PLANET FITNESS FRANCHISEE BULKS UP AFTER PANDEMIC
Enduring furloughs and capacity mandates, James Innocenti and PF Supreme are pivoting to expansion
It’s been a tough two years for fitness gyms, an industry hit hard in California by pandemic lockdowns and capacity limitations.
For Bronx native James Innocenti, the mandates meant closing dozens of Planet Fitness gyms in 2020, including 17 in Southern California. He furloughed 70% of his staff and, to stem the financial bloodletting, applied for federal bailout loans.
“It was not enough to really keep us afloat,” he recalled in a Zoom interview last week from Costa Mesa.
The Global Health Fitness Association estimates U.S. fitness gyms and studios lost nearly $30 billion in revenue during the pandemic. At least 1.5 million employees lost their jobs and 27% of fitness studios went out of business.
The low-cost Planet Fitness club is often found in communities with lower-income residents, Innocenti said, many of whom were greatly affected by job loss and the coronavirus.
Furloughing employees who came from those neighborhoods was one of his hardest pandemic days.
“It was a really tough conversation because we knew that they had families and themselves to support,” he said.
Closures, furloughs, capacity limits and new sanitation protocols all taught Innocenti’s franchise group, PF Supreme, how to pivot quickly. Today, instead of contraction, that means expanding and even taking advantage of pandemic failures. This month the group, which operates 76 gyms in four states, opened its newest club in Lake Forest, taking the place of a shuttered Crunch gym. Another Planet Fitness debuts this summer in Diamond Bar.
We spoke to Innocenti about the pandemic challenges and what he sees ahead. His answers have been edited for length.
Q
A lot has happened in the last two years. You were one of a few gym owners who actually closed while others did not, defying lockdown orders. Can you take me back to that time and what you were thinking?
A
Obviously, it was a very rough time we were all going through, but when the governor came out and said there was going to be some mandates
and health and fitness facilities were going to have to close down, we were all in because we are in the health and fitness industry.
This was a crisis. So, we understood it. We knew that it was going to be rough. We assumed it was only going to be for a short amount of time, just like everyone else did. So, we closed our doors. I think it was March of 2020, hoping that, just like everyone else, this would go through the process and then we would reopen in 30 days or something like that.
Unfortunately, it was a full year before we reopened.
QThat had to be a tough year for you guys. How many gyms did you have in California during the lockdown?
AWe probably had about 16 or 17 facilities. One that was just getting ready to open right before the lockdown. So yeah, it was really tough. We have gyms in other states, but you know, California was a rough one. In New York, we were closed for about six months. Hawaii, similar to that. Massachusetts, the same, but California was the one that was closed the longest.
QWhat did you tell your staff at the time? How hard was that conversation?
AIt was a very difficult conversation. We put our team members first before everything. We’re in a lot of communities that are real tough communities. And we usually hire from within that community.
So, unfortunately, we had to furlough most of our club-level team members. We kept on payroll about 30% of our workforce, and that’s probably from the general manager of the club all the way through our corporate offices.
QWere you able to apply for any of the loans the federal government was giving out? And if so, did they help?
AWe applied for the PPP loan and we did
receive it. We’re thankful for it. But it was not enough to really keep us afloat. We have our two biggest fixed costs, our labor … and our rent. And fortunately, we have really good relationships with our landlords. I think that the landlords really value us as a tenant and really look at us as long-term partners.
Unfortunately, 25% of gyms didn’t make it through COVID, but I think our landlords knew what we were doing and the way we run things. If there was anybody that was going to make it, it was going to be us.
QThe Lake Forest facility is going into a former Crunch fitness facility. So, was that a pandemic opportunity — that you were able to look at facilities that didn’t make it?
AThat’s exactly right. I believe they (Crunch) reopened after COVID but shortly after that, they just couldn’t make it. So we did look at that as somewhat of an opportunity to go in there. There’s definitely a hole in the area, especially with a facility closing like Crunch.
It’s tough, it left people without gyms, and we know how important that is, especially after the pandemic. So we had a situation where we were able to get in there and service members, and at least for that community, they have a fitness facility that came back.
QWhat were your customers telling you they wanted coming out of the pandemic?
AWell, I think there are a couple of things. There’s a lot of awareness now on health and fitness and wellness. A lot of people that we cater to are the casual fitness person who isn’t working out three or four times a week. People have very hectic lives, and it hasn’t been a priority. We’ve always had that philosophy and that kind of customer, even more so now.
With the awareness of health and fitness with everything that went on through the pandemic, we’re seeing a lot more people coming in. What we call “off the couch” and into the gym.
It’s been really exciting to see so many people who are trying out fitness for the first time come into the gyms. And that’s something that our facilities do — make it really comfortable for people to come in.