5 issues to find out about Planet Health

Planet Health, Inc. priced its preliminary public providing at $16 a share late Wednesday, the excessive finish of its steerage vary. The corporate bought 13.5 million shares to boost $216 million. Shares will begin buying and selling later Thursday on the New York Inventory Alternate below the image “PLNT.”

Planet Health gives a series of gyms and commonplace memberships for $10 a month. It says it has greater than 7 million members and is “one of many fastest-growing well being membership franchises within the U.S.”

The corporate is majority owned by private-equity agency TSG Shopper Companions.

Listed below are 5 issues to know earlier than it goes public:

1. Planet Health has very particular branding

With a mantra of being a health club for anybody and a spot with out judgment, Planet Health
  says it owns or has rights to very specific phrases it makes use of within the health club and its branding.

These embrace the plain “Planet Health” however prolong to motivational phrases equivalent to “No Lunks,” “No Gymtimidation” “Judgment Free Zone” and “You Belong.”

The shops additionally function an identical décor with purple and yellow, branded health club gear.

2. Membership prices are decrease

Planet Health prides itself on providing low-cost memberships, with a typical membership at $10 a month and higher-tier membership, with its PF Black Card, at a median of $19.99 a month. With that deal, the corporate is trying to entice the “occasional and first-time health club customers.”

The corporate says its member base consists of each high- and low-income households and is greater than 50% feminine.

However the $10 deal may be a technique to reel folks in. As a part of its progress technique, Planet Health goals to maneuver these members to its Black Card Membership, which has grown from 38% in 2010 to 55% in 2014.

3. The corporate has a half billion {dollars} of debt

In its submitting, Planet Health says it has “a considerable quantity of debt” at $506.4 million as of March 31, 2015. That debt requires massive curiosity funds and the corporate mentioned it may hamper progress.

Within the earlier quarter, Planet Health reported $76.9 million in income, above the $57.6 million it had within the year-earlier interval.

4. Franchise house owners are a key a part of the enterprise

Planet Health has 976 shops within the U.S., Puerto Rico and Canada. The vast majority of the shops, 919, are franchised, whereas 57 are corporate-owned. Moreover, the corporate expects the franchised-store house owners to drive progress of the corporate. It mentioned house owners have dedicated to opening greater than 1,000 new shops.

“We view our franchisees as strategic companions in increasing the Planet Health retailer base and model,” the submitting states.

This technique permits the corporate to develop quickly and acquire a “substantial portion” of its capital from royalties—a share of membership dues and charges—paid by franchisees.

However which means its income streams and progress, in addition to its model picture and skill to retain prospects will depend on the actions of third events.

“We acknowledge that our success will depend on a shared ardour with our franchisees for offering a particular retailer expertise primarily based on a judgement-free surroundings and an distinctive worth for our members,” the submitting states.

5. Planet Health may turn out to be a part of the tanning debate

Although Planet Health itself doesn’t spotlight tanning as a part of its predominant companies, the submitting states {that a} “overwhelming majority” of its areas have indoor tanning companies, significantly for its Black Card members. This can be good for now, however the submitting highlights that these tanning beds may turn out to be a blight for the corporate if extra detrimental publicity and opinions on tanning come up.

Adverse public opinion may additionally deliver a few drop in its Black Card memberships, it says.

If additional regulatory motion is taken by authorities businesses, Planet Health might have hefty fines to pay, the submitting states.

“The continuation of our tanning companies relies upon the general public’s sustained perception that the advantages of utilizing tanning companies outweigh the dangers of publicity to ultraviolet mild,” the submitting states.

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