Meeting Raises More Questions


LAS VEGAS — With slot machines ringing all around him, Ben Midgley walked through the lobby of the Rio All-Suite Hotel & Casino, talking with a reporter on his way to meet some prospective clients.

At the time, Midgley had spent only 30 days as the president of Planet Fitness and World Gym, Dover, NH, so life has been a little dizzying for the former sales executive at 24 Hour Fitness. At one point in the interview while Midgley was answering a question about the recent Planet Fitness acquisition of World Gym, he paused because he simply forgot the question. Maybe Las Vegas had something to do with that.

Earlier in the day on Sept. 6, Midgley was part of a panel of Planet Fitness/World Gym executives that met with franchisees of both Planet Fitness and World Gym clubs during an information forum at the Rio.

Planet Fitness bought World Gym last year for more than $10 million, taking ownership at the time of 300 World Gym clubs. Through August, the company had 170 Planet Fitnesses and 236 World Gyms, with franchise agreements with 40 more Planet Fitnesses and 25 more World Gyms. Since the purchase was finalized, efforts to homogenize World Gym under one look and logo have left some franchisees confused.

Midgley says it might take two or three years before the World Gym look and feel is more or less the same.

“I think the owners understand that we're 100 percent committed to them,” Midgley says. “There's got to be a lot of worries on their mind. A new company comes in and purchases their brand. It's going to affect their business one way or another. It's obvious to me that we need to do a lot more for the World owners. They have a lot of unanswered questions. We're going to do some work on that.”

In addition to Midgley, the panel of Planet Fitness executives sitting under both the Planet Fitness “thumbs up” logo and the new World Gym “W” logo in the Rio ballroom consisted of Mike Grondahl, CEO; Chris Rondeau, CEO of franchising for World Gym; Marc Grondahl, chief financial officer for Planet Fitness; and Mike Uretz, former CEO of World Gym who is now a consultant for the Planet Fitness/World Gym company. Alongside the panel were Planet Fitness franchisees who had switched over from World Gym.

Many of the questions raised during the forum dealt with the size and the pricing of clubs. Planet Fitness is famous for its low-end, $10-a-month membership. World Gym franchisees wondered if they needed to lower their membership to as low as $29 a month. Midgley told the owners that not every World Gym will be priced the same and that they will not be forced to lower their prices.

Manny Kaye, who owns a two-story, 16,600-square-foot World Gym in Monrovia, CA, came away from the forum with mixed feelings.

“I don't think anybody has any answers in details,” Kaye says. “Every time somebody did ask a question in detail, [Planet Fitness executives] said, ‘We're not sure. We'll look into it.’ There's no urgency from their end of it.”

Kaye, a former district manager for Bally Total Fitness, says even though he felt frustrated before finally meeting the Planet Fitness executives, he wouldn't be opposed to switching his World Gym to Planet Fitness.

“I'm a business guy at the end of the day,” Kaye says. “Let's not kid each other. The bottom line is we've got to make money.”

Joe Talmadge owns a 40,000-square-foot World Gym in the heart of San Francisco. Talmadge says he was a little disappointed with the forum but was pleased that franchisees and company executives at least came together and discussed their issues.

“I was hoping to have more of a substantive conversation,” Talmadge says. “It was somewhat informative, but not enough detail went into some of the responses of our questions. This is still a very transitional period. It's a relatively new marriage between the two branded companies, so I think things will shake out more definitively in the next six to 12 months.”

Rondeau says the forum exceeded his expectations.

“We had a lot of eye-opening happening,” Rondeau says. “We had a lot of questions that needed to be answered for people to hear in person. The biggest thing I wanted to accomplish was getting [World Gym owners] to all use the right vendor channels because even if we get them to do that, that in itself will start to create the uniformity of the brand.”

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