Planet Fitness did not refuse new franchisees for ten years, whatever you may have read last week. An Entrepreneur rewrite that ran on Yahoo Finance on Sept. 9 said so in its headline. The Franchise Times story behind it, published Sept. 3, was more careful. It said the three development agreements Planet Fitness signed last month with Ian McClure, a Dallas hotel developer, "marked the first time in more than a decade that the franchisor opened ADAs to new franchisees who didn't join the system by way of acquisition."
The final clause is the story. Outsiders kept arriving all decade. They simply had to buy a seat from someone already at the table. Flynn Group got in that way in 2023, when it acquired Alder Partners and its 37 units. This spring it bought the 98 gyms of Grand Fitness Partners. What stayed closed was new territory, and new territory went to the incumbents.
I think that policy was right for most of the decade. I also think the reopening is the more important event, because it is the company conceding that the policy has stopped working. The evidence for both halves is in ten years of annual reports, not in last month's press release.
What the Closed Door Built and What It Cost
At the end of 2015, Planet Fitness had 1,124 locations, and 1,066 of them were run by about 200 franchisee groups. The largest group owned 49. By the end of 2025 the system had 2,896 clubs, about 2.6 times as many, built almost entirely by operators the company already knew.
It is hard to call that a mistake. A franchisor selling territory to groups that already run several clubs is selling to people whose results it can read in its own books. Before COVID many of them were opening faster than their agreements required. (Tom Fitzgerald, the interim CFO, recalled on the second-quarter call that "pre-COVID a number of folks were ahead of their ADAs.") Private equity followed the incumbents in: Alaris put $35 million into Ohana Growth Partners in 2014, when Ohana had 28 locations, and the money paid for 10 to 12 openings a year. A brand racing for the good strip centers needs builders who move quickly, and in those years the insiders did.
The same filings record the price. The roughly 200 franchisee groups of 2015 became about 130 by 2019 and 86 by the end of 2025. The largest operator went from 49 locations to 208. None of this is a scandal (large operators built most of Planet Fitness), but a franchisor that sells new territory only to incumbents, and admits strangers only when they buy an incumbent, will end up, by simple arithmetic, with fewer and larger operators every year.
The case against the closed door is that this arithmetic ends badly, and the industry has run that experiment. NPC International at one point operated nearly one in five Pizza Huts in the United States, and it went bankrupt. EYM Group collapsed. Big franchisees grow on borrowed money, and a system built on a handful of them inherits their balance sheets. I accept all of that. My answer is only that at Planet Fitness, for most of the decade, the concentration bought growth.
Lately it buys something else.
Flynn's 98 Grand Fitness gyms added no clubs to the system; they changed owners. Stan DeMartinis Jr., who runs Flynn's Planet Fitness business, said his team had looked at "probably 15 businesses" in the system over two and a half years. When the insiders have capital but would rather buy clubs than build them, keeping new territory reserved for them no longer buys speed.
Why Planet Fitness Is Selling to Outsiders Now
Chip Ohlsson, the chief development officer, gave Franchise Times the polite version: "There's a lot of other markets that we always identified and we always had intent on selling, but we wanted to see how the brand grew, where the brand grew and what our peer sets looked like." The numbers say more.
At the end of 2025 the committed pipeline stood at about 750 clubs, down from more than 1,000 a decade earlier, while the company's estimate of what the U.S. can support rose from over 4,000 to over 5,000. With about 2,900 clubs open worldwide (and fewer than that in the U.S.), that leaves room for at least 2,100 more by the company's own count. The operators already inside have signed up for about a third of it. Nor are they hurrying. Asked on the Aug. 6 call whether franchisees were ahead of schedule, Fitzgerald said "most folks are tracking to their ADAs, a couple might be slightly ahead." Tracking is respectable. It will not get anyone to 5,000.
This year supplied the urgency. On May 7 the shares fell 31.2% in one session, and the company cut its same-club sales guidance to about 1%. TD Cowen had already written that management "needs to move faster." The McClure release went out on the morning of Aug. 6, 80 minutes before the second-quarter call, where chief executive Colleen Keating called it "an important milestone and a clear signal of the momentum we are building behind disciplined, long-term system growth." The stock fell about 6.7% that day. (That is a great deal of weight to hang on one hotel developer.)
To its credit, the company said most of this in public last November. Its investor day deck promised a franchise sales function and "Smaller ADAs, shorter timeframes with local owner/operators." The same section reported that ADAs terminated during 2025 had been resold to incumbent franchisees. And the first outsider through the door runs a hotel company and oversees real estate firms with assets in 14 states, which makes him look more like the insiders than like a local owner-operator.
When an Insider-Only System Should Reopen
Other development leaders should study the warnings Planet Fitness had in hand before it acted. Its operators went from running ahead of their schedules to keeping pace with them. The signed pipeline shrank while the company's own estimate of the market grew, and the insiders' capital went into buying one another as the count of franchisee groups kept falling. Together they mean the incumbents have reached the edge of their appetite, and the brand is waiting on people who have told it, politely, how fast they intend to go. A brand that still won't sell to strangers at that point has to build the rest itself, and a system that is about 90% franchised was never going to do that.
Planet Fitness will file its next annual report early next year. The club count will be higher, as it always is. The number I would read first is the one that went from about 200 to 86. If it rises, the door McClure walked through is open to more than McClure. If it falls again, he was an exception with a press release, and the company is still waiting on insiders who have shown they would rather buy a market than build one.
