Planet Fitness (PLNT) risk factors, FY2025 10-K

Risks related to our business and industry

1. 01Our success depends substantially on the value of our brand
2. 02The high level of competition in the health, fitness and wellness industry could materially and adversely affect our business45% rewritten
3. 03If we are unable to anticipate and satisfy consumer preferences and shifting views of health and fitness, our business may be adversely affected
4. 04If we fail to obtain and retain high-profile strategic partnership arrangements, or if the reputation of any of our partners is impaired, our business may suffer
5. 05Our and our franchisees’ clubs may be unable to attract and retain members, which would materially and adversely affect our business, results of operations and financial condition
6. 06Our intellectual property rights, including trademarks, trade names, copyrights and trade dress, may be infringed, misappropriated or challenged by others
7. 07We and our franchisees rely heavily on information systems, and any material failure, interruption or weakness may prevent us from effectively operating our business and damage our reputation
8. 08Use of email marketing, mobile application and social media may adversely impact our reputation or subject us to fines or other penalties
9. 09If we fail to properly maintain the confidentiality and integrity of our data, including member credit card, debit card, bank account information and other personally identifiable information, our reputation and business could be materially and adversely affected75% rewritten
10. 10If we fail to successfully implement our growth strategy, which includes new club development by existing and new franchisees, our ability to increase our revenues and operating profits could be adversely affected
11. 11Our planned growth could place strains on our management, employees, information systems and internal controls, which may adversely impact our business
12. 12Changes in the industry could place strains on our management, employees, information systems and internal controls, which may adversely impact our business
13. 13If we cannot retain our key employees and hire additional highly qualified employees, we may not be able to successfully manage our businesses and pursue our strategic objectives
14. 14Economic, political and other risks associated with our international operations could adversely affect our profitability and international growth prospects
15. 15Our financial results are affected by the operating and financial results of, and our relationships with, our franchisees
16. 16Our franchisees could take actions that harm our business
17. 17Our franchise business model subjects us to a number of risks, any one of which may impact our revenues collected from our franchisees, may harm the goodwill associated with our brand, and may materially and adversely impact our business and results of operations
18. 18We and our franchisees could be subject to claims related to health and safety risks to members that arise while at both our corporate-owned and franchise clubs
19. 19Our business is subject to various laws and regulations and changes in such laws and regulations, or failure to comply with existing or future laws and regulations, could adversely affect our business80% rewritten
20. 20Regulatory restrictions placed on indoor tanning services and negative opinions about the health effects of indoor tanning services could harm our reputation and our business
21. 21Environmental, social and governance (ESG) issues may have an adverse effect on our business, financial condition and results of operations and damage our reputation
22. 22Changes in legislation or requirements related to electronic fund transfer, or our failure to comply with existing or future regulations, may materially and adversely impact our business
23. 23We are subject to a number of risks related to ACH, credit card, debit card, and digital payment options we accept33% rewritten
24. 24We are subject to risks associated with leasing property subject to long-term non-cancelable leases
25. 25If we and our franchisees are unable to identify and secure suitable sites for new franchise clubs, our revenue growth rate and profits may be negatively impacted
26. 26Opening new clubs in close proximity may negatively impact our existing clubs’ revenues and profitability
27. 27Our franchisees may incur rising costs related to construction of new clubs and maintenance of existing clubs, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition
28. 28Our dependence on a limited number of suppliers for equipment and certain products and services could result in disruptions to our business and could adversely affect our revenues and gross profit
29. 29The accounting treatment of goodwill, equity method investments and other long-lived assets could result in future asset impairments, which would reduce our earnings
30. 30Our adoption or non-adoption of artificial intelligence could result in an adverse impact on our performance or reputation or otherwise result in liability

Risks related to our indebtedness

1. 31Substantially all of the assets of certain of our subsidiaries are security under the terms of securitization transactions that were completed on August 1, 2018, December 3, 2019, February 10, 2022, June 12, 2024 and December 15, 2025
2. 32The securitization imposes certain restrictions on our activities or the activities of our subsidiaries
3. 33We will require a significant amount of cash to service our indebtedness. The ability to generate cash or refinance our indebtedness as it becomes due depends on many factors, some of which are beyond our control

Risks related to our organizational structure

1. 34We will be required to pay certain of our existing and previous owners for certain tax benefits we may claim, and we expect that the payments we will be required to make will be substantial
2. 35In certain cases, payments under the tax receivable agreements to our TRA Holders may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreements
3. 36We will not be reimbursed for any payments made to the TRA Holders under the tax receivable agreements in the event that any tax benefits are disallowed
4. 37Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations
5. 38Our ability to pay taxes and expenses, including payments under the tax receivable agreements, may be limited by our structure
6. 39In certain circumstances, Pla-Fit Holdings will be required to make distributions to us and the Continuing LLC Owners, and the distributions that Pla-Fit Holdings will be required to make may be substantial

Risks related to our Investment Portfolio

1. 40Our marketable debt securities portfolio is subject to credit, liquidity, market, and interest rate risks that could cause its value to decline and materially adversely affect our financial condition

Risks related to our Class A common stock

1. 41Provisions of our corporate governance documents could make an acquisition of our Company more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders
2. 42Our organizational structure, including the tax receivable agreements, confers certain benefits upon the TRA Holders and the Continuing LLC Owners that do not benefit Class A common stockholders to the same extent as it will benefit the TRA Holders and the Continuing LLC Owners55% rewritten
3. 43Our stock price could be extremely volatile, and, as a result, stockholders may not be able to resell shares at or above their purchase price
4. 44Because we do not currently pay any cash dividends on our Class A common stock, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it
5. 45We cannot guarantee that our share repurchase program will be fully consummated or that such program will enhance the long-term value of our share price35% rewritten
6. 46Financial forecasting may differ materially from actual results