The sudden departure of Rondeau has raised numerous questions within and outside the company. It remains unclear what prompted this surprising move, particularly following the company’s robust performance in the second quarter, which exceeded market expectations. The abruptness of the decision is highlighted by the cancellation of two scheduled investor conference presentations earlier in the week.
Planet Fitness has taken swift action to stabilize the situation. Craig Benson, a former New Hampshire governor and a member of the company’s board, has been appointed as the interim CEO. Benson, a franchisee of both Planet Fitness and Dunkin’ Donuts, brings a wealth of experience to the role.
Chris Rondeau’s career at Planet Fitness spans an impressive 30 years, during which he ascended from a front desk position at the gym’s inaugural location in Dover, New Hampshire, to assume the role of CEO in 2013. Under his leadership, the company achieved significant milestones, including its successful IPO and a threefold increase in the number of Planet Fitness clubs, from around 700 to approximately 2,400 locations.
However, concerns have been mounting among investors regarding the company’s strategies concerning equipment and new franchises, critical elements for revenue generation. A notable instance was Rondeau’s announcement in August, where he scaled back the 2023 outlook for equipment placements in new franchisee stores to approximately 140, down from the initial projection of 160. Given that Planet Fitness derives a substantial portion of its revenue from selling fitness equipment to franchisees, this decision raised concerns.
Additionally, the company’s plans to open 600 new stores by 2025 faced challenges due to rising construction costs and escalating interest rates. This was further exacerbated by a decrease in suitable locations for the gyms, impacting the company’s ability to secure new leases.
The unexpected leadership change and the subsequent stock decline have left investors and stakeholders anxious about the company’s future direction. The fitness industry will be keenly watching how Planet Fitness navigates through this transitional period and addresses the concerns and uncertainties surrounding its growth and market performance.