Planet Fitness Provides COVID-19 Response Update

Planet Fitness, one of the largest fitness franchisors, issued an updated COVID-19 response amid increasing restrictions. In its statement, Planet Fitness announced the withdraw of its 2020 outlook and a significant increase in its corporate cash reserves. The additional cash on hand could translate to franchisee assistance as coronavirus restrictions lift.

Extending Store Closures

The brand announced the temporary closure of all domestic and international Planet Fitness locations. This includes both corporate and franchise stores. In its statement, the company indicated it plans to follow governmental health officials’ guidance to determine when it will reopen its stores.

“The health and safety of our members, team members, and the communities we operate in is our top priority, and as such we are extending our temporary store closures until further notice,” commented Chris Rondeau, Chief Executive Officer of Planet Fitness.

Increasing Financial Flexibility

The company has increased an already significant cash reserve by drawing down $75 million under its revolving financing facility. With the drawdown, Planet Fitness has approximately $540 million in available cash on hand. The move, coupled with a share buyback suspension, was made to enhance the brand’s financial flexibility under the uncertain market conditions.

“We entered 2020 in a very strong financial position, and have taken additional steps to proactively strengthen our financial liquidity and flexibility during these unprecedented times. We believe we have sufficient liquidity to carry us well beyond the end of this year, even in the event that clubs remain closed for the rest of 2020. Given the significant near-term disruption to our business caused by COVID-19 and uncertainty around when conditions normalize, we have decided to withdraw our 2020 outlook at this time.” said Rondeau.

In its statement, the company announced the withdraw of its previously issued guidance for 2020.

COVID-19’s Impact On Businesses

Planet Fitness isn’t the only major franchise affected by the COVID-19. Small businesses all over America are being shut down as a result of state-mandated social distancing orders. All gyms across America have also been shut down consequently. Even gyms in most private communities and apartments have been closed to prevent the further spread of the virus.

The Quick Spread Across The Country

The very first case of coronavirus on American soil was reported on January 21, 2020, by the CDC. The patient had recently returned from Wuhan, China, the location where the novelty coronavirus is reportedly from. Since then, the virus has spread nationally breaching state borders rapidly reaching death tolls in the thousands.

At the time of writing, there are more than 457,035 reported coronavirus cases in the United States. Death toll now at 16,252, and likely to continue.

Supporting One Another

As stated by Chris Rondeau, CEO of Planet Fitness, the franchise will likely be able to weather the storm thanks to its cash reserve. Other businesses with similar luck are looking to return the favor and provide assistance in their local community or to frontline workers supporting their community.

Dickey’s Barbecue, a franchise operating in several states has issued a promise to provide 100,000 sandwiches to first responders.

Dutch Bros Coffee, a coffee franchise is also giving back and promises to donate 100% of their profit in April to support First Responders First, a non-profit organization providing supplies to frontline workers.

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