar story just happened in the health club industry with no frills Planet Fitness acquiring World Gym in excess of $10 Million. The significance may be sending reverberations throughout the entire health club industry. Mike Grondahl, founder of Planet Fitness, stripped away unnecessary costs and excessive amenities to offer a new model for the times that has clearly gained traction.
"I believe that we will have the same sort of impact with World Gym that we've had with Planet Fitness by bringing in our creativity and new marketing systems. We're going to surprise a lot of people with what we're coming out with."
    -- Mike Grondahl, Founder, CEO of Planet
Planet Fitness
It's about the equipment. Planet Fitness strips away many amenities offered by standard health clubs, except for its equipment. In fact, they are developing group exercise programs around the equipment.
But don't call him a Fitness 19 or Cardinal fitness, "They're nothing more than a stripped-down old model, just at a low price. We been able to create a new model that works without any salespeople. A model that doesn't rely on ancillary revenues. It's not a sell, sell, sell type of model, it's a low-pressure model, the Planet Fitness model.

Grondahl's past success has been in his ability to attract people that are normally intimidated by standard health clubs. The concept is rather unique, there are no group fitness rooms, and no dumbbells over 80 pounds and no squat racks.
In fact on a list of rules, there is "No Grunting Allowed". Recently, a Planet Fitness in Wappingers Falls, New York, made the local news when it escorted a male bodybuilder member out of the club for grunting. It's not that the member was a surly sort, he was actually a corrections officer, but grunted once too often.

Planet Fitness has built a following by catering to what it calls the average person, with 80% of its members being first-time gym users. It has about 150 franchise and company-owned locations in 23 states. The clubs are open 24 hours, are roughly 15,000 ft.² in size and have 10 to 13 employees, including the cleaning staff.

A New Form of Group Fitness

When asked about group fitness, Grondahl responded that they do not have a group fitness studio, per se, but will organize group fitness around equipment. "It's like Curves, it's not your normal group exercise, we will develop programs based around equipment, as opposed to an instructor. When it is based around equipment, members can come and go as they please."

Planet Fitness has also begun incorporating 30-minute circuit areas within their gyms. Mike Grondahl told FitCommerce.com , "The one mistake everybody makes about Planet Fitness, is that they think we're just a 'low-priced model'. What we've been able to do is to create very efficient systems on the operations side of the game."

A Boost to World Gym Franchisees

"We've been able to develop great marketing systems that drive business without the need for salespeople. We can now bring our best practices on the marketing side of the game to World Gym. That could be the biggest advantage that we are going to be able to give the World Gym franchisees. They've always been lacking a clearly defined marketing program, " added Grondahl.

According to the company, World Gym franchisees will continue to operate their facilities as "World Gym" locations with all their programming and membership pricing in place. It will be a separate division.

Joe Gold (of the original Gold's Gym fame) founded World Gym in Santa Monica, California, in 1977 and built it into a highly successful gym franchise based on the old model of the 1980s. Now World Gym will be newly shaped into a grand strategy, where the family of gyms, both Planet Fitness and World Gym can exist side by side, and one day, members can even graduate from Planet to World. As Grondahl put succinctly, "The Planet Fitness-World Gym model will target the 20 to 45-year-old, non-family market. "

"We're not trying to change World Gym into Planet Fitness," he added. "We're taking best practices of Planet Fitness and putting it into World Gym."

Grondahl dismisses any concerns that the two brands might compete for the same members saying that the Planet Fitness brand is more of a suburban brand, where it has its roots from New Hampshire, while the World Gym brand is more "urban and edgy".

"I believe that we will have the same sort of impact with World Gym that we've had with Planet Fitness by bringing in our creativity and new marketing systems. We're going to surprise a lot of people with what we're coming out with, " he added.



Source: FitCommerce.com

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Reviews Write A Review
by L.Grant
customer service
Was out of town when i heard about the 99 dollar deal. When i returned home and called, was rudely told no exceptions.Wow!Being a small business owner i couldn't believe your customer service.I truly want to be a member of you gym, so i hope someone can fix this situation for me.It is only ONE day late!!!!!!!!!!!!
by Kristy Straka
Unhealthy Environment & False Come Ons
I signed up 5 employees on their plan of free tanning, free unlimited personal training, etc. I went in for the free unlimited personal training (ha!) They will set you up on a program and then every six weeks will discuss your progress. I particularly signed up for this gym and let my 24 hour fitness go that I had had for years because I needed a spotter due to joint inflamation. I thought the unlimited training was a great benefit (not!) Today I called to tan, I asked if I need my own goggles. The girl on 8th street said "I think I would because I can't guarantee ours are clean" I also asked "Well are your tanning beds clean" and she said that she can't guarantee that either" They don't have anyone to monitor their tanning beds and she said they relied on the members to clean them but that isn't working out so well (yuck!) Needless to say, I will be calling KRDO and the health department. The girl I spoke with said she also works at the health department and said she wishes I would because the corporate office needs to step up to the plate. This place is nasty
by Lucky
Planet fitness
Iv'e been getting angry just hearing about the rules at planet fitness as they are absurd in this day and age to tell people they can't make noise while lifting heavy?? or they can't drop a weight on a rubber floor ? btw both of which can actually save you from getting injuried in certain cases it sounds to me like a group of jealous insecure discriminating pin heads with serious self esteem issues run the company if my gym were to adopt any of those rules i would find another gym immediately. with what iv'e been reading i wouldn't be suprised if they all went under 5 years from now sounds like they would be a better fit for nazi germany they need to wake up this is 2008 and people won't put up with that kind of nonsense for long.
by Lucky
Planet fitness
Iv'e been getting angry just hearing about the rules at planet fitness as they are absurd in this day and age to tell people they can't make noise while lifting heavy?? or they can't drop a weight on a rubber floor ? btw both of which can actually save you from getting injuried in certain cases it sounds to me like a group of jealous insecure discriminating pin heads with serious self esteem issues run the company if my gym were to adopt any of those rules i would find another gym immediately. with what iv'e been reading i wouldn't be suprised if they all went under 5 years from now sounds like they would be a better fit for nazi germany they need to wake up this is 2008 and people won't put up with that kind of nonsense for long.
by Jeff L
They lie too
I experienced the same exact lines from the staff about changing the channel on the TVs. 2 days later, the TVs were on different channels. So, they lied to avoid having to do anything to make us happy. Then, 2 days later, the XM stereo in the club was changed to a rap/hiphop channel. I asked if they could put it on a less annoying (IMO) station. They said "Sorry, the station is set at the corporate office. We are unable to change it." Three days after that, the station was changed. (Am I supposed to believe that they removed the stereo receiver, and moved it to corporate HQ, when PF took over? Come on!)
by Kenny
Planet Fitness is not about Fitness
I'm a former Planet Fitness member in Colorado Springs. I joined when it was World Gym, and have suffered through the change to Planet Fitness. The first, and most ridiculous, change they made was to eliminate all classes. That includes spinning, aerobics, yoga, kick boxing, pilates and abs classes. What kind of "fitness" facility can justify eliminating these?! Total body fitness is about more than just lifting weights. (And, to replace them with tanning is just insulting.) Of course, for the loss of services, my monthly fee remained the same. I'm happy to say that I've quit Planet Fitness and have joined Gold's Gym, where they know what complete fitness is really about.
by Wishful man
Missed Opportunity
I remember working out with both Chris and Rondhal when Planet Fitness was a hole in the wall in Dover NH mills back in 1994. When they moved to the new location it was great. At the time, I was heavy into lifting and worked as a waiter. It was me and several other "night workers" that suggested they open 24 hours for us. In 1998, our wish came through. I still can't believe they grew so big in just 12 years!! Both the owner and CEO Chris are good guys and even allowed me to film a workout tape for a certification I was doing. I wish I had asked to work for them when they were on the gym floor shooting the crap with everyone. I was a well known member, being one of only three blacks that worked out at their gyms in New Hampshire. I was sad when they took out the heavy weights in 2001 since many of us were much too strong to use the light 80lbs dumbbells. Interesting enough both of these executives were hardcore lifters too, especially Chris. But, I take my hats off to two guys and his wife that took a piece of crap gym and built a small empire through vision and hard work. I am still a fan of the gym. And unlike Gold's and some others, they do not penalize you for leaving their gym. I had to buy my contract out from Gold's even though, I had not used the gym in months, because there were none in my new location. At least with Planet Fitness, they do not hassle you and they certainly do not sell you on two year memberships, knowing fully well that you will not probably workout that long being a newbie lifter.
by DB
Expect very little customer service. You'll get i
I live in Colorado Springs, CO. I called one of the local PF locations to yesterday morning and asked whether it would be possible to watch the Colorado Rockies play in the National League Championship Series game against the Diamondbacks (one playoff away from the World Series. I was assured by their staff that: Sure. It would not be-- any problem. So, with that reassurance and looking forward to a good run watching the Rockies I arrived at PF. It really went downhill from there. I went to the treadmill area and discovered no coverage of the Rockies game (again, this IS Colorado). I went to the receptionist/clerk who was totally clueless and could on say that it's their policy not to change the channel. I explained my previous conversation with the gym earlier that day. That completely fell on deaf ears. Her response was simply, "Well, we have rules to follow and I can't change the channel." I asked to speak to her supervisor. She told me, "They all went home at 5 and they're not available." I asked if we could call one of them. She responded, oddly, that she couldn't provide me with their phone number. I explained that I wanted HER to call a supervisor. No way. No channel change. Hey, the treadmill area wasn't even busy. I was left with the only option of leaving a note for her boss "Jeremy," which is what I did. I found this whole unpleasant episode to be a "10" in terms of poor customer service. I mean, the Colorado Rockies in the playoffs for the World Series and they cannot change a TV channel? Go figure. Bottom line: Don't expect much ... you'll get it. BTW, "Tim," the Asst. Mgr. called me back the next morning and simply reaffirmed that it's "Their policy" of not changing a channel. Thus, no judgment is involved. Way to go PF! Just lost me as a customer.
by DB
Expect very little customer service. You'll get i
I live in Colorado Springs, CO. I called one of the local PF locations to yesterday morning and asked whether it would be possible to watch the Colorado Rockies play in the National League Championship Series game against the Diamondbacks (one playoff away from the World Series. I was assured by their staff that: "Sure." It would not be "any problem." So, with that reassurance and looking forward to a good run watching the Rockies I arrived at PF. It really went downhill from there. I went to the treadmill area and discovered no coverage of the Rockies game (again, this IS Colorado). I went to the receptionist/clerk who was totally clueless and could on say that it's their "policy" not to change the channel. I explained my previous conversation with the gym earlier that day. That completely fell on deaf ears. Her response was simply, "Well, we have rules to follow and I can't change the channel." I asked to speak to her supervisor. She told me, "They all went home at 5 and they're not available." I asked if we could call one of them. She responded, oddly, that she couldn't provide me with their phone number. I explained that I wanted HER to call a supervisor. No way. No channel change. Hey, the treadmill area wasn't even busy. I was left with the only option of leaving a note for her boss "Jeremy," which is what I did. I found this whole unpleasant episode to be a "10" in terms of poor customer service. I mean, the Colorado Rockies in the playoffs for the World Series and they cannot change a TV channel? Go figure. Bottom line: Don't expect much ... you'll get it. BTW, "Tim," the Asst. Mgr. called me back the next morning and simply reaffirmed that it's "Their policy" of not changing a channel. Thus, no judgment is involved. Way to go PF! Just lost me as a customer.
by Colorado Gym User
Expect Poor Service ... and You Get It.
I live in Colorado Springs, CO. I called one of the local PF locations to yesterday morning and asked whether it would be possible to watch the Colorado Rockies play in the National League Championship Series game against the Diamondbacks (one playoff away from the World Series. I was assured by their staff that: "Sure." It would not be "any problem." So, with that reassurance and looking forward to a good run watching the Rockies I arrived at PF. It really went downhill from there. I went to the treadmill area and discovered no coverage of the Rockies game (again, this IS Colorado). I went to the receptionist/clerk who was totally clueless and could on say that it's their "policy" not to change the channel. I explained my previous conversation with the gym earlier that day. That completely fell on deaf ears. Her response was simply, "Well, we have rules to follow and I can't change the channel." I asked to speak to her supervisor. She told me, "They all went home at 5 and they're not available." I asked if we could call one of them. She responded, oddly, that she couldn't provide me with their phone number. I explained that I wanted HER to call a supervisor. No way. No channel change. Hey, the treadmill area wasn't even busy. I was left with the only option of leaving a note for her boss "Jeremy," which is what I did. I found this whole unpleasant episode to be a "10" in terms of poor customer service. I mean, the Colorado Rockies in the playoffs for the World Series and they cannot change a TV channel? Go figure. Bottom line: Don't expect much ... you'll get it. BTW, "Tim," the Asst. Mgr. called me back the next morning and simply reaffirmed that it's "Their policy" of not changing a channel. Thus, no judgment is involved. Way to go PF! Just lost me as a customer.
by Wayne Colorado Springs
A sad replacement for World Gym
World Gym in Colorado Springs recently converted to Planet Out and I'm not happy with the results so far. Nevertheless, I don't agree with the notion that Planet Out is for "those who have no real desire to get into shape," etc. Certainly, Planet Out is not for serious body builders. It is -- or could be -- a good and inexpensive place to get into better shape. The new equipment is decent, the locker rooms clean, etc. Having noted that, I am very unhappy with the atmosphere created at Planet Fitness. The "lunk alarm" is a bizarre, extremely ill mannered form of public ridicule. It's certainly hypocritical for a company that supposedly promotes a non-judgemental atmosphere. There's no reason why the management can't enforce their rules in a more courteous and civilized way -- talk to the person, explain that their behavior is, for example, disturbing other's, ask them to comply. If someone continues to exhibit genuinely obnoxious behavior (more than a couple of grunts), you can always kick them out. I also found that the weight scales have been removed from the locker rooms -- apparently to discourage judging people based on their size. Possibly well intended but rather silly and ineffectual. I am overweight and working to lose some of it. I want the scale for an accurate measurement of my progress. Frankly, if someone is going to judge me about my weight, it's more likely to be based on seeing my large stomach than watching while I weigh myself. Some of the rules seem absurd -- especially here in the West. No jeans?!!?
by World Gym FitChic CO Springs DMS
Being judged in PF Judgement Free Zone
For all of those who do not know, Planet Fitness is a bias company who appeals to those who have no real desire to get into shape. Rather they offer an enviroment where you will pay to do cardio, but will not be healthy. They offer pizza Monday's and Bagle Tuesday's. I have been a member of World Gym for 10 years, and have never stood in judgement the way PF has stood in judgement of me. If you have a tattoo, please cover it! No scarves covering your heads ladies. No muscle t-shirts gentlemen, and no muscles please. As a matter of fact no fitness. The marketing campaign is for those who have no interest in acheiving fitness. Planet Fitness?!?!? No! As my son states Planet Potato, for Potatoe Heads only. When I joined the gym I was inspired by those around me who were able to defy gentics and take their bodies to the next level. Future PF clients...good luck at that. Where there is no nutritional foundation there can be no real results. I love World Gym & Powerhouse, and I am so sad that my gym has been reduced to pizza and cardio. World Gym Colorado Springs is run by hypocrites, I hope you reap what you sow. Here's to the future of your business, see you on the otherside.
by Former Fatguy
Yes, PF does suck!
PF is bringing forth a sad day indeed... The rules and concept of PF make absolutely no sense. Those who actually exercise on a regular basis and know something about pushing themselves beyond their normal comfort level while exercising understand that heavy breathing and grunting are unavoidable. Now for the average person in this country (67% overweight and underactive), those things may be "annoying" and a "distraction" but that is obviously because they don't know any better. The people who complain about such things are usually the same ones who believe years on inactivity and bad eating habits can be erased overnight by taking some magic diet pills. In order to attain any type of significant results, the human body must be subjected to stresses which is it not used to. Now believe me, I detest annyoing and obnoxious gym patrons as much as anyone else, however I believe the easygoing atmosphere is not a good thing. Gyms were designed for working hard not socializing. Now many of you may disagree with me, but these words are coming from someone whose used be significantly overweight until I decided to stop making excuses. Yes, people looked at me. Yes, I felt uncomfortable at times. But the reality of the situation is, what people say about you doe not matter. You are at the gym for YOU not THEM! More than half of the people at the gym don't know what they are doing anyway, and yes that includes the "buff guys" and the "skinny girls" too. SO the moral of this story is... PF SUCKS!
by Dan Chalberg
No salespeople?
So are the people just suppose to sign up on a Planet Fitness type web site? Not a very good site at the moment, hard to believe you have no salespeople in the club, or do they just have a different title? At the prices Planet Fitness is charging, need a ton of members to make it work! Is price really the biggest factor for new people joining a club? Doesn't appear to be the fix for all the ind
by TR
Boo
Planet Fitness is all hype and no substance. Their locations are sterile, they do not have the needs of their members in mind, only appealing to those who don't workout and won't be exercising regularly. They only care about flipping $.
by Abie Berggren
It's a changing industry.
Mike Grohdahl will create a new model for World Gym and it will be effective and profitable. His thought process and ideas seem bizarre to most people in the industry because he thinks outside of the box, but he will be successful in this endeavor.
by BH
Elitest Concepts?
I laugh when I hear people say Planet Fitness "only caters to those who don't work out", like a gym should be just for those who do it all the time. This type of elitest thinking is what has made the typical gym buisness model miss the boat. The average person has never had an option in this market. Mike Grondahl gives the average person an option, and makes money too! I work out eve
by pissed off WG member
PF Sucks!
Planet Fitness recently convinced an Urban WG to transform into PF which they said was not their goal. All the members are pissed and looking for new gyms... Planet Fitness is 100& for people who know nothing about being fit! It's a sad day... PF needs to go away!
by Christahones
525LB Grunting Squat At PF & No Alarm
The entire Grunting Incident was a well executed PR stunt. Google it... Check out some character doing a 525LB Squat and grunting -Shhhh -- No Lunk Alarm here...the thumbs up at the end is priceless ... Copy and paste the link below into your browsers & turn the sound up. http://video.google.com/videoplay?docid=2248121835451382414&q=Planet+Fitness&hl=en
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