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Planet to Expand with World

DOVER, NH — Planet Fitness and World Gym signed a purchase agreement last month for Planet Fitness to purchase World Gym's franchise operation, but final details were still being hammered out as of press time.

Assuming nothing occurs to stop the deal, Mike Grondahl, founder of Planet Fitness, and his team are putting in place support for the 300 World Gyms to be added to the 140 Planet Fitness clubs. Christopher Rondeau, CEO of Planet Fitness franchising, will become CEO of World Gym, and Mike Uretz, former CEO and president of World Gym, will work with the company, although his exact role was not stated.

First on the agenda? To rebrand World Gym, moving it away from its bodybuilder brand to a brand that has broader appeal, Grondahl says. The rebranding will include a new logo.

“We're going to take a great brand to the next level,” Grondahl says, adding that his company will also bring marketing expertise to World Gym franchisees who had to rely on marketing consultants in the past, something Grondahl says has kept World Gym from reaching its full potential.

Grondahl plans to keep Planet Fitness and World Gym as two separate divisions, allowing World Gym franchisees to continue offering group fitness and day care and to continue charging higher prices.

“We're not trying to change World Gym into Planet Fitness,” says Grondahl. “We're taking the best practices of Planet Fitness and putting it into World Gym.”

Even though World Gym licensees can continue as World Gym facilities, the facilities in suburban markets may want to switch to a Planet Fitness, Grondahl says, because he sees Planet Fitness clubs fitting into suburban markets and World Gyms fitting into urban areas. When World Gym licensees renew their licenses, they will not be required to switch to Planet Fitness.

“I believe there's enough of a market in certain areas where they both compete and there will be enough [members] for both,” Grondahl says about the possibility of competitition between the two brands. He sees the two brands working together as part of people's natural progression in fitness where they might start at a Curves, move to a Planet Fitness when they become more comfortable, and then move to a World Gym when they want group fitness and need child care.

For his part, Uretz says he's excited about the changes. “I'm more excited about this than anything else that I've done in my career,” he says. “They have the infrastructure and the wherewithal to add the things that all World Gym and all gym owners need to be successful. It'll be a wonderful opportunity for hundreds of gym owners.”

The deal has been in the works since last spring and was suggested by Roger Bates, co-founder of Frog's, formerly an athletic club in Southern California. He now has an area development agreement for California with Planet Fitness and knows both Uretz and Grondahl.

The World Gym deal won't be the last deal for Planet Fitness, Grondahl says. He has already entered into confidentiality agreements with two other club companies for possible purchases.

“You are going to be hearing a lot of noise from us,” Grondahl says, promising that one of the possible deals will “shock everyone.”

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