PLANET FITNESS, INC., 10-K filed on 2/28/2020
Annual Report
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Cover Page - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2019
Feb. 21, 2020
Jun. 30, 2019
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2019    
Document Transition Report false    
Entity File Number 001-37534    
Entity Registrant Name PLANET FITNESS, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 38-3942097    
Entity Address, Address Line One 4 Liberty Lane West    
Entity Address, City or Town Hampton    
Entity Address, State or Province NH    
Entity Address, Postal Zip Code 03842    
City Area Code 603    
Local Phone Number 750-0001    
Title of 12(b) Security Class A common stock, $0.0001 Par Value    
Trading Symbol PLNT    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 6.1
Documents Incorporated by Reference
Portions of the Definitive Proxy Statement for the registrant’s 2020 Annual Meeting of Stockholders to be held April 30, 2020, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K.
 

   
Amendment Flag false    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001637207    
Current Fiscal Year End Date --12-31    
Class A Common Stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   78,564,051  
Class B Common Stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   8,531,920  
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Consolidated balance sheets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 436,256 $ 289,431
Restricted cash 42,539 30,708
Accounts receivable, net of allowance for bad debts of $111 and $84 at December 31, 2019 and 2018, respectively 42,268 38,960
Inventory 877 5,122
Prepaid expenses 8,025 4,947
Other receivables 9,226 12,548
Income tax receivable 947 6,824
Total current assets 540,138 388,540
Property and equipment, net 145,481 114,367
Right-of-use assets, net 155,633  
Intangible assets, net 233,921 234,330
Goodwill 227,821 199,513
Deferred income taxes 412,293 414,841
Other assets, net 1,903 1,825
Total assets 1,717,190 1,353,416
Current liabilities:    
Current maturities of long-term debt 17,500 12,000
Accounts payable 21,267 30,428
Accrued expenses 31,623 32,384
Equipment deposits 3,008 7,908
Deferred revenue, current 27,596 23,488
Payable pursuant to tax benefit arrangements, current 26,468 24,765
Other current liabilities 18,016 430
Total current liabilities 145,478 131,403
Long-term debt, net of current maturities 1,687,505 1,160,127
Deferred rent, net of current portion   10,083
Lease liabilities, net of current portion 152,920  
Deferred revenue, net of current portion 34,458 26,374
Deferred tax liabilities 1,116 2,303
Payable pursuant to tax benefit arrangements, net of current portion 400,748 404,468
Other liabilities 2,719 1,447
Total noncurrent liabilities 2,279,466 1,604,802
Commitments and contingencies (note 17)
Stockholders’ equity (deficit):    
Accumulated other comprehensive income 303 94
Additional paid in capital 29,820 19,732
Accumulated deficit (736,587) (394,410)
Total stockholders’ deficit attributable to Planet Fitness, Inc. (706,455) (374,574)
Non-controlling interests (1,299) (8,215)
Total stockholders’ deficit (707,754) (382,789)
Total liabilities and stockholders’ deficit 1,717,190 1,353,416
Class A Common Stock    
Stockholders’ equity (deficit):    
Common stock, value 8 9
Class B Common Stock    
Stockholders’ equity (deficit):    
Common stock, value $ 1 $ 1
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Consolidated balance sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Accounts receivable, allowance for bad debts $ 111 $ 84
Class A Common Stock    
Common stock, par value (in usd per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 300,000,000 300,000,000
Common stock, shares issued (in shares) 78,525,000 83,584,000
Common stock, shares outstanding (in shares) 78,525,000 83,584,000
Class B Common Stock    
Common stock, par value (in usd per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 100,000,000 100,000,000
Common stock, shares issued (in shares) 8,562,000 9,448,000
Common stock, shares outstanding (in shares) 8,562,000 9,448,000
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Consolidated statements of operations - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenue:                      
Total revenue $ 191,510 $ 166,815 $ 181,661 $ 148,817 $ 174,359 $ 136,656 $ 140,550 $ 121,333 $ 688,803 $ 572,898 $ 429,942
Operating costs and expenses:                      
Cost of revenue                 194,449 162,646 129,266
Store operations                 86,108 75,005 60,657
Selling, general and administrative                 78,818 72,446 60,369
National advertising fund expense                 50,153 42,619 0
Depreciation and amortization                 44,346 35,260 31,761
Other (gain) loss                 1,846 878 353
Total operating costs and expenses                 455,720 388,854 282,406
Income from operations 61,571 53,061 65,266 53,185 52,742 43,573 48,811 38,918 233,083 184,044 147,536
Other income (expense), net:                      
Interest income                 7,053 4,681 54
Interest expense                 (60,852) (50,746) (35,337)
Other income (expense), net                 (6,107) (6,175) 316,928
Total other expense, net                 (59,906) (52,240) 281,645
Income before income taxes                 173,177 131,804 429,181
Provision for income taxes                 37,764 28,642 373,580
Net income 34,255 29,692 39,827 31,639 28,779 20,472 30,418 23,493 135,413 103,162 55,601
Less net income attributable to non-controlling interests                 17,718 15,141 22,455
Net income attributable to Planet Fitness, Inc. $ 29,665 $ 25,777 $ 34,844 $ 27,409 $ 24,796 $ 17,471 $ 25,874 $ 19,880 $ 117,695 $ 88,021 $ 33,146
Class A Common Stock                      
Net income attributable to Planet Fitness, Inc.                      
Basic (usd per share) $ 0.37 $ 0.31 $ 0.41 $ 0.33 $ 0.29 $ 0.20 $ 0.30 $ 0.23 $ 1.42 $ 1.01 $ 0.42
Diluted (usd per share) $ 0.36 $ 0.31 $ 0.41 $ 0.32 $ 0.29 $ 0.20 $ 0.29 $ 0.23 $ 1.41 $ 1.00 $ 0.42
Weighted-average shares of Class A common stock outstanding:                      
Basic (shares)                 82,976,620 87,235,021 78,910,390
Diluted (shares)                 83,619,180 87,674,903 78,971,550
Franchise                      
Revenue:                      
Total revenue                 $ 223,139 $ 175,314 $ 131,983
Commission income                      
Revenue:                      
Total revenue                 4,288 6,632 18,172
National advertising fund revenue                      
Revenue:                      
Total revenue                 50,155 42,194 0
Corporate-owned stores                      
Revenue:                      
Total revenue                 159,697 138,599 112,114
Equipment                      
Revenue:                      
Total revenue                 $ 251,524 $ 210,159 $ 167,673
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Consolidated statements of comprehensive income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement of Comprehensive Income [Abstract]      
Net income including non-controlling interests $ 135,413 $ 103,162 $ 55,601
Net income including non-controlling interests      
Unrealized gain on interest rate caps, net of tax 0    
Unrealized gain on interest rate caps, net of tax   989 1,143
Foreign currency translation adjustments 209 (200) 26
Total other comprehensive income, net 209 789 1,169
Total comprehensive income including non-controlling interests 135,622 103,951 56,770
Less: total comprehensive income attributable to non-controlling interests 17,718 15,189 22,707
Total comprehensive income attributable to Planet Fitness, Inc. $ 117,904 $ 88,762 $ 34,063
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Consolidated statements of cash flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities:      
Net income $ 135,413 $ 103,162 $ 55,601
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 44,346 35,260 31,761
Amortization of deferred financing costs 5,454 3,400 1,935
Amortization of favorable leases and asset retirement obligations 237 375 334
Amortization and settlement of interest rate caps 0 1,170 1,755
Deferred tax expense 21,625 23,933 372,422
Loss (gain) on re-measurement of tax benefit arrangement 5,966 4,765 (317,354)
Provision for bad debts 87 19 (19)
(Gain) loss on disposal of property and equipment (159) 462 (159)
Loss on extinguishment of debt 0 4,570 79
Third party debt refinancing expense 0 0 1,021
Loss on reacquired franchise rights 1,810 360 0
Equity-based compensation 4,826 5,479 2,531
Changes in operating assets and liabilities:      
Accounts receivable (895) (1,923) (10,481)
Due from related parties (472) 3,598 (604)
Inventory 4,244 (2,430) (890)
Other assets and other current assets (3,198) 5,778 (2,981)
Accounts payable and accrued expenses (6,268) 14,506 4,210
Other liabilities and other current liabilities 1,687 (2,835) (470)
Income taxes 6,231 194 (3,027)
Payments pursuant to tax benefit arrangements (24,998) (30,493) (11,446)
Equipment deposits (4,900) 1,410 4,328
Deferred revenue 11,452 9,640 1,276
Deferred rent 1,823 3,999 1,199
Net cash provided by operating activities 204,311 184,399 131,021
Cash flows from investing activities:      
Additions to property and equipment (57,890) (40,860) (37,722)
Acquisitions of franchises (52,613) (45,752) 0
Proceeds from sale of property and equipment 109 196 680
Purchase of intellectual property (300) 0 0
Net cash used in investing activities (110,694) (86,416) (37,042)
Cash flows from financing activities:      
Proceeds from issuance of long-term debt 550,000 1,200,000 0
Proceeds from issuance of Class A common stock 2,863 1,209 480
Principal payments on capital lease obligations (93) (47) (22)
Repayment of long-term debt (12,000) (712,469) (7,185)
Payment of deferred financing and other debt-related costs (10,577) (27,133) (1,278)
Premiums paid for interest rate caps 0 0 (366)
Dividend equivalent paid to members of Pla-Fit Holdings (243) (957) (1,974)
Distributions to members of Pla-Fit Holdings (7,436) (8,300) (11,358)
Net cash provided by (used in) financing activities 64,348 109,920 (21,703)
Effects of exchange rate changes on cash and cash equivalents 691 (844) 411
Net increase in cash, cash equivalents and restricted cash 158,656 207,059 72,687
Cash, cash equivalents and restricted cash, beginning of period 320,139 113,080 40,393
Cash, cash equivalents and restricted cash, end of period 478,795 320,139 113,080
Supplemental cash flow information:      
Net cash paid for income taxes 10,001 5,016 3,722
Cash paid for interest 53,713 38,624 31,418
Non-cash investing activities:      
Non-cash additions to property and equipment 2,827 5,451 861
Class A Common Stock      
Cash flows from financing activities:      
Repurchase and retirement of Class A common stock $ (458,166) $ (342,383) $ 0
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Consolidated statement of changes in equity - USD ($)
$ in Thousands
Total
Accumulated other comprehensive income (loss)
Additional paid-in capital
Accumulated deficit
Non-controlling interests
Class A Common Stock
Class A Common Stock
Common Stock
Class B Common Stock
Class B Common Stock
Common Stock
Beginning balance (shares) at Dec. 31, 2016             61,314,000   37,185,000
Beginning balance at Dec. 31, 2016 $ (214,755) $ (1,174) $ 34,467 $ (164,062) $ (83,996)   $ 6   $ 4
Net income 55,601     33,146 22,455        
Equity-based compensation expense 2,531   2,565 (34)          
Repurchase and retirement of common stock (shares)                 (150,000)
Exchanges of Class B common stock (shares)             25,842,000   (25,842,000)
Exchanges of Class B common stock   (391) (54,042)   54,433   $ 3   $ (3)
Tax benefit arrangement liability and deferred taxes arising from secondary offerings and other exchanges 28,648   28,648            
Exercise of stock options and vesting of restricted share units (shares)             32,000    
Exercise of stock options and vesting of restricted share units 480   480            
Dividend paid to holders of Class A common stock 449     32 417        
Dividend equivalents paid or payable (11,060)     (48) (11,012)        
Distributions paid to members of Pla-Fit Holdings 1,169 917     252        
Other comprehensive loss 1,169                
Ending balance (shares) at Dec. 31, 2017             87,188,000   11,193,000
Ending balance at Dec. 31, 2017 (136,937) (648) 12,118 (130,966) (17,451)   $ 9   $ 1
Net income 103,162     88,021 15,141        
Equity-based compensation expense 5,479   5,482 (3)          
Repurchase and retirement of common stock (shares)           (824,312) (5,431,000)   (9,000)
Repurchase and retirement of common stock (342,383)   719 (342,383) (719)        
Exchanges of Class B common stock (shares)             1,736,000   (1,736,000)
Exchanges of Class B common stock   1 (3,067)   3,066        
Tax benefit arrangement liability and deferred taxes arising from secondary offerings and other exchanges 3,271   3,271            
Exercise of stock options and vesting of restricted share units (shares)             91,000    
Exercise of stock options and vesting of restricted share units 1,209   1,209            
Forfeiture of dividend equivalents 113     113          
Distributions paid to members of Pla-Fit Holdings (8,300)       (8,300)        
Cumulative effect adjustment (9,192)     (9,192)          
Other comprehensive loss 789 741     48        
Ending balance (shares) at Dec. 31, 2018           83,584,000 83,584,000 9,448,000 9,448,000
Ending balance at Dec. 31, 2018 (382,789) 94 19,732 (394,410) (8,215)   $ 9   $ 1
Net income 135,413     117,695 17,718        
Equity-based compensation expense 4,826   4,826            
Repurchase and retirement of common stock (shares)           (2,272,001) (6,086,000)    
Repurchase and retirement of common stock (458,166)   488 (458,165) (488)   $ (1)    
Exchanges of Class B common stock (shares)             886,000   (886,000)
Exchanges of Class B common stock     (1,172)   1,172        
Tax benefit arrangement liability and deferred taxes arising from secondary offerings and other exchanges $ 3,156   3,156            
Exercise of stock options and vesting of restricted share units (shares) 89,320           141,000    
Exercise of stock options and vesting of restricted share units $ 2,790   2,790            
Forfeiture of dividend equivalents 6     6          
Distributions paid to members of Pla-Fit Holdings (7,436)       (7,436)        
Non-cash adjustments to VIEs (4,050)       (4,050)        
Cumulative effect adjustment (1,713)     (1,713)          
Other comprehensive loss 209 209              
Ending balance (shares) at Dec. 31, 2019           78,525,000 78,525,000 8,562,000 8,562,000
Ending balance at Dec. 31, 2019 $ (707,754) $ 303 $ 29,820 $ (736,587) $ (1,299)   $ 8   $ 1
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Business organization
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business organization Business organization
Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with approximately 14.4 million members and 2,001 owned and franchised locations (referred to as stores) in all 50 states, the District of Columbia, Puerto Rico, Canada, the Dominican Republic, Panama, Mexico and Australia as of December 31, 2019.
The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:
Licensing and selling franchises under the Planet Fitness trade name;
Owning and operating fitness centers under the Planet Fitness trade name; and
Selling fitness-related equipment to franchisee-owned stores.
In 2012 investment funds affiliated with TSG Consumer Partners, LLC (“TSG”), purchased interests in Pla-Fit Holdings.
The Company was formed as a Delaware corporation on March 16, 2015 for the purpose of facilitating an initial public offering (the “IPO”) and related transactions in order to carry on the business of Pla-Fit Holdings, LLC and its subsidiaries (“Pla-Fit Holdings”). As of August 5, 2015, in connection with the recapitalization transactions, the Company became the sole managing member and holder of 100% of the voting power of Pla-Fit Holdings. Pla-Fit Holdings owns 100% of Planet Intermediate, LLC which has no operations but is the 100% owner of Planet Fitness Holdings, LLC, a franchisor and operator of fitness centers. With respect to the Company, Pla-Fit Holdings and Planet Intermediate, LLC, each entity owns nothing other than the respective entity below it in the corporate structure and each entity has no other material operations.
The Company is a holding company whose principal asset is a controlling equity interest in Pla-Fit Holdings. As the sole managing member of Pla-Fit Holdings, the Company operates and controls all of the business and affairs of Pla-Fit Holdings, and through Pla-Fit Holdings, conducts its business. As a result, the Company consolidates Pla-Fit Holdings’ financial results and reports a non-controlling interest related to the portion of Holdings Units not owned by the Company.
Secondary offerings
In March 2017, the Company completed a secondary offering (“March Secondary Offering”) of 15,000,000 shares of its Class A common stock at a price of $20.44 per share. All of the shares sold in the March Secondary Offering were offered by certain existing holders of Holdings Units and the Direct TSG Investors. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the participating holders of Holdings Units. The shares sold in the March Secondary Offering consisted of (i) 4,790,758 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 10,209,242 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the holders of Holdings Units that participated in the March Secondary Offering. Simultaneously, and in connection with the exchange, 10,209,242 shares of Class B common stock were surrendered by the holders of Holdings Units that participated in the March Secondary Offering and canceled. Additionally, in connection with the exchange, Planet Fitness, Inc. received 10,209,242 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings.
In May 2017, the Company completed a secondary offering (“May Secondary Offering”) of 16,085,510 shares of its Class A common stock at a price of $20.28 per share. All of the shares sold in the May Secondary Offering were offered by certain existing holders of Holdings Units and the Direct TSG Investors. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the participating holders of Holdings Units. The shares sold in the May Secondary Offering consisted of (i) 5,215,691 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 10,869,819 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the holders of Holdings Units that participated in the May Secondary Offering. Simultaneously, and in connection with the exchange, 10,869,819 shares of Class B common stock were surrendered by the holders of Holdings Units that participated in the May Secondary Offering and canceled. Additionally, in connection with the exchange, Planet Fitness, Inc. received 10,869,819 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings.
In addition to the secondary offering transactions described above, during the years ended December 31, 2019, 2018 and 2017, certain Continuing LLC Owners have exercised their exchange rights and exchanged 885,810, 1,736,020 and 4,762,943 Holdings Units, respectively, for 885,810, 1,736,020 and 4,762,943 newly-issued shares of Class A common stock, respectively. Simultaneously, and in connection with these exchanges, 885,810, 1,736,020 and 4,762,943 shares of Class B common stock were surrendered by the Continuing LLC Owners that exercised their exchange rights and canceled during the years ended December 31, 2019, 2018 and 2017, respectively. Additionally, in connection with these exchanges, Planet Fitness, Inc. received 885,810, 1,736,020 and 4,762,943 Holdings Units during the years ended December 31, 2019, 2018 and 2017, respectively, increasing its total ownership interest in Pla-Fit Holdings.
As of December 31, 2019, the Company held 100% of the voting interest, and approximately 90.2% of the economic interest in Pla-Fit Holdings and the Continuing LLC Owners held the remaining 9.8% economic interest in Pla-Fit Holdings. As future exchanges of Holdings Units occur, the economic interest in Pla-Fit Holdings held by Planet Fitness, Inc. will increase.
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Summary of significant accounting policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Summary of significant accounting policies Summary of significant accounting policies
(a) Basis of presentation and consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany balances and transactions have been eliminated in consolidation.
As discussed in Note 1, Planet Fitness, Inc. consolidates Pla-Fit Holdings. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.
The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”), PF Melville LLC (“PF Melville”), and Planet Fitness NAF, LLC (the “NAF”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. MMR and PF Melville are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs. The NAF is an advertising fund on behalf of which the Company collects 2% of gross monthly membership fees from franchisees, in accordance with the provisions of the franchise agreements, and uses the amounts received to increase sales and further enhance the public reputation of the Planet Fitness brand. See Note 4 for further information related to the NAF.
(b) Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.
(c) Concentrations
Cash and cash equivalents are financial instruments, which potentially subject the Company to a concentration of credit risk. The Company invests its excess cash in several major financial institutions, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company maintains balances in excess of these limits, but does not believe that such deposits with its banks are subject to any unusual risk.
The credit risk associated with trade receivables is mitigated due to the large number of customers, generally our franchisees, and their broad dispersion over many different geographic areas. We do not have any concentrations with respect to our revenues.
The Company purchases equipment, both for corporate-owned stores and for sales to franchisee-owned stores from various equipment vendors. For the year ended December 31, 2019, purchases from three equipment vendors comprised 48%, 35% and 12%, respectively, of total equipment purchases. For the year ended December 31, 2018 purchases from two equipment vendors comprised 76% and 13%, respectively, of total equipment purchases. For the year ended December 31, 2017 purchases from one equipment vendor comprised 91% of total equipment purchases.
The Company, including the NAF, uses various vendors for advertising services. For the year ended December 31, 2019, purchases from two vendors comprised 38% and 15%, respectively, of total advertising purchases. For the year ended December 31, 2018 purchases from one vendor comprised 65% of total advertising purchases, and for the year ended December 31, 2017 purchases from one vendor comprised 63% of total advertising purchases (see Note 4 for further discussion of the NAF).
(d) Cash, cash equivalents and restricted cash
The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash held within the NAF is recorded as a restricted asset (see Note 4).
In accordance with the Company’s securitized financing facility, certain cash accounts have been established in the name of Citibank, N.A. (the “Trustee”). The Company holds restricted cash which primarily represents cash collections held by the Trustee, which includes interest, principal, and commitment fee reserves. As of December 31, 2019, the Company had restricted cash held by the Trustee of $42,539. Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows.
(e) Revenue recognition
Revenue from Contracts with Customers
We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers (“ASC 606”), from ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, the “Previous Standards”) on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of Previous Standards. The $9,192 cumulative effect of our transition to ASC 606 is reflected as an adjustment to January 1, 2018 stockholders’ deficit (see Note 11).
Our transition to ASC 606 represents a change in accounting principle. ASC 606 eliminates industry-specific guidance and provides a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASC 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled in exchange for those goods or services.
Revenue Recognition Significant Accounting Policies under ASC 606
The Company’s revenues are comprised of franchise revenue, equipment revenue, and corporate-owned stores revenue.
Franchise revenue
Franchise revenues consist primarily of royalties, NAF contributions, initial and successor franchise fees and upfront fees from area development agreements (“ADAs”), transfer fees, equipment placement revenue, other fees and commission income. 
The Company’s primary performance obligation under the franchise license is granting certain rights to use the Company’s intellectual property, and all other services the Company provides under the ADA and franchise agreement are highly interrelated, not distinct within the contract, and therefore accounted for under ASC 606 as a single performance obligation, which is satisfied by granting certain rights to use our intellectual property over the term of each franchise agreement.
Royalties, including franchisee contributions to national advertising funds, are calculated as a percentage of franchise monthly dues and annual fees over the term of the franchise agreement. Under our franchise agreements, advertising contributions paid by franchisees must be spent on advertising, marketing and related activities. Initial and successor franchise fees are payable by the franchisee upon signing a new franchise agreement or successor franchise agreement, and transfer fees are paid to the Company when one franchisee transfers a franchise agreement to a different franchisee. Our franchise royalties, as well as our NAF contributions, represent sales-based royalties that are related entirely to our performance obligation under the franchise agreement and are recognized as franchise sales occur.
Additionally, under ASC 606, initial and successor franchise fees, as well as transfer fees, are recognized as revenue on a straight-line basis over the term of the respective franchise agreement. Under the Previous Standards, initial franchise fees were recognized as revenue when the related franchisees signed a lease and completed the Company’s new franchisee training. Successor franchise fees and transfer fees were recognized as revenue upon execution of a new franchise agreement. Our ADAs generally consist of an obligation to grant geographic exclusive area development rights. These development rights are not distinct from franchise agreements, so upfront fees paid by franchisees for exclusive development rights are deferred and apportioned to each franchise agreement signed by the franchisee. The pro-rata amount apportioned to each franchise agreement is accounted for identically to the initial franchise fee.
The Company is generally responsible for assembly and placement of equipment it sells to U.S. based franchisee-owned stores. Placement revenue is recognized upon completion and acceptance of the services at the franchise location.
The Company recognizes commission income from certain of its franchisees’ use of certain preferred vendor arrangements. Commissions are recognized when amounts have been earned and collectability from the vendor is reasonably assured.
Online member join fees are paid to the Company by franchisees for processing new membership transactions when a new member signs up for a membership to a franchisee-owned store through the Company’s website. These fees are recognized as revenue as each transaction occurs.
Billing transaction fees are paid to the Company by certain of its franchisees for the processing of franchisee membership dues and annual fees through the Company’s third-party hosted point-of-sale system and are recognized as revenue as they are earned.
Equipment revenue
The Company sells and delivers equipment purchased from third-party equipment manufacturers to U.S. based franchisee-owned stores.  Revenue is recognized upon transfer of control of ordered items, generally upon delivery to the customer, which is when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created. Franchisees are charged for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment revenue and freight costs are recorded within cost of revenue. In most instances, the Company recognizes equipment revenue on a gross basis as management has determined the Company to be the principal in these transactions. Management determined the Company to be the principal in the transaction because the Company controls the equipment prior to delivery to the final customer as evidenced by its pricing discretion over the goods, inventory transfer of title and risk of loss while the inventory is in transit, and having the primary responsibility to fulfill the customer order and direct the third-party vendor.
Corporate-owned stores revenue
The following revenues are generated from stores owned and operated by the Company.
Membership dues revenue
Customers are offered multiple membership choices varying in length. Membership dues are earned and recognized over the membership term on a straight-line basis.
Enrollment fee revenue
Enrollment fees are charged to new members at the commencement of their membership. The Company recognizes enrollment fees ratably over the estimated duration of the membership life, which is generally two years.
Annual membership fee revenue
Annual membership fees are annual fees charged to members in addition to and in order to maintain low monthly membership dues. The Company recognizes annual membership fees ratably over the 12-month membership period.
Retail sales
The Company sells Planet Fitness branded apparel, food, beverages, and other accessories. The revenue for these items is recognized at the point of sale.
Sales tax
All revenue amounts are recorded net of applicable sales tax.
Revenue Recognition Significant Accounting Policies under Previous Standards, prior to January 1, 2018 if different than under ASC 606
Franchise revenue
The following revenues are generated as a result of transactions with or related to the Company’s franchisees.
Area development fees
ADA fees collected in advance are deferred until the Company provides substantially all required obligations pursuant to the ADA. As the efforts and total cost relating to initial services are affected significantly by the number of stores opened in an area, the respective ADA is treated as a divisible contract. As each new site is accepted under an ADA, a franchisee signs a franchise operating agreement for the respective franchise location. As each store opened under an ADA typically has performance obligations associated with it, the Company recognizes ADA revenue as each individual franchise location is developed in proportion to the total number of stores to be developed under the ADA. These obligations are typically completed once the store is opened or the franchisee executes the individual property lease. ADAs generally have an initial term equal to the number of years over which the franchisee is required to open franchise stores, which is typically 5 to 10 years. There is no right of refund for an executed ADA. Upon default, as defined in the agreement, the Company may reacquire the rights pursuant to an ADA, and all remaining deferred revenue is recognized at that time.
Franchise fees and performance fees
Nonrefundable franchise fees are typically deferred until the franchisee executes a lease and receives initial training for the location, which is the point at which the Company has determined it has provided all of its material obligations required to recognize revenue. These amounts are included in deferred revenue on our consolidated balance sheets.
The individual franchise agreements typically have a 10-year initial term, but provide the franchisee with an opportunity to enter into successive renewals subject to certain conditions.
Transfer fees
The Company’s current franchise agreement provides that upon the transfer of a Planet Fitness store to a different franchisee, the Company is entitled to a transfer fee in the amount of the greater of $25, or $10 per store being transferred, if more than one, in addition to reimbursement of out-of-pocket expenses, including external legal and administrative costs incurred in connection with the transfer. Transfer-related fees and expenses are due, payable, and recognized at the time the transfer is effectuated.
Royalties
Royalties, which represent recurring fees paid by franchisees based on the franchisee-owned stores’ monthly and annual membership billings, are recognized on a monthly basis over the term of the franchise agreement. As specified under certain franchise agreements, the Company recognizes additional royalty fees as the franchisee-owned stores attain contractual monthly membership billing threshold amounts.
Equipment revenue
Equipment revenue is recognized upon the equipment being delivered to and assembled at each store and accepted by the franchisee. Franchisees are charged for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment revenue and freight costs are recorded within cost of revenue. The Company recognizes revenue on a gross basis in these transactions as management has determined the Company to be the principal in these transactions. Management determined the Company to be the principal because the Company is the primary obligor in these transactions, the Company has latitude in establishing prices for the equipment sales to franchisees, the Company has supplier selection discretion and is involved in determination of product specifications, and the Company bears all credit risk associated with obligations to the equipment manufacturers.
Equipment deposits are recognized as a liability on the accompanying consolidated balance sheets until delivery, assembly (if required), and acceptance by the franchisee.
(f) Deferred revenue
Subsequent to the adoption of ASC 606 franchise deferred revenue results from initial and successor franchise fees and ADA fees paid by franchisees, as well as transfer fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement and under the Previous Standard franchise deferred revenue represents cash received from franchisees for ADAs and franchise fees for which revenue recognition criteria has not yet been met. Deferred revenue is also recognized in our Corporate-owned stores segment for cash received from members for enrollment fees, membership dues and annual fees for the portion not yet earned based on the membership period under both ASC 606 and the Previous Standard.
(g) Cost of revenue
Cost of revenue consists primarily of direct costs associated with equipment sales (including freight costs) and the cost of retail merchandise sold in corporate-owned stores. Costs related to retail merchandise sales were immaterial in all periods presented.
Rebates from equipment vendors where the Company has recognized the related equipment revenue and costs are recorded as a reduction to the cost of revenue.
(h) Store operations
Store operations consists of the direct costs related to operating corporate-owned stores, including our store management and staff, rent expense, utilities, supplies, maintenance, and local advertising.
(i) Selling, general and administrative
Selling, general and administrative expenses consist of costs associated with administrative and franchisee support functions related to our existing business as well as growth and development activities. These costs primarily consist of payroll, IT related, marketing, legal and accounting expenses. These expenses include costs related to placement services of $7,063, $5,397, and $4,601, for the years ended December 31, 2019, 2018 and 2017, respectively.
(j) Accounts receivable
Accounts receivable is primarily comprised of amounts owed to the Company resulting from equipment, placement, and commission revenue. The Company evaluates its accounts receivable on an ongoing basis and may establish an allowance for doubtful accounts based on collections and current credit conditions. Accounts are written off as uncollectible when it is determined that further collection efforts will be unsuccessful. Historically, the Company has not had a significant amount of write-offs.
(k) Leases and asset retirement obligations
Topic 842 - Leases
We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), from ASC Topic 840, Leases (the “Previous Standard”) on January 1, 2019 using the effective date as our date of initial application. Our Financial Statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of Previous Standards. Upon transition to the new guidance on January 1, 2019, the Company recognized approximately $130,000 of operating lease liabilities. Additionally, the Company recorded ROU assets in a corresponding amount, net of amounts reclassified from other assets and liabilities, including deferred rent, tenant improvement allowances, and favorable lease assets, as specified by the new lease guidance. In connection with the election of the hindsight practical expedient related to reassessing lease terms for existing leases as of January 1, 2019, the Company recorded a cumulative transition adjustment of $1,713, net of tax, which is reflected as an adjustment to January 1, 2019 stockholders’ deficit.
Our transition to ASC 842 represents a change in accounting principle. The standard is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.
Significant Lease Accounting Policies under ASC 842
The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. We currently lease our corporate headquarters and all but one of our corporate-owned stores. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred.
Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
At the inception of each lease, we determine its appropriate classification as an operating or financing lease. The majority of our leases are operating leases. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease right of use (“ROU”) assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Notes.
The Company has an immaterial amount of non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the Previous Standard.
Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Lease Accounting Policies under Previous Standards, prior to January 1, 2019 if different than under ASC 842
The Company recognizes rent expense related to leased office and operating space on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, and is recorded as deferred rent in the Company’s consolidated balance sheets.
Asset retirement obligations
In accordance with ASC Topic 410, Asset Retirement and Environmental Obligations, the Company establishes assets and liabilities for the present value of estimated future costs to return certain leased facilities to their original condition. Such assets are depreciated on a straight-line basis over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs.
(l) Property and equipment
Property and equipment is recorded at cost and depreciated using the straight-line method over its related estimated useful life. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset, whichever is shorter. Upon sale or retirement, the asset cost and related accumulated depreciation are removed from the respective accounts, and any related gain or loss is reflected in the consolidated statements of operations. Ordinary maintenance and repair costs are expensed as incurred. The estimated useful lives of the Company’s fixed assets by class of asset are as follows:
 
 
Years
Buildings and building improvements
20–40
Information technology and systems
3-5
Furniture and fixtures
5
Leasehold improvements
Useful life or term of lease
whichever is shorter
Fitness equipment
5–7
Vehicles
5


(m) Advertising expenses
The Company expenses advertising costs as incurred. Advertising expenses, net of amounts reimbursed by franchisees, are included within store operations and selling, general and administrative expenses and totaled $13,749, $12,101, and $9,906 for the years ended December 31, 2019, 2018 and 2017, respectively. See Note 4 for discussion of the national advertising fund.
(n) Goodwill, long-lived assets, and other intangible assets
Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with ASC Topic 350, Intangibles—Goodwill and Other. In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; or (2) the intangible asset is separable. Intangibles are typically trade and brand names, customer relationships, noncompete agreements, reacquired franchise rights, and favorable or unfavorable leases. Transactions are evaluated to determine whether any gain or loss on reacquired franchise rights, based on their fair value, should be recognized separately from identified intangibles. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.
Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have an indefinite life are amortized over their estimated useful lives on either a straight-line or accelerated basis as deemed appropriate, and are reviewed for impairment when events or circumstances suggest that the assets may not be recoverable.
The Company performs its annual test for impairment of goodwill and indefinite lived intangible assets on December 31 of each year. For goodwill, the first step of the impairment test is to determine whether the carrying amount of a reporting unit exceeds the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, the Company would be required to perform a second step of the impairment test as this is an indication that the reporting unit’s goodwill may be impaired. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. Any impairment loss would be recognized in an amount equal to the excess of the carrying value of the goodwill over the implied fair value of the goodwill. The Company is also permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it need not perform the two-step impairment test.
For indefinite lived intangible assets, the impairment assessment consists of comparing the carrying value of the asset to its estimated fair value. To the extent that the carrying value exceeds the fair value of the asset, an impairment is recorded to reduce the carrying value to its fair value. The Company is also permitted to make a qualitative assessment of whether it is more likely than not an indefinite lived intangible asset’s fair value is less than its carrying value prior to applying the quantitative assessment. If based on the Company’s qualitative assessment it is not more likely than not that the carrying value of the asset is less than its fair value, then a quantitative assessment is not required.
The Company determined that no impairment charges were required during any periods presented.
The Company applies the provisions of ASC Topic 360, Property, Plant and Equipment, which requires that long-lived assets, including amortizable intangible assets, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment, then assets are required to be grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the undiscounted future net cash flows expected to be generated by the asset or asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no events or changes in circumstances that required the Company to test for impairment during any of the periods presented.
(o) Income taxes
The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the expected future tax consequences attributable to temporary differences between the carrying amount of the existing tax assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied in the years in which temporary differences are expected to be recovered or settled. The principal items giving rise to temporary differences are the use of accelerated depreciation and certain basis differences resulting from acquisitions and the recapitalization transactions. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Planet Fitness, Inc. is the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including Planet Fitness, Inc. following the recapitalization transactions, on a pro rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings. The Company is also subject to taxes in foreign jurisdictions.
The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see Note 16).
(p) Tax benefit arrangements
The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to certain existing and previous equity owners of Pla-Fit Holdings, LLC who are unaffiliated with TSG (the “TRA Holders”) 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class
A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings.
Based on current projections, the Company anticipates having sufficient taxable income to utilize these tax attributes and receive corresponding tax deductions in future periods. Accordingly, as of December 31, 2019 the Company has recorded a liability of $427,216 payable to the TRA Holders under the tax benefit obligations, representing approximately 85% of the calculated tax savings based on the original basis adjustments the Company anticipates being able to utilize in future years. Changes in the projected liability resulting from these tax benefit arrangements may occur based on changes in anticipated future taxable income, changes in applicable tax rates or other changes in tax attributes that may occur and impact the expected future tax benefits to be received by the Company. Changes in the projected liability under these tax benefit arrangements will be recorded as a component of other income (expense) each period. The projection of future taxable income involves significant judgment. Actual taxable income may differ from estimates, which could significantly impact the liability under the tax benefit arrangements and the Company’s consolidated results of operations.  
(q) Fair value
ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:
Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The carrying value and estimated fair value of long-term debt as of December 31, 2019 and December 31, 2018 were as follows:
 
 
December 31, 2019
 
December 31, 2018
 
 
Carrying value
 
Estimated fair value(1)
 
Carrying value
 
Estimated fair value(2)
Long-term debt
 
$
1,735,000

 
$
1,765,805

 
$
1,197,000

 
$
1,188,985

(1) The estimated fair value of our long-term debt is estimated primarily based on current bid prices for our long-term debt. Judgment is required to develop these estimates. As such, the fair value of our long-term debt is classified within Level 2, as defined under U.S. GAAP.

(r) Financial instruments
The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments.
(s) Derivative instruments and hedging activities
The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income, to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings.
The Company only enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis,
whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. See Note 10 for further information.
(t) Equity-based compensation
The Company has an equity-based compensation plan under which it receives services from employees and directors as consideration for equity instruments of the Company. The compensation expense is determined based on the fair value of the award as of the grant date. Compensation expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. The Company accounts for forfeitures as they occur by reversing compensation cost for unvested awards when the award is forfeited. See Note 14 for further information.
(u) Business combinations
The Company accounts for business combinations using the purchase method of accounting which results in the assets acquired and liabilities assumed being recorded at fair value.
The valuation methodologies used are based on the nature of the asset or liability. The significant assets and liabilities measured at fair value include property and equipment, intangible assets, including trade names, member relationships and re-acquired franchise rights, deferred revenue and favorable and unfavorable leases.
The fair value of trade and brand names is estimated using the relief from royalty method, an income approach to valuation, which includes projecting future system-wide sales and other estimates. Membership relationships and franchisee relationships are valued based on an estimate of future revenues and costs related to the respective contracts over the remaining expected lives. The valuation includes assumptions related to the projected attrition and renewal rates on those existing franchise and membership arrangements being valued. Re-acquired franchise rights are valued using an excess earnings approach. The valuation of re-acquired franchise rights is determined using an estimation of future royalty income and related expenses associated with existing franchise contracts at the acquisition date. For re-acquired franchise rights with terms that are either favorable or unfavorable (from the Company’s perspective) to the terms included in the Company’s current franchise agreements, a gain or charge is recorded at the time of the acquisition to the extent of the favorability or unfavorability, respectively. Favorable and unfavorable operating leases are recorded based on differences between contractual rents under the respective lease agreements and prevailing market rents at the lease acquisition date. Subsequent to the adoption of ASC 842 on January 1, 2019, these are recorded as a component of the ROU asset and prior to the adoption of ASC 842 were recorded as intangible assets. Deferred revenue is valued based on estimated costs to fulfill the obligations assumed, plus a normal profit margin. No deferred revenue amounts are recognized for enrollment fees in the Company’s business combinations as there is no remaining obligation.
The Company considers its trade and brand name intangible assets to have an indefinite useful life, and, therefore, these assets are not amortized but rather are tested for impairment annually as discussed above. Amortization of re-acquired franchise rights and franchisee relationships is recorded over the respective franchise terms using the straight-line method which the Company believes approximates the period during which the related benefits are expected to be received. Member relationships are amortized on an accelerated basis based on expected attrition. Favorable and unfavorable operating leases are amortized into rental expense over the lease term of the respective leases using the straight-line method.
(v) Guarantees
The Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Note 3 and Note 17 for further discussion of such obligations guaranteed.
(w) Contingencies
The Company records estimated future losses related to contingencies when such amounts are probable and estimable. The Company includes estimated legal fees related to such contingencies as part of the accrual for estimated future losses.
(x) Reclassifications
Certain amounts have been reclassified to conform to current year presentation.
(y) Recent accounting pronouncements
The FASB issued Accounting Standards Update (ASU) No. 2014-9, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. The Company adopted this new guidance in fiscal year 2018 utilizing the modified retrospective method. See above for revenue recognition policies and Note 11.
In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, Leases, in February 2016. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance requires lessees to recognize the assets and liabilities on the balance sheet for the rights and obligations created by leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Leases will be classified as finance or operating, with the classification affecting the pattern and classification of expense recognition within the income statement. The Company adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. See above for lease accounting policies and Note 7.
The FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, in August 2016. This guidance is intended to reduce diversity in practice of the classification of certain cash receipts and cash payments. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. The Company has adopted the guidance as of January 1, 2018 on a prospective basis, noting no material impact on its consolidated financial statements.
The FASB issued ASU No. 2017-4, Simplifying the Test for Goodwill Impairment, in January 2017. This guidance eliminates the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.
The FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, in August 2018. The guidance helps align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year, but allows for early adoption. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
v3.19.3.a.u2
Variable interest entities
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable interest entities Variable interest entities
The carrying values of VIEs included in the consolidated financial statements as of December 31, 2019 and December 31, 2018 are as follows:
 
December 31, 2019
 
December 31, 2018
 
Assets
 
Liabilities
 
Assets
 
Liabilities
PF Melville
$
2,682

 
$

 
$
4,787

 
$

MMR
$
2,206

 

 
$
3,563

 

Total
$
4,888

 
$

 
$
8,350

 
$


The Company also has variable interests in certain franchisees through the guarantee of certain lease agreements. The Company’s maximum obligation, as a result of its guarantees of leases, is approximately $10,309 and $732 as of December 31, 2019 and 2018, respectively.
The amount of the Company’s maximum obligation represents a loss that the Company could incur from the variability in credit exposure without consideration of possible recoveries through insurance or other means. In addition, the amount bears no relation to the ultimate settlement estimated to be incurred from the Company’s involvement with these entities, which is not material. In 2019, in connection with a real estate partnership, the Company began guaranteeing certain leases of its franchisees up to a maximum period of ten years, with earlier expiration dates if certain conditions are met.
v3.19.3.a.u2
National advertising fund
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
National advertising fund National advertising fund
On July 26, 2011, the Company established the NAF for the creation and development of marketing, advertising, and related programs and materials for all Planet Fitness stores located in the United States and Puerto Rico. On behalf of the NAF, the Company collects 2% of gross monthly membership billings from franchisees, in accordance with the provisions of the franchise agreements, which subsequent to the adoption of ASC 606 is reflected on January 1, 2018, is reflected as NAF revenue on the consolidated statements of operations (see Note 2 and Note 11). The Company also contributes 2% of monthly membership billings from stores owned by the Company to the NAF, which is reflected in store operations expense in the consolidated statements of operations. The use of amounts received by the NAF is restricted to advertising, product development, public relations, merchandising, and administrative expenses and programs to increase sales and further enhance the public reputation of the Planet Fitness brand. The Company consolidates and reports all assets and liabilities held by the NAF within the consolidated financial statements. Amounts received or receivable by NAF are reported as restricted assets and restricted liabilities within current assets and current liabilities on the consolidated balance sheets. Beginning in 2018 with the adoption of ASC 606, the Company records all revenues of the NAF within franchise revenue and all expenses of the NAF within the operating expenses on the consolidated statement of operations (see Note 2 and Note 11). The Company provides administrative services to the NAF and charges the NAF a fee for providing those services. These services include accounting, information technology, data processing, product development, legal and administrative support, and other operating expenses, which amounted to $2,177, $2,472 and $2,150 for the years ended December 31, 2019, 2018 and 2017, respectively. Beginning in the year ended December 31, 2018, subsequent to the adoption of ASC 606, the fees paid to the Company by the NAF are reflected as expense in the NAF expense line, and reflected as a corresponding reduction in general and administrative expenses in the consolidated statements of operations (see Note 2 and Note 11). For the year ended December 31, 2017 the fees paid to the Company by the NAF are included in the consolidated statements of operations as a reduction in general and administrative expense, where the expense incurred by the Company was initially recorded.
v3.19.3.a.u2
Acquisition
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Acquisition Acquisition
New Jersey Acquisition
On December 16, 2019, the Company purchased from one of its franchisees certain assets associated with twelve franchisee-owned stores in New Jersey for a cash payment of $37,812. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $1,810, which has been reflected in other operating costs in the statement of operations. The loss incurred reduced the net purchase price to $36,002. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment.
The preliminary purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
3,044

Reacquired franchise rights
9,480

Customer relationships
940

Favorable leases, net
1,508

Reacquired area development rights
90

Other assets
314

Goodwill
21,069

Liabilities assumed, including deferred revenues
(443
)
 
$
36,002


The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years.
The acquisition was not material to the results of operations of the Company.
Maine Acquisition
On May 30, 2019, the Company purchased from one of its franchisees certain assets associated with four franchisee-owned stores in Maine for a cash payment of $14,801. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment.
The purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
999

Reacquired franchise rights
6,740

Customer relationships
30

Unfavorable leases, net
(140
)
Other assets
78

Goodwill
7,239

Liabilities assumed, including deferred revenues
(145
)
 
$
14,801


The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years.
The acquisition was not material to the results of operations of the Company.
Colorado Acquisition
On August 10, 2018, the Company purchased from one of its franchisees certain assets associated with four franchisee-owned stores in Colorado for a cash payment of $17,249. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $10, which has been reflected in other operating costs in the statement of operations. The loss incurred reduced the net purchase price to $17,239. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment.
The purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
3,873

Reacquired franchise rights
4,610

Customer relationships
140

Favorable leases, net
80

Other assets
143

Goodwill
8,476

Liabilities assumed, including deferred revenues
(83
)
 
$
17,239


The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years.
The acquisition was not material to the results of operations of the Company.
Long Island Acquisition
On January 1, 2018, the Company purchased from one of its franchisees certain assets associated with six franchisee-owned stores in New York for a cash payment of $28,503. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $350, which has been reflected in other operating costs in the statement of operations. The loss incurred reduced the net purchase price to $28,153. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment.
The purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
4,672

Reacquired franchise rights
7,640

Customer relationships
1,150

Favorable leases, net
520

Reacquired area development rights
150

Other assets
275

Goodwill
14,056

Liabilities assumed, including deferred revenues
(310
)
 
$
28,153


The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years.
The acquisition was not material to the results of operations of the Company.
v3.19.3.a.u2
Property and equipment
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Property and equipment Property and equipment
Property and equipment as of December 31, 2019 and 2018 consists of the following: 
 
December 31, 2019
 
December 31, 2018
Land
$
1,341

 
$
1,341

Equipment
51,039

 
40,895

Leasehold improvements
97,977

 
76,832

Buildings and improvements
8,589

 
8,632

Furniture & fixtures
19,129

 
13,827

Information technology and systems assets
35,419

 
17,238

Other
2,192

 
1,593

Construction in progress
3,416

 
7,095

 
219,102

 
167,453

Accumulated Depreciation
(73,621
)
 
(53,086
)
Total
$
145,481

 
$
114,367


The Company recorded depreciation expense of $27,987, $19,540, and $13,886 for the years ended December 31, 2019, 2018 and 2017, respectively.
v3.19.3.a.u2
Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases Leases
The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred.
Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease ROU assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Notes.
The Company has certain non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the previous standard. These leases are immaterial, and therefore the Company has not included them in them in the tables below, except for their location on the consolidated balance sheet.
Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
For periods prior to January 1, 2019, the Company recognized rent expense related to leases on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, was recorded as deferred rent in the Company’s consolidated balance sheets.
Leases
 
Classification
 
December 31, 2019
Assets
 
 
 
 
Operating lease assets
 
Right of use asset, net
 
$
155,633

Finance lease assets
 
Property and equipment, net of accumulated depreciation
 
309

Total lease assets
 
 
 
$
155,942

 
 
 
 
 
Liabilities
 
 
 
 
Current:
 
 
 
 
Operating
 
Other current liabilities
 
$
16,755

Noncurrent:
 
 
 
 
Operating
 
Lease liabilities, net of current portion
 
152,920

Financing
 
Other liabilities
 
333

Total lease liabilities
 
 
 
$
170,008

 
 
 
 
 
Weighted-average remaining lease term (years) - operating leases
 
8.6

 
 
 
 
 
Weighted-average discount rate - operating leases
 
5.0
%


For the year ended December 31, 2019, the components of lease cost were as follows:
 
 
December 31, 2019
Operating lease cost
 
$
20,635

Variable lease cost
 
8,323

Total lease cost
 
$
28,958



Rental expense was $24,900 and $20,296 for the years ended December 31, 2018 and 2017, respectively.

The Company’s costs related to short-term leases, those with a duration between one and twelve months, were immaterial.

Supplemental disclosures of cash flow information related to leases were as follows:
 
 
December 31, 2019
Cash paid for lease liabilities
 
$
19,502

Operating assets obtained in exchange for operating lease liabilities
 
$
43,016



As of December 31, 2019, maturities of lease liabilities were as follows:
 
 
Amount
2020
 
$
24,756

2021
 
25,471

2022
 
25,709

2023
 
25,144

2024
 
23,077

Thereafter
 
88,141

Total lease payments
 
$
212,298

Less: imputed interest
 
42,290

Present value of lease liabilities
 
$
170,008



As of December 31, 2019, operating lease payments exclude approximately $19,235 of legally binding minimum lease payments for leases signed but not yet commenced.

As of December 31, 2018, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows:
 
Amount
2019
$
15,911

2020
15,219

2021
13,454

2022
12,561

2023
11,133

Thereafter
45,324

Total
$
113,602


Leases Leases
The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred.
Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease ROU assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Notes.
The Company has certain non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the previous standard. These leases are immaterial, and therefore the Company has not included them in them in the tables below, except for their location on the consolidated balance sheet.
Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
For periods prior to January 1, 2019, the Company recognized rent expense related to leases on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, was recorded as deferred rent in the Company’s consolidated balance sheets.
Leases
 
Classification
 
December 31, 2019
Assets
 
 
 
 
Operating lease assets
 
Right of use asset, net
 
$
155,633

Finance lease assets
 
Property and equipment, net of accumulated depreciation
 
309

Total lease assets
 
 
 
$
155,942

 
 
 
 
 
Liabilities
 
 
 
 
Current:
 
 
 
 
Operating
 
Other current liabilities
 
$
16,755

Noncurrent:
 
 
 
 
Operating
 
Lease liabilities, net of current portion
 
152,920

Financing
 
Other liabilities
 
333

Total lease liabilities
 
 
 
$
170,008

 
 
 
 
 
Weighted-average remaining lease term (years) - operating leases
 
8.6

 
 
 
 
 
Weighted-average discount rate - operating leases
 
5.0
%


For the year ended December 31, 2019, the components of lease cost were as follows:
 
 
December 31, 2019
Operating lease cost
 
$
20,635

Variable lease cost
 
8,323

Total lease cost
 
$
28,958



Rental expense was $24,900 and $20,296 for the years ended December 31, 2018 and 2017, respectively.

The Company’s costs related to short-term leases, those with a duration between one and twelve months, were immaterial.

Supplemental disclosures of cash flow information related to leases were as follows:
 
 
December 31, 2019
Cash paid for lease liabilities
 
$
19,502

Operating assets obtained in exchange for operating lease liabilities
 
$
43,016



As of December 31, 2019, maturities of lease liabilities were as follows:
 
 
Amount
2020
 
$
24,756

2021
 
25,471

2022
 
25,709

2023
 
25,144

2024
 
23,077

Thereafter
 
88,141

Total lease payments
 
$
212,298

Less: imputed interest
 
42,290

Present value of lease liabilities
 
$
170,008



As of December 31, 2019, operating lease payments exclude approximately $19,235 of legally binding minimum lease payments for leases signed but not yet commenced.

As of December 31, 2018, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows:
 
Amount
2019
$
15,911

2020
15,219

2021
13,454

2022
12,561

2023
11,133

Thereafter
45,324

Total
$
113,602


v3.19.3.a.u2
Goodwill and intangible assets
12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and intangible assets Goodwill and intangible assets
A summary of goodwill and intangible assets at December 31, 2019 and 2018 is as follows:
December 31, 2019
Weighted
average
amortization
period (years)
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net carrying
Amount
Customer relationships
11.0
 
$
174,033

 
(112,114
)
 
$
61,919

Reacquired franchise rights
8.0
 
37,660

 
(12,258
)
 
25,402

 
 
 
211,693

 
(124,372
)
 
87,321

Indefinite-lived intangible:
 
 
 
 
 
 
 
Trade and brand names
N/A
 
146,600

 

 
146,600

Total intangible assets
 
 
$
358,293

 
$
(124,372
)
 
$
233,921

Goodwill
 
 
$
227,821

 
$

 
$
227,821

 
December 31, 2018
Weighted
average
amortization
period (years)
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net carrying
Amount
Customer relationships
11.0
 
$
173,063

 
(99,439
)
 
$
73,624

Favorable leases
8.0
 
4,017

 
(2,345
)
 
1,672

Reacquired franchise rights
7.0
 
21,349

 
(8,615
)
 
12,734

 
 
 
198,429

 
(110,399
)
 
88,030

Indefinite-lived intangible:
 
 
 
 
 
 
 
Trade and brand names
N/A
 
146,300

 

 
146,300

Total intangible assets
 
 
$
344,729

 
$
(110,399
)
 
$
234,330

Goodwill
 
 
$
199,513

 
$

 
$
199,513


 
A rollforward of goodwill during the years ended December 31, 2019 or 2018 is as follows:
 
Franchise
 
Corporate-owned stores
 
Equipment
 
Total
As of December 31, 2017
16,938

 
67,377

 
92,666

 
176,981

Acquisition of franchisee-owned stores

 
22,532

 

 
22,532

As of December 31, 2018
16,938

 
89,909

 
92,666

 
199,513

Acquisition of franchisee-owned stores

 
28,308

 

 
28,308

As of December 31, 2019
16,938

 
118,217

 
92,666

 
227,821



In connection with the adoption of ASC 842, as of January 1, 2019, the Company has derecognized the favorable leases intangible asset, and the favorable leases balance is now included in the ROU asset, net balance (Note 7). The Company determined that no impairment charges were required during any periods presented, and the increase to goodwill was due to the acquisition of sixteen franchisee-owned stores in 2019 (Note 5).
Amortization expense related to the intangible assets totaled $16,359, $15,720, and $17,876 for the years ended December 31, 2019, 2018 and 2017, respectively. The anticipated annual amortization expense to be recognized in future years as of December 31, 2019 is as follows:
 
Amount
2020
$
16,845

2021
16,636

2022
16,728

2023
16,558

2024
14,067

Thereafter
6,487

Total
$
87,321


v3.19.3.a.u2
Long-term debt
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Long-term debt Long-term debt
Long-term debt as of December 31, 2019 and 2018 consists of the following:  
 
December 31, 2019
 
December 31, 2018
2018-1 Class A-2-I notes
$
567,813

 
$
573,563

2018-1 Class A-2-II notes
617,187

 
623,437

2019-1 Class A-2 notes
550,000

 

Total debt, excluding deferred financing costs
1,735,000

 
1,197,000

Deferred financing costs, net of accumulated amortization
(29,995
)
 
(24,873
)
Total debt
1,705,005

 
1,172,127

Current portion of long-term debt and Variable Funding Note
17,500

 
12,000

Long-term debt, net of current portion
$
1,687,505

 
$
1,160,127


 
On August 1, 2018, Planet Fitness Master Issuer LLC (the “Master Issuer”), a limited-purpose, bankruptcy remote, wholly-owned indirect subsidiary of Pla-Fit Holdings, LLC, entered into a base indenture and a related supplemental indenture (collectively, the “2018 Indenture”) under which the Master Issuer may issue multiple series of notes. On the same date, the Master Issuer issued Series 2018-1 4.262% Fixed Rate Senior Secured Notes, Class A-2-I (the “2018 Class A-2-I Notes”) with an initial principal amount of $575,000 and Series 2018-1 4.666% Fixed Rate Senior Secured Notes, Class A-2-II (the “2018 Class A-2-II Notes” and, together with the Class A-2-I Notes, the “2018 Notes”) with an initial principal amount of $625,000. In connection with the issuance of the 2018 Notes, the Master Issuer also entered into a revolving financing facility that allows for the issuance of up to $75,000 in Series 2018-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”), and certain letters of credit, all of which is currently undrawn. On December 3, 2019 the Master Issuer, issued Series 2019-1 3.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2019 Notes” and, together with the 2018 Notes, the “Notes”) with an initial principal amount of $550,000. The 2019 Notes were issued under the 2018 Indenture and a related supplemental indenture dated December 3, 2019 (together, the “Indenture”). Together the Notes and Variable Funding Notes will be referred to as the “Securitized Senior Notes”.
The Notes were issued in a securitization transaction pursuant to which most of the Company’s domestic revenue-generating assets, consisting principally of franchise-related agreements, certain corporate-owned store assets, equipment supply agreements and intellectual property and license agreements for the use of intellectual property, were assigned to the Master Issuer and certain other limited-purpose, bankruptcy remote, wholly-owned indirect subsidiaries of the Company that act as guarantors of the Senior Securitized Notes and that have pledged substantially all of their assets to secure the Senior Securitized Notes.
Interest and principal payments on the Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the 2018 Notes is in September 2048, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2018 Class A-2-I Notes will be repaid in September 2022 and the 2018 Class A-2-II Notes will be repaid in September 2025. The legal final maturity date of the 2019 Notes is in December 2049, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2019 Notes will be repaid in December 2029 (together, the “Anticipated Repayment Dates”). If the Master Issuer has not repaid or refinanced the Notes prior to the respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture.
The Variable Funding Notes will accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars, or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the Variable Funding Note agreement. There is a commitment fee on the unused portion of the Variable Funding Notes of 0.5% based on utilization. It is anticipated that the principal and interest on the Variable Funding Notes will be repaid in full on or prior to September 2023, subject to two additional one-year extensions. Following the anticipated repayment date (and any extensions thereof) additional interest will accrue on the Variable Funding Notes equal to 5.0% per year.
In connection with the issuance of the 2018 Notes and 2019 Notes, the Company incurred debt issuance costs of $27,133 and $10,577, respectively. The debt issuance costs are being amortized to “Interest expense” through the Anticipated Repayment Dates of the Notes utilizing the effective interest rate method.
The Securitized Senior Notes are subject to covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Securitized Senior
Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Securitized Senior Notes are in stated ways defective or ineffective, and (iv) covenants relating to recordkeeping, access to information and similar matters. The Securitized Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, certain manager termination events, an event of default, and the failure to repay or refinance the Notes on the applicable scheduled Anticipated Repayment Dates. The Securitized Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Securitized Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments.
In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee (the “Trustee”) for the benefit of the trustee and the noteholders, and are restricted in their use. The Company holds restricted cash which primarily represents cash collections held by the Trustee, interest, principal, and commitment fee reserves held by the Trustee related to the Securitized Senior Notes. As of December 31, 2019, the Company had restricted cash held by the Trustee of $42,539. Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows.
The proceeds from the issuance of the 2018 Notes were used to repay all amounts outstanding on the Term Loan B under the Company’s prior credit facility. As a result, the Company recorded a loss on early extinguishment of debt of $4,570 within interest expense on the consolidated statement of operations, primarily consisting of the write-off of deferred costs related to the prior credit facility. In connection with the repayment of the Term Loan B, the Company terminated the related interest rate caps with notional amounts totaling $219,837, which had been designated as a cash flow hedge. See Note 10 for more information on the interest rate caps.
On May 26, 2017, the Company amended the credit facility to reduce the applicable interest rate margin for term loan borrowings by 50 basis points, to LIBOR plus 300 basis points, with an additional 25 basis point reduction in applicable interest rate possible in the future so long as the Total Net Leverage Ratio (as defined in the credit agreement) is less than 3.50 to 1.00. The amendment to the credit agreement also reduced the interest rate margin for revolving loan borrowings by 25 basis points. In connection with the amendment to the credit agreement, in the year ended December 31, 2017, the Company capitalized deferred financing costs of $257, recorded expense of $1,021 related to certain third party fees included in other expense on the consolidated statement of operations, and a loss on extinguishment of debt of $79 included in interest expense on the consolidated statement of operations.
Future annual principal payments of long-term debt as of December 31, 2019 are as follows:  
 
Amount
2020
$
17,500

2021
17,500

2022
568,063

2023
11,750

2024
11,750

Thereafter
1,108,437

Total
$
1,735,000


v3.19.3.a.u2
Derivative instruments and hedging activities
12 Months Ended
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative instruments and hedging activities Derivative instruments and hedging activities
Prior to the August 1, 2018 refinancing transactions described in Note 9, the Company used interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments.
In order to manage the market risk arising from the previously outstanding term loans, the Company entered into a series of interest rate caps. As of December 31, 2019 and December 31, 2018, the Company had no interest rate cap agreements outstanding. In connection with the issuance of the 2018 Notes, the Company terminated the interest rate caps it had entered into in order to hedge interest expense on its previously outstanding term loans. During 2018, the Company recognized all unrealized gains and losses associated with its then-existing interest rate caps due to either termination or maturity. The Company recorded an increase to the
value of its interest rate caps of $1,143 net of tax of $280 for the year ended December 31, 2017 within other comprehensive income (loss).
v3.19.3.a.u2
Revenue recognition
12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenue recognition Revenue recognition
Revenue from Contracts with Customers
We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers (“ASC 606”), from ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, the “Previous Standards”) on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of Previous Standards. The $9,192 cumulative effect of our transition to ASC 606 is reflected as an adjustment to January 1, 2018 stockholders’ deficit.
Our transition to ASC 606 represents a change in accounting principle. ASC 606 eliminates industry-specific guidance and provides a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASC 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled in exchange for those goods or services.
Contract Liabilities

Contract liabilities consist of deferred revenue resulting from initial and successor franchise fees and ADA fees paid by franchisees, as well as transfer fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement. Also included are corporate-owned store enrollment fees, annual fees and monthly fees. We classify these contract liabilities as deferred revenue in our condensed consolidated balance sheets. The following table reflects the change in contract liabilities between December 31, 2018 and December 31, 2019,
 
Contract liabilities
Balance at December 31, 2018
$
49,862

Revenue recognized that was included in the contract liability at the beginning of the year
(25,600
)
Increase, excluding amounts recognized as revenue during the period
37,792

Balance at December 31, 2019
$
62,054



The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2019. The Company has elected to exclude short term contracts, sales and usage based royalties and any other variable consideration recognized on an “as invoiced” basis.
Contract liabilities to be recognized in:
 
Amount
2020
 
$
27,596

2021
 
3,748

2022
 
3,410

2023
 
3,310

2024
 
3,050

Thereafter
 
20,940

Total
 
$
62,054



The summary set forth below represents the balances in deferred revenue as of December 31, 2019 and 2018:
 
December 31, 2019
 
December 31, 2018
Prepaid membership fees
$
7,231

 
$
6,085

Enrollment fees
915

 
1,104

Equipment discount
3,796

 
3,855

Annual membership fees
12,185

 
10,142

Area development and franchise fees
37,927

 
28,676

Total deferred revenue
62,054

 
49,862

Long-term portion of deferred revenue
34,458

 
26,374

Current portion of deferred revenue
$
27,596

 
$
23,488


 
Equipment deposits received in advance of delivery as of December 31, 2019 and 2018 were $3,008 and $7,908, respectively and are expected to be recognized as revenue in the next twelve months.
Financial Statement Impact of Transition to ASC 606

As noted above, we transitioned to ASC 606 using the modified retrospective method on January 1, 2018. The cumulative effect of this transition to applicable contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to stockholders’ deficit as of that date. As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018:
 
As Reported December 31,
 
Total adjustments
 
Adjusted January 1,
 
2017
 
 
 
2018
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
113,080

 
$

 
$
113,080

Accounts receivable, net
37,272

 

 
37,272

Due from related parties
3,020

 

 
3,020

Inventory
2,692

 

 
2,692

Restricted assets – national advertising fund
499

 

 
499

Prepaid expenses
3,929

 

 
3,929

Other receivables
9,562

 

 
9,562

Other current assets
6,947

 

 
6,947

Total current assets
177,001

 

 
177,001

Property and equipment, net
83,327

 

 
83,327

Intangible assets, net
235,657

 

 
235,657

Goodwill
176,981

 

 
176,981

Deferred income taxes
407,782

 
3,285

 
411,067

Other assets, net
11,717

 

 
11,717

Total assets
$
1,092,465

 
$
3,285

 
$
1,095,750

Liabilities and stockholders’ equity (deficit)
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Current maturities of long-term debt
$
7,185

 
$

 
$
7,185

Accounts payable
28,648

 

 
28,648

Accrued expenses
18,590

 

 
18,590

Equipment deposits
6,498

 

 
6,498

Restricted liabilities – national advertising fund
490

 

 
490

Deferred revenue, current
19,083

 
(764
)
 
18,319

Payable pursuant to tax benefit arrangements, current
31,062

 

 
31,062

Other current liabilities
474

 

 
474

Total current liabilities
112,030

 
(764
)
 
111,266

Long-term debt, net of current maturities
696,576

 

 
696,576

Deferred rent, net of current portion
6,127

 

 
6,127

Deferred revenue, net of current portion
8,440

 
13,241

 
21,681

Deferred tax liabilities
1,629

 

 
1,629

Payable pursuant to tax benefit arrangements, net of current portion
400,298

 

 
400,298

Other liabilities
4,302

 

 
4,302

Total noncurrent liabilities
1,117,372

 
13,241

 
1,130,613

Stockholders’ equity (deficit):
 
 
 
 
 
Class A common stock
9

 

 
9

Class B common stock
1

 

 
1

Accumulated other comprehensive loss
(648
)
 

 
(648
)
Additional paid in capital
12,118

 

 
12,118

Accumulated deficit
(130,966
)
 
(9,192
)
 
(140,158
)
Total stockholders’ deficit attributable to Planet Fitness Inc.
(119,486
)
 
(9,192
)
 
(128,678
)
Non-controlling interests
(17,451
)
 

 
(17,451
)
Total stockholders’ deficit
(136,937
)
 
(9,192
)
 
(146,129
)
Total liabilities and stockholders’ deficit
$
1,092,465

 
$
3,285

 
$
1,095,750


Franchise Fees
The cumulative adjustment for franchise fees, including ADA fees, successor fees and transfer fees which will all be recognized over the franchise contract term consist of the following:
An increase in deferred revenue, net of $12,477 for the cumulative reversal and deferral of previously recognized fees related to franchise agreements in effect at January 1, 2018 that were entered into subsequent to the acquisition of Pla-Fit Holdings on November 8, 2012 by TSG Consumer Partners, LLC (the “2012 Acquisition”) (net of the cumulative revenue attributable for the period through January 1, 2018), with a corresponding decrease to Shareholders’ equity.
An increase to deferred income taxes, net of $3,285 for the tax effects of the adjustment noted above, with a corresponding increase to stockholders’ equity.

Comparison to Amounts if Previous Standards Had Been in Effect
The following tables reflect the impact of adoption of ASC 606 on our consolidated statements of operations for the year ended December 31, 2018, cash flows from operating activities for the year ended December 31, 2018 and our condensed consolidated balance sheet as of December 31, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”):
 
As reported for the year ended December 31, 2018
 
Total adjustments
 
Amounts under Previous Standards
Revenue:
 
 
 
 
 
Franchise
$
175,314

 
$
5,666

 
$
180,980

Commission income
6,632

 

 
6,632

National advertising fund revenue
42,194

 
(42,194
)
 

Corporate-owned stores
138,599

 

 
138,599

Equipment
210,159

 

 
210,159

Total revenue
572,898

 
(36,528
)
 
536,370

Operating costs and expenses:
 
 
 
 
 
Cost of revenue
162,646

 

 
162,646

Store operations
75,005

 

 
75,005

Selling, general and administrative
72,446

 

 
72,446

National advertising fund expense
42,619

 
(42,619
)
 

Depreciation and amortization
35,260

 

 
35,260

Other loss (gain)
878

 

 
878

Total operating costs and expenses
388,854

 
(42,619
)
 
346,235

Income from operations
184,044

 
6,091

 
190,135

Other expense, net:
 
 
 
 
 
Interest income
4,681

 

 
4,681

Interest expense
(50,746
)
 

 
(50,746
)
Other (expense) income
(6,175
)
 

 
(6,175
)
Total other expense, net
(52,240
)
 

 
(52,240
)
Income before income taxes
131,804

 
6,091

 
137,895

Provision for income taxes
28,642

 
1,437

 
30,079

Net income
103,162

 
4,654

 
107,816

Less net income attributable to non-controlling interests
15,141

 
642

 
15,783

Net income attributable to Planet Fitness, Inc.
$
88,021

 
$
4,012

 
$
92,033

Net income per share of Class A common stock:
 
 
 
 
 
Basic
$
1.01

 
 
 
$
1.06

Diluted
$
1.00

 
 
 
$
1.05


Consolidated Statement of Cash Flows
 
As reported December 31, 2018
 
Total adjustments
 
Amounts under Previous Standards
Cash flows from operating activities:
 
 
 
 
 
Net income
$
103,162

 
$
4,654

 
$
107,816

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
35,260

 

 
35,260

Amortization of deferred financing costs
3,400

 

 
3,400

Amortization of favorable leases and asset retirement obligations
375

 

 
375

Amortization of interest rate caps
1,170

 

 
1,170

Deferred tax expense
23,933

 

 
23,933

Loss (gain) on re-measurement of tax benefit arrangement
4,765

 

 
4,765

Provision for bad debts
19

 

 
19

Gain on disposal of property and equipment
462

 

 
462

Loss on extinguishment of debt
4,570

 

 
4,570

Third party debt refinancing expense

 

 

Loss on reacquired franchise rights
360

 

 
360

Equity-based compensation
5,479

 

 
5,479

Changes in operating assets and liabilities:

 
 
 

Accounts receivable
(1,923
)
 

 
(1,923
)
Due from related parties
3,598

 

 
3,598

Inventory
(2,430
)
 

 
(2,430
)
Other assets and other current assets
5,778

 

 
5,778

National advertising fund

 
(425
)
 
(425
)
Accounts payable and accrued expenses
14,506

 

 
14,506

Other liabilities and other current liabilities
(2,835
)
 

 
(2,835
)
Income taxes
194

 
1,437

 
1,631

Payments pursuant to tax benefit arrangements
(30,493
)
 

 
(30,493
)
Equipment deposits
1,410

 

 
1,410

Deferred revenue
9,640

 
$
(5,666
)
 
3,974

Deferred rent
3,999

 

 
3,999

Net cash provided by operating activities
$
184,399

 
$

 
$
184,399

Consolidated Balance Sheet
 
As reported December 31, 2018
 
Total adjustments
 
Amounts under Previous Standards
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
289,431

 
$

 
$
289,431

Restricted cash
30,708

 

 
30,708

Accounts receivable, net
38,960

 

 
38,960

Due from related parties

 

 

Inventory
5,122

 

 
5,122

Restricted assets – national advertising fund

 
425

 
425

Prepaid expenses
4,947

 

 
4,947

Other receivables
12,548

 

 
12,548

Income tax receivable
6,824

 
(1,437
)
 
5,387

Total current assets
388,540

 
(1,012
)
 
387,528

Property and equipment, net
114,367

 

 
114,367

Intangible assets, net
234,330

 

 
234,330

Goodwill
199,513

 

 
199,513

Deferred income taxes
414,841

 
(3,285
)
 
411,556

Other assets, net
1,825

 

 
1,825

Total assets
$
1,353,416

 
$
(4,297
)
 
$
1,349,119

Liabilities and stockholders’ equity (deficit)
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Current maturities of long-term debt
$
12,000

 
$

 
$
12,000

Accounts payable
30,428

 

 
30,428

Accrued expenses
32,384

 

 
32,384

Equipment deposits
7,908

 

 
7,908

Restricted liabilities – national advertising fund

 

 

Deferred revenue, current
23,488

 
118

 
23,606

Payable pursuant to tax benefit arrangements, current
24,765

 

 
24,765

Other current liabilities
430

 

 
430

Total current liabilities
131,403

 
118

 
131,521

Long-term debt, net of current maturities
1,160,127

 

 
1,160,127

Deferred rent, net of current portion
10,083

 

 
10,083

Deferred revenue, net of current portion
26,374

 
(18,448
)
 
7,926

Deferred tax liabilities
2,303

 

 
2,303

Payable pursuant to tax benefit arrangements, net of current portion
404,468

 

 
404,468

Other liabilities
1,447

 

 
1,447

Total noncurrent liabilities
1,604,802

 
(18,448
)
 
1,586,354

Commitments and contingencies (Note 17)
 
 
 
 
 
Stockholders’ equity (deficit):
 
 
 
 
 
Class A common stock
9

 

 
9

Class B common stock
1

 

 
1

Accumulated other comprehensive income
94

 

 
94

Additional paid in capital
19,732

 

 
19,732

Accumulated deficit
(394,410
)
 
13,391

 
(381,019
)
Total stockholders’ deficit attributable to Planet Fitness Inc.
(374,574
)
 
13,391

 
(361,183
)
Non-controlling interests
(8,215
)
 
642

 
(7,573
)
Total stockholders’ deficit
(382,789
)
 
14,033

 
(368,756
)
Total liabilities and stockholders’ deficit
$
1,353,416

 
$
(4,297
)
 
$
1,349,119


v3.19.3.a.u2
Related party transactions
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Related party transactions Related party transactions
Amounts due from related parties of $420 as of December 31, 2019 recorded within other receivables on the consolidated balance sheet relate to a potential indemnification reimbursement for an outstanding legal matter (see Note 17). The Company had $0 due to or from related parties as of December 31, 2018.
Activity with franchisees considered to be related parties is summarized below.  
 
For the Year Ended
December 31,
 
2019
 
2018
 
2017
Franchise revenue
$
2,341

 
$
3,179

 
$
2,130

Equipment revenue
3,333

 
3,977

 
3,464

Total revenue from related parties
$
5,674

 
$
7,156

 
$
5,594


 
Additionally, the Company had deferred ADA revenue from related parties of $256 and $779 as of December 31, 2019 and 2018, respectively.
The Company paid rent and lease termination costs for its former headquarters to MMC Fox Run, LLC, which was owned by Chris Rondeau, our CEO, and Marc Grondahl, a shareholder and former executive officer and former member of our board of directors, in the amount of $898, for the year ended December 31, 2017.
As of December 31, 2019 and 2018, the Company had $53,491 and $59,458, respectively, payable to related parties pursuant to tax benefit arrangements, see Note 16.
The Company provides administrative services to the NAF and charges the NAF a fee for providing those services. These services include accounting, information technology, data processing, product development, legal and administrative support, and other operating expenses, which amounted $2,177, $2,472 and $2,150 for the years ended December 31, 2019, 2018 and 2017, respectively.
A member of the Company’s board of directors, who is also a franchisee, holds an approximate 10.5% ownership of a company that sells amenity tracking compliance software to Planet Fitness stores to which the Company made payments of approximately $222 during the year ended December 31, 2019. As of December 31, 2019, the software was being utilized at 71 corporate-owned stores and approximately 520 franchise stores.
In the year ended December 31, 2019, the Company incurred approximately $190, which is included within selling, general and administrative expense on the consolidated statements of operations, for corporate travel to a third-party company which is affiliated with our Chief Executive Officer.
v3.19.3.a.u2
Stockholder's equity
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Stockholder's equity Stockholder’s equity
Pursuant to the exchange agreement between the Company and the Continuing LLC Owners, the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. In connection with any exchange of Holdings Units for shares of Class A common stock by a Continuing LLC Owner, the number of Holdings Units held by the Company is correspondingly increased as it acquires the exchanged Holdings Units, and a corresponding number of shares of Class B common stock are canceled.
March 2017 Secondary Offering
As described in Note 1, on March 14, 2017, the Company completed the March Secondary Offering of 15,000,000 shares of its Class A common stock at a price of $20.44 per share. All of the shares sold in the March Secondary Offering were offered by certain existing holders of Holdings Units and the Direct TSG Investors. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the participating holders of Holdings Units. The shares sold in the March Secondary Offering consisted of (i) 4,790,758 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 10,209,242 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the holders of Holdings Units that participated in the March Secondary Offering. Simultaneously, and in connection with the exchange, 10,209,242 shares of Class B common stock were surrendered by the holders of Holdings Units that participated in the March Secondary Offering and canceled. Additionally, in connection with the exchange, Planet Fitness, Inc. received 10,209,242 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings.
May 2017 Secondary Offering
As described in Note 1, on May 10, 2017, the Company completed the May Secondary Offering of 16,085,510 shares of its Class A common stock at a price of $20.28 per share. All of the shares sold in the May Secondary Offering were offered by certain existing holders of Holdings Units and the Direct TSG Investors. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the participating holders of Holdings Units. The shares sold in the May Secondary Offering consisted of (i) 5,215,691 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 10,869,819 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the holders of Holdings Units that participated in the May Secondary Offering. Simultaneously, and in connection with the exchange, 10,869,819 shares of Class B common stock were surrendered by the holders of Holdings Units that participated in the May Secondary Offering and canceled. Additionally, in connection with the exchange, Planet Fitness, Inc. received 10,869,819 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings.
Other Exchanges
In addition to the secondary offerings mentioned above, during the years ended December 31, 2019, 2018 and 2017, respectively, certain Continuing LLC Owners have exercised their exchange right and exchanged 885,810, 1,736,020 and 4,762,943 Holdings Units for 885,810, 1,736,020 and 4,762,943 newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, 885,810, 1,736,020 and 4,762,943 shares of Class B common stock were surrendered by the Continuing LLC Owners that exercised their exchange right and canceled in the years ended December 31, 2019 and 2018, respectively. Additionally, in connection with these exchanges, Planet Fitness, Inc. received 885,810, 1,736,020 and 4,762,943 Holdings Units, during the years ended December 31, 2019, 2018 and 2017 respectively, increasing its total ownership in Pla-Fit Holdings. Future exchanges of Holdings Units by the Continuing LLC Owners will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital on our consolidated balance sheets.
As a result of the recapitalization transactions, the IPO, completion of our secondary offerings, and other exchanges and equity activity, as of December 31, 2019:
the public investors collectively owned 78,524,624 shares of our Class A common stock, representing 90.2% of the voting power in the Company and, through the Company, 90.2% of the economic interest in Pla-Fit Holdings; and
the Continuing LLC Owners collectively hold 8,561,920 Holdings Units, representing 9.8% of the economic interest in Pla-Fit Holdings and 8,561,920 shares of our Class B common stock, representing 9.8% of the voting power in the Company;
Share repurchase programs
2018 share repurchase program
On August 3, 2018, our board of directors approved an increase to the total amount of the previously approved share repurchase program to $500,000.
On November 13, 2018, the Company entered into a $300,000 accelerated share repurchase agreement (the “2018 ASR Agreement”) with Citibank, N.A. (“Citibank”). Pursuant to the terms of the 2018 ASR Agreement, on November 14, 2018, the Company paid Citibank $300,000 upfront in cash and received 4,607,410 shares of the Company’s Class A common stock, which were retired, and the Company elected to record as a reduction to retained earnings of $240,000. Final settlement of the 2018 ASR Agreement occurred on April 30, 2019. At final settlement, Citibank delivered 524,124 additional shares of the Company’s Class A common stock, based on a weighted average cost per share of $58.46 over the term of the 2018 ASR Agreement, which were retired. This was evaluated as an unsettled forward contract indexed to our own stock, with $60,000 classified as a reduction to retained earnings at the original date of payment.
Additionally, during the years ended December 31, 2019 and 2018, the Company repurchased at market value and retired 2,272,001 and 824,312 shares of Class A common stock for a total cost of $157,945 and $42,090, respectively completing the 2018 share repurchase plan.
2019 share repurchase program
On November 5, 2019, our board of directors approved a share repurchase program of up to $500,000.
On December 4, 2019, the Company entered into a $300,000 accelerated share repurchase agreement (the “2019 ASR Agreement”) with JPMorgan Chase Bank, N.A. (“JPMC”). Pursuant to the terms of the 2019 ASR Agreement, on December 5, 2019, the Company paid JPMC $300,000 upfront in cash and received 3,289,924 shares of the Company’s Class A common stock, which were retired, and the Company elected to record as a reduction to retained earnings of $240,000. The final number of shares to be repurchased will be determined based on the volume-weighted average stock price of our common stock during the term of the
transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the 2019 ASR Agreement, and will also be retired upon delivery to us. This has been evaluated as an unsettled forward contract indexed to our own stock, with $60,000 classified as a reduction to retained earnings. Final settlement of the 2019 ASR Agreement is expected to be completed during the second quarter of 2020, although the settlement may be accelerated at JPMC’s option. At final settlement, JPMC may be required to deliver additional shares to the Company, or, under certain circumstances, the Company may be required to deliver shares of its Class A common stock or may elect to make a cash payment to JPMC. The 2019 ASR Agreement contains provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the 2019 ASR Agreement may be accelerated, extended or terminated early by JPMC and various acknowledgments, representations and warranties made by the parties to one another.
The timing of the purchases and the amount of stock repurchased is subject to the Company’s discretion and depends on market and business conditions, the Company’s general working capital needs, stock price, applicable legal requirements and other factors. Our ability to repurchase shares at any particular time is also subject to the terms of the Indenture governing the Securitized Senior Notes. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. Planet Fitness is not obligated under the program to acquire any particular amount of stock and can suspend or terminate the program at any time.
Dividends
The Company did not declare or pay any dividends during the years ended December 31, 2019, 2018, or 2017.
Preferred stock
The Company had 50,000,000 preferred stock shares authorized and none issued or outstanding for the years ended December 31, 2019 or 2018.
v3.19.3.a.u2
Equity-based compensation
12 Months Ended
Dec. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Equity-based Compensation Equity-based compensation
2013 Equity Incentive Plan
In 2013, the Company’s Board of Directors adopted the 2013 Equity Incentive Plan (the “2013 Plan”). Under the 2013 Plan, the Company granted awards in the form of Class M Units to certain employees and directors of the Company and its subsidiaries. The Class M Units received distributions (other than tax distributions) only upon a liquidity event, as defined, that exceeded a threshold equivalent to the fair value of the Company, as determined by the Company’s Board of Directors, at the grant date. Eighty percent of the awards vest over five years of continuous employment or service while the other twenty percent only vest in the event of an initial public offering of the Company’s common stock or that of its parent or one of its subsidiaries, subject to the holder of the Class M Units remaining employed or providing services on the date of such initial public offering. All awards include a repurchase option at the election of the Company for the vested portion upon termination of employment or service, and have a ten year contractual term. These awards are accounted for as equity at their fair value as of the grant date. In connection with the IPO and related recapitalization transactions, all of the outstanding Class M Units were converted into Holdings Units and shares of Class B common stock of Planet Fitness, Inc. in accordance with the terms of the awards. The Company’s IPO constituted a qualifying event under the terms of the awards and as a result 4,238,338 Holdings Units and corresponding shares of Class B common stock were issued to the existing Class M Unit holders with a weighted-average grant date fair value of $1.52 per share. The Company recorded $3, $21 and $152 of compensation expense in the years ended December 31, 2019, 2018 and 2017, respectively, related to these awards.
The fair value of each award was estimated on the date of grant using a Monte Carlo simulation model.  
A summary of unvested Holdings Unit activity is presented below:
 
Holdings Units
 
Weighted average grant date fair value
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Unvested outstanding at January 1, 2019
13,485

 
$
1.52

 
 
 
 
Units granted

 

 
 
 
 
Units forfeited

 
$
1.52

 
 
 
 
Units vested
(13,485
)
 
$
1.52

 
 
 
 
Unvested outstanding at December 31, 2019

 
$

 
0
 
$


The amount of total unrecognized compensation cost related to all awards under this plan was $0 as of December 31, 2019.
2015 Omnibus Incentive Plan
Stock Options
In August 2015, the Company adopted the 2015 Omnibus Incentive Plan (the “2015 Plan”) under which the Company may grant options and other equity-based awards to purchase up to 7,896,800 shares to employees, directors and officers. Generally, stock options awarded vest annually, on a tranche by tranche basis, over a period of four years with a maximum contractual term of 10 years.
The fair value of stock option awards granted were determined on the grant date using the Black-Scholes valuation model based on the following assumptions:
 
Year ended December 31,
 
2019
 
2018
Expected term (years)(1)
6.25

 
6.25 -6.5

Expected volatility(2)
28.0% - 28.5%


29.1% - 29.3%

Risk-free interest rate(3)
1.62% - 2.37%


2.61% - 2.88%

Dividend yield(4)
%
 
%
 
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
Based on an assumed a dividend yield of zero at the time of grant.

A summary of stock option activity for the year ended December 31, 2019
 
Stock Options
 
Weighted average
exercise price
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Outstanding at January 1, 2019
1,014,205

 
$
23.62

 
 
 
 
Granted
89,161

 
$
70.79

 
 
 
 
Exercised
(89,320
)
 
$
20.01

 
 
 
 
Forfeited
(56,921
)
 
$
48.69

 
 
 
 
Outstanding at December 31, 2019
957,125

 
$
26.86

 
7.4
 
$
45,777

Vested or expected to vest at December 31, 2019
957,125

 
$
26.86

 
7.4
 
$
45,777

Exercisable at December 31, 2019
439,362

 
$
20.74

 
7.0
 
$
23,699



The weighted-average grant date fair value of stock options granted during the year ended December 31, 2019 was $23.23. During the years ended December 31, 2019 and 2018, $2,089 and $3,316, respectively, was recorded to selling, general and administrative expense related to these stock options. As of December 31, 2019, total unrecognized compensation expense related to unvested stock options, was $2,236, which is expected to be recognized over a weighted-average period of 1.8 years.
Restricted stock units
During the year ended December 31, 2019, the Company granted 40,071 restricted Class A stock units (“RSUs”) under the 2015 Plan. RSUs granted to members of the Board of Directors vest on the first anniversary of the grant date, provided that the recipient continues to serve on the Board of Directors through the vesting dates. RSUs are also granted to certain employees of the Company and generally vest annually, on a tranche by tranche basis, over a period of four years. RSU awards are valued using the intrinsic value method. 
 
Restricted stock units
 
Weighted average
fair value
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Unvested outstanding at January 1, 2019
81,796

 
$
39.82

 
 
 
 
Granted
40,071

 
$
69.55

 
 
 
 
Vested
(27,979
)
 
$
44.43

 
 
 
 
Forfeited
(18,810
)
 
$
50.40

 
 
 
 
Unvested outstanding at December 31, 2019
75,078

 
$
51.32

 
1.8
 
$
5,607


During the years ended December 31, 2019 and 2018, $1,961 and $1,637, respectively, was recorded to selling, general and administrative expense related to these RSUs. As of December 31, 2019, total unrecognized compensation expense related to unvested RSUs was $2,033, which is expected to be recognized over a weighted-average period of 1.8 years.
Performance share units
During the year ended December 31, 2019, the Company granted 34,575 restricted Class A performance share units (“PSUs”) under the 2015 Plan. The awards are subject to a set of performance metrics that adjusts the quantity of awards earned from zero up to 200% of the original target quantity depending upon the Company’s results at the end of the three year performance period against the performance metrics. These awards cliff-vest three years from the date of grant, and the Company recognizes compensation expense ratably over the required service period based on its estimate of the number of shares will vest upon achieving the measurement criteria. If there is a change in the estimate of the number of shares that are probable of vesting, the Company will cumulatively adjust compensation expense in the period that the change in estimate is made.
 
Performance share units
 
Weighted average
fair value
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Unvested outstanding at January 1, 2019

 
$

 
 
 
 
Granted
34,575

 
$
70.67

 
 
 
 
Vested

 
$

 
 
 
 
Forfeited
(2,579
)
 
$
70.44

 
 
 
 
Unvested outstanding at December 31, 2019
31,996

 
$
70.69

 
2.3
 
$
1,544


During the years ended December 31, 2019, $355, was recorded to selling, general and administrative expense related to these RSUs. As of December 31, 2019, total unrecognized compensation expense related to unvested PSUs was $1,106, which is expected to be recognized over a weighted-average period of 2.3 years.
2018 Employee stock purchase plan
The 2018 Employee Stock Purchase Plan (the “ESPP”), as adopted by the Board of Directors in March 2018, allows eligible employees to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. The ESPP provides for six-month offering periods, and at the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s Class A common stock on the first trading day of the offering period or on the last day of the offering period. As of December 31, 2019, a total of 1,000,000 shares of common stock were authorized and available for the issuance of equity awards under the ESPP. During the year ended December 31, 2019, employees purchased 23,704 shares and $417 was recorded to expense related to the ESPP.
v3.19.3.a.u2
Earnings per share
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Earnings per share Earnings per share
Basic earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. for the years ended December 31, 2019, 2018, and 2017, by the weighted-average number of shares of Class A common stock outstanding during the same periods. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.
Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Planet Fitness, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common
stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Holdings Units, are exchangeable into shares of Class A common stock on a one-for-one basis.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:
 
Basic net income per share:
Year Ended December 31, 2019
 
Year Ended December 31, 2018
 
Year Ended December 31, 2017
Numerator
 
 
 
 
 
Net income
$
135,413

 
$
103,162

 
$
55,601

Less: net income attributable to non-controlling interests
17,718

 
15,141

 
22,455

Net income attributable to Planet Fitness, Inc. - basic & diluted
$
117,695

 
$
88,021

 
$
33,146

Denominator
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding - basic
82,976,620

 
87,235,021

 
78,910,390

Effect of dilutive securities:
 
 
 
 
 
Stock options
599,425

 
417,264

 
56,198

RSUs and PSUs
43,135

 
22,618

 
4,962

Weighted-average shares of Class A common stock outstanding - diluted
83,619,180

 
87,674,903

 
78,971,550

Earnings per share of Class A common stock - basic
$
1.42

 
$
1.01

 
$
0.42

Earnings per share of Class A common stock - diluted
$
1.41

 
$
1.00

 
$
0.42


 
Weighted average shares of Class B common stock of 8,739,015, 10,275,077 and 19,483,737 for the years ended December 31, 2019, 2018 and 2017, respectively, were evaluated under the if-converted method for potential dilutive effects and were determined to be anti-dilutive. Weighted-average stock options outstanding of 57,273, 143,006 and 489,133 for the years ended December 31, 2019, 2018 and 2017, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. Weighted average restricted stock units outstanding of 755, 131 and 1,829, for the year ended December 31, 2019, 2018 and 2017, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive.
v3.19.3.a.u2
Income taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
Income before the provision for income taxes as shown in the accompanying consolidated statements of operations is as follows:
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
Domestic
$
171,970

 
$
128,861

 
$
426,873

Foreign
1,207

 
2,943

 
2,308

Total income before the provision for income taxes
173,177

 
131,804

 
429,181


 
The provision (benefit) for income taxes consists of the following:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
Federal
$
7,359

 
$
178

 
$
(2,600
)
State
8,280

 
3,586

 
2,941

Foreign
500

 
945

 
817

Total current tax expense
16,139

 
4,709

 
1,158

Deferred:
 
 
 
 
 
Federal
23,289

 
22,757

 
365,470

State
(1,346
)
 
946

 
6,857

Foreign
(318
)
 
230

 
95

Total deferred tax expense
21,625

 
23,933

 
372,422

Provision for income taxes
$
37,764

 
$
28,642

 
$
373,580



The Company is the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and certain state and local income taxes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings. The Company is also subject to taxes in certain foreign jurisdictions.
On December 22, 2017, the 2017 Tax Act was enacted, making significant changes to the Internal Revenue Code. Changes included, but were not limited to, a corporate tax rate decrease from 35% to 21% beginning on January 1, 2018, the transition of U.S international taxation from a worldwide tax system to a modified territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company recognized $334,619 of income tax expense in our income tax provision in the fourth quarter of 2017 as a result of the enactment of the 2017 Tax Act, of which $334,022 related to the remeasurement of certain deferred tax assets and liabilities, and $597 related to mandatory repatriation. The 2017 Tax Act also caused a remeasurement of our tax benefit arrangements, as discussed in more detail below. During 2018, the Company filed all of its 2017 U.S. federal and state returns and the provisional net tax expense was finalized. There was no material change in the provisional amount recorded in 2017 in accordance with Staff Accounting Bulletin No. 118.
A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:
 
Year Ended December 31,
 
2019
 
2018
 
2017
U.S. statutory tax rate
21.0
 %
 
21.0
 %
 
35.0
 %
State and local taxes, net of federal benefit
6.2
 %
 
5.9
 %
 
1.0
 %
State rate change impact on deferred taxes
(4.1
)%
 
(3.4
)%
 
0.8
 %
Federal rate change impact on deferred taxes
 %
 
 %
 
77.8
 %
Tax benefit arrangement liability adjustment
0.7
 %
 
0.8
 %
 
(25.8
)%
Foreign tax rate differential
 %
 
0.2
 %
 
 %
Withholding taxes and other
 %
 
(0.3
)%
 
0.1
 %
Reserve for uncertain tax position
0.1
 %
 
(0.2
)%
 
0.1
 %
Income attributable to non-controlling interests
(2.1
)%
 
(2.3
)%
 
(1.9
)%
Effective tax rate
21.8
 %
 
21.7
 %
 
87.1
 %

 
The Company’s effective tax rate was 21.8% for the year ended December 31, 2019, in comparison to the U.S. statutory tax rate in 2019 of 21.0%. The comparison of our effective tax rate to U.S. statutory tax rate is influenced by the fact that we are subject to taxation in various state and local jurisdictions resulting in an increase in our effective tax rate, offset mainly by income tax benefit recorded in 2019 to remeasure deferred taxes. This remeasurement was a result of various state tax legislation enacted in
the year which resulted in a shift in the amount of income apportioned to various states in future periods and accordingly resulted in recognition of a deferred tax benefit in 2019.

The Company’s effective tax rate is 21.8% for the year ended December 31, 2019, compared to 21.7% in the prior year. The increase in our effective income tax rate is primarily due to an increase in state and local income taxes, as well as a one time benefit for the release of an income tax reserve in 2018. These factors are partially offset by the deferred income tax benefit recognized in 2019 as a result of the various state tax legislations enacted in the year.

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the accompanying consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. Details of the Company’s deferred tax assets and liabilities are summarized as follows: 
 
Year Ended December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Deferred revenue
$
5,343

 
$
4,619

Goodwill and intangible assets
410,585

 
409,740

Other
6,633

 
4,938

Deferred tax assets
$
422,561

 
$
419,297

Deferred tax liabilities:
 
 
 
Prepaid expenses
(1,021
)
 
(922
)
Property and equipment
(10,363
)
 
(5,837
)
Total deferred tax liabilities
$
(11,384
)
 
$
(6,759
)
Total deferred tax assets and liabilities
$
411,177

 
$
412,538

Reported as:
 
 
 
Deferred income taxes - non-current assets
$
412,293

 
$
414,841

Deferred income taxes - non-current liabilities
(1,116
)
 
(2,303
)
Total deferred tax assets and liabilities
$
411,177

 
$
412,538


As of December 31, 2019, the Company does not have any material net operating loss carryforwards.
A summary of the changes in the Company’s unrecognized tax positions is as follows:
 
Year Ended December 31,
 
2019
 
2018
Balance at beginning of year
$
300

 
$
2,608

Increase related to current year tax positions
405

 

Decrease related to prior year tax positions
(285
)
 
(2,308
)
Balance at end of year
$
420

 
$
300


As of December 31, 2019 and 2018, the total liability related to uncertain tax positions was $420 and $300, respectively, and is included within other liabilities on our consolidated balance sheets. The table above presents a reconciliation of the beginning and ending balances of the liability for unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2019 and 2018. During 2019, the company recognized a net impact of $120 to its liability for unrecognized tax benefits. During 2018, the Company settled a tax examination for $2,625 which was fully indemnified. At the date of settlement the Company had recorded on its balance sheet an unrecognized tax benefit and related indemnification asset of $2,967, reflecting principal and interest, and released $342 as an offset to provision for income taxes and also released an indemnification asset of $342 through other expense. The Company recognized interest and penalties related to uncertain tax positions as a component of income tax expense.
The Company and its subsidiaries file U.S. federal income tax returns, as well as tax returns in various state and foreign jurisdictions. Generally, the tax years 2016 through 2019 remain open to examination by the tax authorities in these jurisdictions.
Tax benefit arrangements
The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to the TRA Holders 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings. Also, to the extent an exchange results in Pla-Fit Holdings, LLC incurring a current tax liability relating to the New Hampshire business profits tax, the TRA Holders have agreed that they will contribute to Pla-Fit Holdings, LLC an amount sufficient to pay such liability (up to 3.5% of the value receive upon exchange). If and when the Company subsequently realizes a related tax benefit, Pla-Fit Holdings, LLC will distribute the amount of any such tax benefit to the relevant TRA LLC Owner in respect of its contribution. Due to changes in New Hampshire tax law during 2016, the Company no longer expects to incur any such liability under the New Hampshire business profits tax. The Company recorded other expense of $5,966, other expense of $4,765 and other income of $317,353 and in the years ended December 31, 2019, 2018 and 2017, respectively, reflecting a change in the tax benefit obligation attributable to a change in the expected tax benefits. In 2019 and 2018, the remeasurement was primarily due to various state tax legislation changes enacted in the year as well as acquisitions which resulted in an increase in the amount of income apportioned to various states in future periods and accordingly resulted in a decrease to the tax benefit arrangement liability. Included in this amount in 2017, was a gain of $316,813 related to the remeasurement of our tax benefit arrangements in connection with changes in the tax rate due to the 2017 Tax Act. This remeasurement gain, which is not subject to federal or state income tax, favorably impacted our effective federal and state income tax rates in 2017.  
In connection with the exchanges that occurred in the secondary offerings and other exchanges during 2019 and 2018, 885,810 and 1,736,020 Holdings Units, respectively, were redeemed by the Continuing LLC Owners for newly-issued shares of Class A common stock, resulting in an increase in the tax basis of the net assets of Pla-Fit Holdings subject to the provisions of the tax receivable agreements. As a result of the change in Planet Fitness, Inc.’s ownership percentage of Pla-Fit Holdings that occurred in conjunction with the exchanges, we recorded a decrease to our net deferred tax assets of $190 and $721, during the years ended December 31, 2019 and 2018, respectively. As a result of these exchanges, during the years ended December 31, 2019 and 2018 we also recognized deferred tax assets in the amount of $20,362 and $27,565, respectively, and corresponding tax benefit arrangement liabilities of $17,016 and $23,526, respectively, representing approximately 85% of the tax benefits due to the TRA Holders. The offset to the entries recorded in connection with exchanges in each year was to stockholders’ equity.
The tax benefit obligation was $427,216 and $429,233 as of December 31, 2019 and 2018, respectively.
Projected future payments under the tax benefit arrangements are as follows:
 
 
Amount
2020
$
26,379

2021
26,633

2022
27,195

2023
27,733

2024
28,372

Thereafter
290,904

Total
$
427,216


v3.19.3.a.u2
Commitments and contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies Commitments and contingencies
(a) Legal matters
From time to time, and in the ordinary course of business, the Company is subject to various claims, charges, and litigation, such as employment-related claims and slip and fall cases.
On May 3, 2019, the Company and other defendants received a joint and several judgment against them in the amount of $6,300, inclusive of accrued interest, in a civil action brought by a former employee. As of December 31, 2019, the Company has estimated its obligation related to this matter to be approximately $1,260, which is included in other current liabilities on the condensed consolidated balance sheet. In connection with 2012 acquisition of Pla-Fit Holdings on November 8, 2012, the sellers are obligated to indemnify the Company related to this specific matter. The Company has therefore recorded an offsetting indemnification receivable of $1,260 in other receivables on the Company’s condensed consolidated balance sheet, of which $420 is due from a related party. The Company has incurred, and may incur in the future, legal costs on behalf of the defendants in the case, which include a related party. These costs have not been and are not expected to be material in the future.
The Company is not currently aware of any legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position or result of operations.
(b) Purchase commitments
As of December 31, 2019, the Company had advertising purchase commitments of approximately $41,311, including commitments made by the NAF. In addition, the Company had open purchase orders of approximately $10,434 primarily related to equipment to be sold to franchisees.
(c) Guarantees
The Company historically guaranteed lease agreements for certain franchisees and in 2019, in connection with a real estate partnership, the Company began guaranteeing certain leases of its franchisees up to a maximum period of ten years, with earlier expiration dates if certain conditions are met. The Company’s maximum obligation, as a result of its guarantees of leases, is approximately $10,309 and $732 as of December 31, 2019 and 2018, respectively, and would only require payment upon default by the primary obligor. The Company has determined the fair value of these guarantees at inception is not material, and as of December 31, 2019 and 2018, no accrual has been recorded for the Company’s potential obligation under its guaranty arrangement.
v3.19.3.a.u2
Retirement Plan
12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Retirement Plan Retirement Plan
The Company maintains a 401(k) deferred tax savings plan (the Plan) for eligible employees. The Plan provides for the Company to make an employer matching contribution currently equal to 100% of employee deferrals up to a maximum of 4% of each eligible participating employees’ wages. Total employer matching contributions expensed in the consolidated statements of operations were approximately $986, $832, and $623 for the years ended December 31, 2019, 2018 and 2017, respectively.
v3.19.3.a.u2
Segments
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segments Segments
The Company has three reportable segments: (i) Franchise; (ii) Corporate-owned stores; and (iii) Equipment.  
The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments.
The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, Canada, the Dominican Republic, Panama, Mexico and Australia. The Corporate-owned stores segment includes operations with respect to all Corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to franchisee-owned stores.
The accounting policies of the reportable segments are the same as those described in Note 2. The Company evaluates the performance of its segments and allocates resources to them based on revenue and earnings before interest, taxes, depreciation, and amortization, referred to as Segment EBITDA. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues.
The tables below summarize the financial information for the Company’s reportable segments for the years ended December 31, 2019, 2018 and 2017. The “Corporate and other” column, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.
 
Year Ended December 31,
 
2019
 
2018
 
2017
Revenue
 
 
 
 
 
Franchise segment revenue - U.S.
$
271,375

 
$
219,506

 
$
147,787

Franchise segment revenue - International
6,207

 
4,634

 
2,368

Franchise segment total
277,582

 
224,140

 
150,155

Corporate-owned stores segment - U.S.
155,308

 
134,174

 
107,712

Corporate-owned stores segment - International
4,389

 
4,425

 
4,402

Corporate-owned stores segment total
159,697

 
138,599

 
112,114

Equipment segment - U.S.
251,524

 
210,159

 
167,673

Equipment segment total
251,524

 
210,159

 
167,673

Total revenue
$
688,803

 
$
572,898

 
$
429,942


 
Franchise segment revenue includes franchise revenue, commission income and for the years ended December 31, 2019 and 2018 includes NAF revenue, see Note 2 and Note 11.
Franchise revenue includes revenue generated from placement services of $17,755, $11,502, and $11,371 for the years ended December 31, 2019, 2018 and 2017, respectively. 
 
Year Ended December 31,
 
2019
 
2018
 
2017
Segment EBITDA
 
 
 
 
 
Franchise
$
192,281

 
$
152,571

 
$
126,459

Corporate-owned stores
65,613

 
56,704

 
46,855

Equipment
59,618

 
47,607

 
38,539

Corporate and other
(46,190
)
 
(43,753
)
 
284,372

Total Segment EBITDA
$
271,322

 
$
213,129

 
$
496,225


 
The following table reconciles total Segment EBITDA to income before taxes: 
 
Year Ended December 31,
 
2019
 
2018
 
2017
Total Segment EBITDA
$
271,322

 
$
213,129

 
$
496,225

Less:
 
 
 
 
 
Depreciation and amortization
44,346

 
35,260

 
31,761

Other income (expense)
(6,107
)
 
(6,175
)
 
316,928

Income from operations
233,083

 
184,044

 
147,536

Interest expense, net
(53,799
)
 
(46,065
)
 
(35,283
)
Other income (expense)
(6,107
)
 
(6,175
)
 
316,928

Income before income taxes
$
173,177

 
$
131,804

 
$
429,181



The following table summarizes the Company’s assets by reportable segment: 
 
December 31, 2019
 
December 31, 2018
Franchise
$
193,504

 
$
185,899

Corporate-owned stores
471,234

 
243,221

Equipment
197,656

 
210,462

Unallocated
854,796

 
713,834

Total consolidated assets
$
1,717,190

 
$
1,353,416


 
The table above includes $1,039 and $1,892 of long-lived assets located in the Company’s international corporate-owned stores as of December 31, 2019 and 2018, respectively.
For the segment footnotes disclosure as of December 31, 2018, an immaterial error of $133,523 has been corrected to appropriately classify assets from the franchise segment to the unallocated segment at December 31, 2018. This correction does not impact the Company’s previously reported consolidated balance sheets, consolidated statements of cash flow or statements of operations.
The following table summarizes the Company’s goodwill by reportable segment:
 
December 31, 2019
 
December 31, 2018
Franchise
$
16,938

 
$
16,938

Corporate-owned stores
118,217

 
89,909

Equipment
92,666

 
92,666

Total consolidated goodwill
$
227,821

 
$
199,513

v3.19.3.a.u2
Corporate-owned and franchisee-owned stores
12 Months Ended
Dec. 31, 2019
Franchisors [Abstract]  
Corporate-owned and franchisee-owned stores Corporate-owned and franchisee-owned stores
The following table shows changes in our corporate-owned and franchisee-owned stores for the years ended December 31, 2019, 2018 and 2017:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Franchisee-owned stores:
 
 
 
 
 
Stores operated at beginning of period
1,666

 
1,456

 
1,255

New stores opened
255

 
226

 
206

Stores debranded, sold or consolidated(1)
(18
)
 
(16
)
 
(5
)
Stores operated at end of period
1,903

 
1,666

 
1,456

Corporate-owned stores:
 
 
 
 
 
Stores operated at beginning of period
76

 
62

 
58

New stores opened
6

 
4

 
4

Stores acquired from franchisees
16

 
10

 

Stores operated at end of period
98

 
76

 
62

Total stores:
 
 
 
 
 
Stores operated at beginning of period
1,742

 
1,518

 
1,313

New stores opened
261

 
230

 
210

Stores debranded, sold or consolidated(1)
(2
)
 
(6
)
 
(5
)
Stores operated at end of period
2,001

 
1,742

 
1,518

 
(1)
The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
v3.19.3.a.u2
Quarterly financial data (unaudited)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Quarterly financial data (unaudited) Quarterly financial data (unaudited)
 
For the quarter ended
 
March 31,
2019
 
June 30,
2019
 
September 30,
2019
 
December 31,
2019
Total revenue
$
148,817

 
$
181,661

 
$
166,815

 
$
191,510

Income from operations
53,185

 
65,266

 
53,061

 
61,571

Net income
31,639

 
39,827

 
29,692

 
34,255

Net income attributable to Planet Fitness, Inc.
27,409

 
34,844

 
25,777

 
29,665

Earnings per share:
 
 
 
 
 
 
 
Class A - Basic
$
0.33

 
$
0.41

 
$
0.31

 
$
0.37

Class A - Diluted
$
0.32

 
$
0.41

 
$
0.31

 
$
0.36

 
For the quarter ended
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
December 31,
2018
Total revenue
$
121,333

 
$
140,550

 
$
136,656

 
$
174,359

Income from operations
38,918

 
48,811

 
43,573

 
52,742

Net income
23,493

 
30,418

 
20,472

 
28,779

Net income attributable to Planet Fitness, Inc.
19,880

 
25,874

 
17,471

 
24,796

Earnings per share:
 
 
 
 
 
 
 
Class A - Basic
$
0.23

 
$
0.30

 
$
0.20

 
$
0.29

Class A - Diluted
$
0.23

 
$
0.29

 
$
0.20

 
$
0.29


v3.19.3.a.u2
Valuation and Qualifying Accounts
12 Months Ended
Dec. 31, 2019
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
Valuation and Qualifying Accounts
Schedule II – Valuation and Qualifying Accounts
(in thousands)
Balance at Beginning of Period
 
Provision for (recovery of) doubtful accounts, net
 
Write-offs and other
 
Balance at End of Period
Allowance for doubtful accounts:
 
 
 
 
 
 
 
December 31, 2019
$
84

 
$
87

 
$
(60
)
 
$
111

December 31, 2018
32

 
19

 
33

 
84

December 31, 2017
$
687

 
$
(19
)
 
$
(636
)
 
$
32


v3.19.3.a.u2
Summary of significant accounting policies (Policies)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Basis of presentation and consolidation
(a) Basis of presentation and consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany balances and transactions have been eliminated in consolidation.
As discussed in Note 1, Planet Fitness, Inc. consolidates Pla-Fit Holdings. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.
The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”), PF Melville LLC (“PF Melville”), and Planet Fitness NAF, LLC (the “NAF”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. MMR and PF Melville are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs. The NAF is an advertising fund on behalf of which the Company collects 2% of gross monthly membership fees from franchisees, in accordance with the provisions of the franchise agreements, and uses the amounts received to increase sales and further enhance the public reputation of the Planet Fitness brand. See Note 4 for further information related to the NAF.
Use of estimates
(b) Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.
Concentrations
(c) Concentrations
Cash and cash equivalents are financial instruments, which potentially subject the Company to a concentration of credit risk. The Company invests its excess cash in several major financial institutions, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company maintains balances in excess of these limits, but does not believe that such deposits with its banks are subject to any unusual risk.
The credit risk associated with trade receivables is mitigated due to the large number of customers, generally our franchisees, and their broad dispersion over many different geographic areas. We do not have any concentrations with respect to our revenues.
The Company purchases equipment, both for corporate-owned stores and for sales to franchisee-owned stores from various equipment vendors. For the year ended December 31, 2019, purchases from three equipment vendors comprised 48%, 35% and 12%, respectively, of total equipment purchases. For the year ended December 31, 2018 purchases from two equipment vendors comprised 76% and 13%, respectively, of total equipment purchases. For the year ended December 31, 2017 purchases from one equipment vendor comprised 91% of total equipment purchases.
The Company, including the NAF, uses various vendors for advertising services. For the year ended December 31, 2019, purchases from two vendors comprised 38% and 15%, respectively, of total advertising purchases. For the year ended December 31, 2018 purchases from one vendor comprised 65% of total advertising purchases, and for the year ended December 31, 2017 purchases from one vendor comprised 63% of total advertising purchases (see Note 4 for further discussion of the NAF).
Cash, cash equivalents and restricted cash
(d) Cash, cash equivalents and restricted cash
The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash held within the NAF is recorded as a restricted asset (see Note 4).
In accordance with the Company’s securitized financing facility, certain cash accounts have been established in the name of Citibank, N.A. (the “Trustee”). The Company holds restricted cash which primarily represents cash collections held by the Trustee, which includes interest, principal, and commitment fee reserves. As of December 31, 2019, the Company had restricted cash held by the Trustee of $42,539. Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows.
Revenue recognition and Deferred Revenue
(e) Revenue recognition
Revenue from Contracts with Customers
We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers (“ASC 606”), from ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, the “Previous Standards”) on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of Previous Standards. The $9,192 cumulative effect of our transition to ASC 606 is reflected as an adjustment to January 1, 2018 stockholders’ deficit (see Note 11).
Our transition to ASC 606 represents a change in accounting principle. ASC 606 eliminates industry-specific guidance and provides a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASC 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled in exchange for those goods or services.
Revenue Recognition Significant Accounting Policies under ASC 606
The Company’s revenues are comprised of franchise revenue, equipment revenue, and corporate-owned stores revenue.
Franchise revenue
Franchise revenues consist primarily of royalties, NAF contributions, initial and successor franchise fees and upfront fees from area development agreements (“ADAs”), transfer fees, equipment placement revenue, other fees and commission income. 
The Company’s primary performance obligation under the franchise license is granting certain rights to use the Company’s intellectual property, and all other services the Company provides under the ADA and franchise agreement are highly interrelated, not distinct within the contract, and therefore accounted for under ASC 606 as a single performance obligation, which is satisfied by granting certain rights to use our intellectual property over the term of each franchise agreement.
Royalties, including franchisee contributions to national advertising funds, are calculated as a percentage of franchise monthly dues and annual fees over the term of the franchise agreement. Under our franchise agreements, advertising contributions paid by franchisees must be spent on advertising, marketing and related activities. Initial and successor franchise fees are payable by the franchisee upon signing a new franchise agreement or successor franchise agreement, and transfer fees are paid to the Company when one franchisee transfers a franchise agreement to a different franchisee. Our franchise royalties, as well as our NAF contributions, represent sales-based royalties that are related entirely to our performance obligation under the franchise agreement and are recognized as franchise sales occur.
Additionally, under ASC 606, initial and successor franchise fees, as well as transfer fees, are recognized as revenue on a straight-line basis over the term of the respective franchise agreement. Under the Previous Standards, initial franchise fees were recognized as revenue when the related franchisees signed a lease and completed the Company’s new franchisee training. Successor franchise fees and transfer fees were recognized as revenue upon execution of a new franchise agreement. Our ADAs generally consist of an obligation to grant geographic exclusive area development rights. These development rights are not distinct from franchise agreements, so upfront fees paid by franchisees for exclusive development rights are deferred and apportioned to each franchise agreement signed by the franchisee. The pro-rata amount apportioned to each franchise agreement is accounted for identically to the initial franchise fee.
The Company is generally responsible for assembly and placement of equipment it sells to U.S. based franchisee-owned stores. Placement revenue is recognized upon completion and acceptance of the services at the franchise location.
The Company recognizes commission income from certain of its franchisees’ use of certain preferred vendor arrangements. Commissions are recognized when amounts have been earned and collectability from the vendor is reasonably assured.
Online member join fees are paid to the Company by franchisees for processing new membership transactions when a new member signs up for a membership to a franchisee-owned store through the Company’s website. These fees are recognized as revenue as each transaction occurs.
Billing transaction fees are paid to the Company by certain of its franchisees for the processing of franchisee membership dues and annual fees through the Company’s third-party hosted point-of-sale system and are recognized as revenue as they are earned.
Equipment revenue
The Company sells and delivers equipment purchased from third-party equipment manufacturers to U.S. based franchisee-owned stores.  Revenue is recognized upon transfer of control of ordered items, generally upon delivery to the customer, which is when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created. Franchisees are charged for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment revenue and freight costs are recorded within cost of revenue. In most instances, the Company recognizes equipment revenue on a gross basis as management has determined the Company to be the principal in these transactions. Management determined the Company to be the principal in the transaction because the Company controls the equipment prior to delivery to the final customer as evidenced by its pricing discretion over the goods, inventory transfer of title and risk of loss while the inventory is in transit, and having the primary responsibility to fulfill the customer order and direct the third-party vendor.
Corporate-owned stores revenue
The following revenues are generated from stores owned and operated by the Company.
Membership dues revenue
Customers are offered multiple membership choices varying in length. Membership dues are earned and recognized over the membership term on a straight-line basis.
Enrollment fee revenue
Enrollment fees are charged to new members at the commencement of their membership. The Company recognizes enrollment fees ratably over the estimated duration of the membership life, which is generally two years.
Annual membership fee revenue
Annual membership fees are annual fees charged to members in addition to and in order to maintain low monthly membership dues. The Company recognizes annual membership fees ratably over the 12-month membership period.
Retail sales
The Company sells Planet Fitness branded apparel, food, beverages, and other accessories. The revenue for these items is recognized at the point of sale.
Sales tax
All revenue amounts are recorded net of applicable sales tax.
Revenue Recognition Significant Accounting Policies under Previous Standards, prior to January 1, 2018 if different than under ASC 606
Franchise revenue
The following revenues are generated as a result of transactions with or related to the Company’s franchisees.
Area development fees
ADA fees collected in advance are deferred until the Company provides substantially all required obligations pursuant to the ADA. As the efforts and total cost relating to initial services are affected significantly by the number of stores opened in an area, the respective ADA is treated as a divisible contract. As each new site is accepted under an ADA, a franchisee signs a franchise operating agreement for the respective franchise location. As each store opened under an ADA typically has performance obligations associated with it, the Company recognizes ADA revenue as each individual franchise location is developed in proportion to the total number of stores to be developed under the ADA. These obligations are typically completed once the store is opened or the franchisee executes the individual property lease. ADAs generally have an initial term equal to the number of years over which the franchisee is required to open franchise stores, which is typically 5 to 10 years. There is no right of refund for an executed ADA. Upon default, as defined in the agreement, the Company may reacquire the rights pursuant to an ADA, and all remaining deferred revenue is recognized at that time.
Franchise fees and performance fees
Nonrefundable franchise fees are typically deferred until the franchisee executes a lease and receives initial training for the location, which is the point at which the Company has determined it has provided all of its material obligations required to recognize revenue. These amounts are included in deferred revenue on our consolidated balance sheets.
The individual franchise agreements typically have a 10-year initial term, but provide the franchisee with an opportunity to enter into successive renewals subject to certain conditions.
Transfer fees
The Company’s current franchise agreement provides that upon the transfer of a Planet Fitness store to a different franchisee, the Company is entitled to a transfer fee in the amount of the greater of $25, or $10 per store being transferred, if more than one, in addition to reimbursement of out-of-pocket expenses, including external legal and administrative costs incurred in connection with the transfer. Transfer-related fees and expenses are due, payable, and recognized at the time the transfer is effectuated.
Royalties
Royalties, which represent recurring fees paid by franchisees based on the franchisee-owned stores’ monthly and annual membership billings, are recognized on a monthly basis over the term of the franchise agreement. As specified under certain franchise agreements, the Company recognizes additional royalty fees as the franchisee-owned stores attain contractual monthly membership billing threshold amounts.
Equipment revenue
Equipment revenue is recognized upon the equipment being delivered to and assembled at each store and accepted by the franchisee. Franchisees are charged for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment revenue and freight costs are recorded within cost of revenue. The Company recognizes revenue on a gross basis in these transactions as management has determined the Company to be the principal in these transactions. Management determined the Company to be the principal because the Company is the primary obligor in these transactions, the Company has latitude in establishing prices for the equipment sales to franchisees, the Company has supplier selection discretion and is involved in determination of product specifications, and the Company bears all credit risk associated with obligations to the equipment manufacturers.
Equipment deposits are recognized as a liability on the accompanying consolidated balance sheets until delivery, assembly (if required), and acceptance by the franchisee.
(f) Deferred revenue
Subsequent to the adoption of ASC 606 franchise deferred revenue results from initial and successor franchise fees and ADA fees paid by franchisees, as well as transfer fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement and under the Previous Standard franchise deferred revenue represents cash received from franchisees for ADAs and franchise fees for which revenue recognition criteria has not yet been met. Deferred revenue is also recognized in our Corporate-owned stores segment for cash received from members for enrollment fees, membership dues and annual fees for the portion not yet earned based on the membership period under both ASC 606 and the Previous Standard.
Cost of revenue
(g) Cost of revenue
Cost of revenue consists primarily of direct costs associated with equipment sales (including freight costs) and the cost of retail merchandise sold in corporate-owned stores. Costs related to retail merchandise sales were immaterial in all periods presented.
Rebates from equipment vendors where the Company has recognized the related equipment revenue and costs are recorded as a reduction to the cost of revenue.
Store operations
(h) Store operations
Store operations consists of the direct costs related to operating corporate-owned stores, including our store management and staff, rent expense, utilities, supplies, maintenance, and local advertising.
Selling, general and administrative
(i) Selling, general and administrative
Selling, general and administrative expenses consist of costs associated with administrative and franchisee support functions related to our existing business as well as growth and development activities. These costs primarily consist of payroll, IT related, marketing, legal and accounting expenses. These expenses include costs related to placement services of $7,063, $5,397, and $4,601, for the years ended December 31, 2019, 2018 and 2017, respectively.
Accounts receivable
(j) Accounts receivable
Accounts receivable is primarily comprised of amounts owed to the Company resulting from equipment, placement, and commission revenue. The Company evaluates its accounts receivable on an ongoing basis and may establish an allowance for doubtful accounts based on collections and current credit conditions. Accounts are written off as uncollectible when it is determined that further collection efforts will be unsuccessful. Historically, the Company has not had a significant amount of write-offs.
Leases and asset retirement obligations
(k) Leases and asset retirement obligations
Topic 842 - Leases
We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), from ASC Topic 840, Leases (the “Previous Standard”) on January 1, 2019 using the effective date as our date of initial application. Our Financial Statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of Previous Standards. Upon transition to the new guidance on January 1, 2019, the Company recognized approximately $130,000 of operating lease liabilities. Additionally, the Company recorded ROU assets in a corresponding amount, net of amounts reclassified from other assets and liabilities, including deferred rent, tenant improvement allowances, and favorable lease assets, as specified by the new lease guidance. In connection with the election of the hindsight practical expedient related to reassessing lease terms for existing leases as of January 1, 2019, the Company recorded a cumulative transition adjustment of $1,713, net of tax, which is reflected as an adjustment to January 1, 2019 stockholders’ deficit.
Our transition to ASC 842 represents a change in accounting principle. The standard is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.
Significant Lease Accounting Policies under ASC 842
The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. We currently lease our corporate headquarters and all but one of our corporate-owned stores. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred.
Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
At the inception of each lease, we determine its appropriate classification as an operating or financing lease. The majority of our leases are operating leases. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease right of use (“ROU”) assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Notes.
The Company has an immaterial amount of non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the Previous Standard.
Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Lease Accounting Policies under Previous Standards, prior to January 1, 2019 if different than under ASC 842
The Company recognizes rent expense related to leased office and operating space on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, and is recorded as deferred rent in the Company’s consolidated balance sheets.
Asset retirement obligations
In accordance with ASC Topic 410, Asset Retirement and Environmental Obligations, the Company establishes assets and liabilities for the present value of estimated future costs to return certain leased facilities to their original condition. Such assets are depreciated on a straight-line basis over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs.
Property and equipment
(l) Property and equipment
Property and equipment is recorded at cost and depreciated using the straight-line method over its related estimated useful life. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset, whichever is shorter. Upon sale or retirement, the asset cost and related accumulated depreciation are removed from the respective accounts, and any related gain or loss is reflected in the consolidated statements of operations. Ordinary maintenance and repair costs are expensed as incurred.
Advertising expenses
(m) Advertising expenses
The Company expenses advertising costs as incurred. Advertising expenses, net of amounts reimbursed by franchisees, are included within store operations and selling, general and administrative expenses and totaled $13,749, $12,101, and $9,906 for the years ended December 31, 2019, 2018 and 2017, respectively. See Note 4 for discussion of the national advertising fund.
Goodwill, long-lived assets, and other intangible assets
(n) Goodwill, long-lived assets, and other intangible assets
Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with ASC Topic 350, Intangibles—Goodwill and Other. In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; or (2) the intangible asset is separable. Intangibles are typically trade and brand names, customer relationships, noncompete agreements, reacquired franchise rights, and favorable or unfavorable leases. Transactions are evaluated to determine whether any gain or loss on reacquired franchise rights, based on their fair value, should be recognized separately from identified intangibles. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.
Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have an indefinite life are amortized over their estimated useful lives on either a straight-line or accelerated basis as deemed appropriate, and are reviewed for impairment when events or circumstances suggest that the assets may not be recoverable.
The Company performs its annual test for impairment of goodwill and indefinite lived intangible assets on December 31 of each year. For goodwill, the first step of the impairment test is to determine whether the carrying amount of a reporting unit exceeds the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, the Company would be required to perform a second step of the impairment test as this is an indication that the reporting unit’s goodwill may be impaired. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. Any impairment loss would be recognized in an amount equal to the excess of the carrying value of the goodwill over the implied fair value of the goodwill. The Company is also permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it need not perform the two-step impairment test.
For indefinite lived intangible assets, the impairment assessment consists of comparing the carrying value of the asset to its estimated fair value. To the extent that the carrying value exceeds the fair value of the asset, an impairment is recorded to reduce the carrying value to its fair value. The Company is also permitted to make a qualitative assessment of whether it is more likely than not an indefinite lived intangible asset’s fair value is less than its carrying value prior to applying the quantitative assessment. If based on the Company’s qualitative assessment it is not more likely than not that the carrying value of the asset is less than its fair value, then a quantitative assessment is not required.
The Company determined that no impairment charges were required during any periods presented.
The Company applies the provisions of ASC Topic 360, Property, Plant and Equipment, which requires that long-lived assets, including amortizable intangible assets, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment, then assets are required to be grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the undiscounted future net cash flows expected to be generated by the asset or asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no events or changes in circumstances that required the Company to test for impairment during any of the periods presented.
Income taxes
(o) Income taxes
The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the expected future tax consequences attributable to temporary differences between the carrying amount of the existing tax assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied in the years in which temporary differences are expected to be recovered or settled. The principal items giving rise to temporary differences are the use of accelerated depreciation and certain basis differences resulting from acquisitions and the recapitalization transactions. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Planet Fitness, Inc. is the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including Planet Fitness, Inc. following the recapitalization transactions, on a pro rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings. The Company is also subject to taxes in foreign jurisdictions.
The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see Note 16).
Tax benefit arrangements
(p) Tax benefit arrangements
The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to certain existing and previous equity owners of Pla-Fit Holdings, LLC who are unaffiliated with TSG (the “TRA Holders”) 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class
A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings.
Based on current projections, the Company anticipates having sufficient taxable income to utilize these tax attributes and receive corresponding tax deductions in future periods. Accordingly, as of December 31, 2019 the Company has recorded a liability of $427,216 payable to the TRA Holders under the tax benefit obligations, representing approximately 85% of the calculated tax savings based on the original basis adjustments the Company anticipates being able to utilize in future years. Changes in the projected liability resulting from these tax benefit arrangements may occur based on changes in anticipated future taxable income, changes in applicable tax rates or other changes in tax attributes that may occur and impact the expected future tax benefits to be received by the Company. Changes in the projected liability under these tax benefit arrangements will be recorded as a component of other income (expense) each period. The projection of future taxable income involves significant judgment. Actual taxable income may differ from estimates, which could significantly impact the liability under the tax benefit arrangements and the Company’s consolidated results of operations.  
Fair value
(q) Fair value
ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:
Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Financial instruments
(r) Financial instruments
The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments.
Derivative instruments and hedging activities
(s) Derivative instruments and hedging activities
The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income, to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings.
The Company only enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis,
whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. See Note 10 for further information.
Equity-based compensation
(t) Equity-based compensation
The Company has an equity-based compensation plan under which it receives services from employees and directors as consideration for equity instruments of the Company. The compensation expense is determined based on the fair value of the award as of the grant date. Compensation expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. The Company accounts for forfeitures as they occur by reversing compensation cost for unvested awards when the award is forfeited. See Note 14 for further information.
Business combinations Business combinations
The Company accounts for business combinations using the purchase method of accounting which results in the assets acquired and liabilities assumed being recorded at fair value.
The valuation methodologies used are based on the nature of the asset or liability. The significant assets and liabilities measured at fair value include property and equipment, intangible assets, including trade names, member relationships and re-acquired franchise rights, deferred revenue and favorable and unfavorable leases.
The fair value of trade and brand names is estimated using the relief from royalty method, an income approach to valuation, which includes projecting future system-wide sales and other estimates. Membership relationships and franchisee relationships are valued based on an estimate of future revenues and costs related to the respective contracts over the remaining expected lives. The valuation includes assumptions related to the projected attrition and renewal rates on those existing franchise and membership arrangements being valued. Re-acquired franchise rights are valued using an excess earnings approach. The valuation of re-acquired franchise rights is determined using an estimation of future royalty income and related expenses associated with existing franchise contracts at the acquisition date. For re-acquired franchise rights with terms that are either favorable or unfavorable (from the Company’s perspective) to the terms included in the Company’s current franchise agreements, a gain or charge is recorded at the time of the acquisition to the extent of the favorability or unfavorability, respectively. Favorable and unfavorable operating leases are recorded based on differences between contractual rents under the respective lease agreements and prevailing market rents at the lease acquisition date. Subsequent to the adoption of ASC 842 on January 1, 2019, these are recorded as a component of the ROU asset and prior to the adoption of ASC 842 were recorded as intangible assets. Deferred revenue is valued based on estimated costs to fulfill the obligations assumed, plus a normal profit margin. No deferred revenue amounts are recognized for enrollment fees in the Company’s business combinations as there is no remaining obligation.
The Company considers its trade and brand name intangible assets to have an indefinite useful life, and, therefore, these assets are not amortized but rather are tested for impairment annually as discussed above. Amortization of re-acquired franchise rights and franchisee relationships is recorded over the respective franchise terms using the straight-line method which the Company believes approximates the period during which the related benefits are expected to be received. Member relationships are amortized on an accelerated basis based on expected attrition. Favorable and unfavorable operating leases are amortized into rental expense over the lease term of the respective leases using the straight-line method.
Guarantees
(v) Guarantees
The Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Note 3 and Note 17 for further discussion of such obligations guaranteed.
Contingencies
(w) Contingencies
The Company records estimated future losses related to contingencies when such amounts are probable and estimable. The Company includes estimated legal fees related to such contingencies as part of the accrual for estimated future losses.
Reclassifications
(x) Reclassifications
Certain amounts have been reclassified to conform to current year presentation.
Recent accounting pronouncements
(y) Recent accounting pronouncements
The FASB issued Accounting Standards Update (ASU) No. 2014-9, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. The Company adopted this new guidance in fiscal year 2018 utilizing the modified retrospective method. See above for revenue recognition policies and Note 11.
In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, Leases, in February 2016. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance requires lessees to recognize the assets and liabilities on the balance sheet for the rights and obligations created by leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Leases will be classified as finance or operating, with the classification affecting the pattern and classification of expense recognition within the income statement. The Company adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. See above for lease accounting policies and Note 7.
The FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, in August 2016. This guidance is intended to reduce diversity in practice of the classification of certain cash receipts and cash payments. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. The Company has adopted the guidance as of January 1, 2018 on a prospective basis, noting no material impact on its consolidated financial statements.
The FASB issued ASU No. 2017-4, Simplifying the Test for Goodwill Impairment, in January 2017. This guidance eliminates the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.
The FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, in August 2018. The guidance helps align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within that year, but allows for early adoption. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
v3.19.3.a.u2
Summary of significant accounting policies (Tables)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Schedule of Estimated Useful Lives of Fixed Assets The estimated useful lives of the Company’s fixed assets by class of asset are as follows:
 
 
Years
Buildings and building improvements
20–40
Information technology and systems
3-5
Furniture and fixtures
5
Leasehold improvements
Useful life or term of lease
whichever is shorter
Fitness equipment
5–7
Vehicles
5

Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis
The carrying value and estimated fair value of long-term debt as of December 31, 2019 and December 31, 2018 were as follows:
 
 
December 31, 2019
 
December 31, 2018
 
 
Carrying value
 
Estimated fair value(1)
 
Carrying value
 
Estimated fair value(2)
Long-term debt
 
$
1,735,000

 
$
1,765,805

 
$
1,197,000

 
$
1,188,985

(1) The estimated fair value of our long-term debt is estimated primarily based on current bid prices for our long-term debt. Judgment is required to develop these estimates. As such, the fair value of our long-term debt is classified within Level 2, as defined under U.S. GAAP.

v3.19.3.a.u2
Variable interest entities (Tables)
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Carrying Value of Variable Interest Entities of Consolidated Financial Statements
The carrying values of VIEs included in the consolidated financial statements as of December 31, 2019 and December 31, 2018 are as follows:
 
December 31, 2019
 
December 31, 2018
 
Assets
 
Liabilities
 
Assets
 
Liabilities
PF Melville
$
2,682

 
$

 
$
4,787

 
$

MMR
$
2,206

 

 
$
3,563

 

Total
$
4,888

 
$

 
$
8,350

 
$


v3.19.3.a.u2
Acquisition (Tables)
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Purchase Consideration Allocation
The purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
4,672

Reacquired franchise rights
7,640

Customer relationships
1,150

Favorable leases, net
520

Reacquired area development rights
150

Other assets
275

Goodwill
14,056

Liabilities assumed, including deferred revenues
(310
)
 
$
28,153


The purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
999

Reacquired franchise rights
6,740

Customer relationships
30

Unfavorable leases, net
(140
)
Other assets
78

Goodwill
7,239

Liabilities assumed, including deferred revenues
(145
)
 
$
14,801


The preliminary purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
3,044

Reacquired franchise rights
9,480

Customer relationships
940

Favorable leases, net
1,508

Reacquired area development rights
90

Other assets
314

Goodwill
21,069

Liabilities assumed, including deferred revenues
(443
)
 
$
36,002


The purchase consideration was allocated as follows:
 
Amount
Fixed assets
$
3,873

Reacquired franchise rights
4,610

Customer relationships
140

Favorable leases, net
80

Other assets
143

Goodwill
8,476

Liabilities assumed, including deferred revenues
(83
)
 
$
17,239


v3.19.3.a.u2
Property and equipment (Tables)
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
Property and equipment as of December 31, 2019 and 2018 consists of the following: 
 
December 31, 2019
 
December 31, 2018
Land
$
1,341

 
$
1,341

Equipment
51,039

 
40,895

Leasehold improvements
97,977

 
76,832

Buildings and improvements
8,589

 
8,632

Furniture & fixtures
19,129

 
13,827

Information technology and systems assets
35,419

 
17,238

Other
2,192

 
1,593

Construction in progress
3,416

 
7,095

 
219,102

 
167,453

Accumulated Depreciation
(73,621
)
 
(53,086
)
Total
$
145,481

 
$
114,367


v3.19.3.a.u2
Leases (Tables)
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Balance Sheet Classification of Lease Assets and Liabilities
Leases
 
Classification
 
December 31, 2019
Assets
 
 
 
 
Operating lease assets
 
Right of use asset, net
 
$
155,633

Finance lease assets
 
Property and equipment, net of accumulated depreciation
 
309

Total lease assets
 
 
 
$
155,942

 
 
 
 
 
Liabilities
 
 
 
 
Current:
 
 
 
 
Operating
 
Other current liabilities
 
$
16,755

Noncurrent:
 
 
 
 
Operating
 
Lease liabilities, net of current portion
 
152,920

Financing
 
Other liabilities
 
333

Total lease liabilities
 
 
 
$
170,008

 
 
 
 
 
Weighted-average remaining lease term (years) - operating leases
 
8.6

 
 
 
 
 
Weighted-average discount rate - operating leases
 
5.0
%

Components of Lease Cost
Supplemental disclosures of cash flow information related to leases were as follows:
 
 
December 31, 2019
Cash paid for lease liabilities
 
$
19,502

Operating assets obtained in exchange for operating lease liabilities
 
$
43,016


For the year ended December 31, 2019, the components of lease cost were as follows:
 
 
December 31, 2019
Operating lease cost
 
$
20,635

Variable lease cost
 
8,323

Total lease cost
 
$
28,958


Schedule of Supplemental Disclosures of Cash Flow Information Related to Leases
Supplemental disclosures of cash flow information related to leases were as follows:
 
 
December 31, 2019
Cash paid for lease liabilities
 
$
19,502

Operating assets obtained in exchange for operating lease liabilities
 
$
43,016


For the year ended December 31, 2019, the components of lease cost were as follows:
 
 
December 31, 2019
Operating lease cost
 
$
20,635

Variable lease cost
 
8,323

Total lease cost
 
$
28,958


Maturities of Operating Lease Liabilities
As of December 31, 2019, maturities of lease liabilities were as follows:
 
 
Amount
2020
 
$
24,756

2021
 
25,471

2022
 
25,709

2023
 
25,144

2024
 
23,077

Thereafter
 
88,141

Total lease payments
 
$
212,298

Less: imputed interest
 
42,290

Present value of lease liabilities
 
$
170,008


Previous Accounting Guidance For Future Commitments Under Noncancelable Operating Leases
As of December 31, 2018, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows:
 
Amount
2019
$
15,911

2020
15,219

2021
13,454

2022
12,561

2023
11,133

Thereafter
45,324

Total
$
113,602


v3.19.3.a.u2
Goodwill and intangible assets (Tables)
12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of Goodwill and Intangible Assets
A summary of goodwill and intangible assets at December 31, 2019 and 2018 is as follows:
December 31, 2019
Weighted
average
amortization
period (years)
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net carrying
Amount
Customer relationships
11.0
 
$
174,033

 
(112,114
)
 
$
61,919

Reacquired franchise rights
8.0
 
37,660

 
(12,258
)
 
25,402

 
 
 
211,693

 
(124,372
)
 
87,321

Indefinite-lived intangible:
 
 
 
 
 
 
 
Trade and brand names
N/A
 
146,600

 

 
146,600

Total intangible assets
 
 
$
358,293

 
$
(124,372
)
 
$
233,921

Goodwill
 
 
$
227,821

 
$

 
$
227,821

 
December 31, 2018
Weighted
average
amortization
period (years)
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net carrying
Amount
Customer relationships
11.0
 
$
173,063

 
(99,439
)
 
$
73,624

Favorable leases
8.0
 
4,017

 
(2,345
)
 
1,672

Reacquired franchise rights
7.0
 
21,349

 
(8,615
)
 
12,734

 
 
 
198,429

 
(110,399
)
 
88,030

Indefinite-lived intangible:
 
 
 
 
 
 
 
Trade and brand names
N/A
 
146,300

 

 
146,300

Total intangible assets
 
 
$
344,729

 
$
(110,399
)
 
$
234,330

Goodwill
 
 
$
199,513

 
$

 
$
199,513


Summary of Goodwill
A rollforward of goodwill during the years ended December 31, 2019 or 2018 is as follows:
 
Franchise
 
Corporate-owned stores
 
Equipment
 
Total
As of December 31, 2017
16,938

 
67,377

 
92,666

 
176,981

Acquisition of franchisee-owned stores

 
22,532

 

 
22,532

As of December 31, 2018
16,938

 
89,909

 
92,666

 
199,513

Acquisition of franchisee-owned stores

 
28,308

 

 
28,308

As of December 31, 2019
16,938

 
118,217

 
92,666

 
227,821


The following table summarizes the Company’s goodwill by reportable segment:
 
December 31, 2019
 
December 31, 2018
Franchise
$
16,938

 
$
16,938

Corporate-owned stores
118,217

 
89,909

Equipment
92,666

 
92,666

Total consolidated goodwill
$
227,821

 
$
199,513

Summary of Amortization expenses The anticipated annual amortization expense to be recognized in future years as of December 31, 2019 is as follows:
 
Amount
2020
$
16,845

2021
16,636

2022
16,728

2023
16,558

2024
14,067

Thereafter
6,487

Total
$
87,321


v3.19.3.a.u2
Long-term debt (Tables)
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Schedule of Long-term Debt
Long-term debt as of December 31, 2019 and 2018 consists of the following:  
 
December 31, 2019
 
December 31, 2018
2018-1 Class A-2-I notes
$
567,813

 
$
573,563

2018-1 Class A-2-II notes
617,187

 
623,437

2019-1 Class A-2 notes
550,000

 

Total debt, excluding deferred financing costs
1,735,000

 
1,197,000

Deferred financing costs, net of accumulated amortization
(29,995
)
 
(24,873
)
Total debt
1,705,005

 
1,172,127

Current portion of long-term debt and Variable Funding Note
17,500

 
12,000

Long-term debt, net of current portion
$
1,687,505

 
$
1,160,127


Schedule of Future Annual Payments of Long-term Debt
Future annual principal payments of long-term debt as of December 31, 2019 are as follows:  
 
Amount
2020
$
17,500

2021
17,500

2022
568,063

2023
11,750

2024
11,750

Thereafter
1,108,437

Total
$
1,735,000


v3.19.3.a.u2
Revenue recognition (Tables)
12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Schedule of Contract Liabilities The following table reflects the change in contract liabilities between December 31, 2018 and December 31, 2019,
 
Contract liabilities
Balance at December 31, 2018
$
49,862

Revenue recognized that was included in the contract liability at the beginning of the year
(25,600
)
Increase, excluding amounts recognized as revenue during the period
37,792

Balance at December 31, 2019
$
62,054


The summary set forth below represents the balances in deferred revenue as of December 31, 2019 and 2018:
 
December 31, 2019
 
December 31, 2018
Prepaid membership fees
$
7,231

 
$
6,085

Enrollment fees
915

 
1,104

Equipment discount
3,796

 
3,855

Annual membership fees
12,185

 
10,142

Area development and franchise fees
37,927

 
28,676

Total deferred revenue
62,054

 
49,862

Long-term portion of deferred revenue
34,458

 
26,374

Current portion of deferred revenue
$
27,596

 
$
23,488


Remaining Performance Obligation The Company has elected to exclude short term contracts, sales and usage based royalties and any other variable consideration recognized on an “as invoiced” basis.
Contract liabilities to be recognized in:
 
Amount
2020
 
$
27,596

2021
 
3,748

2022
 
3,410

2023
 
3,310

2024
 
3,050

Thereafter
 
20,940

Total
 
$
62,054



Schedule of Balances in Deferred Revenue The following table reflects the change in contract liabilities between December 31, 2018 and December 31, 2019,
 
Contract liabilities
Balance at December 31, 2018
$
49,862

Revenue recognized that was included in the contract liability at the beginning of the year
(25,600
)
Increase, excluding amounts recognized as revenue during the period
37,792

Balance at December 31, 2019
$
62,054


The summary set forth below represents the balances in deferred revenue as of December 31, 2019 and 2018:
 
December 31, 2019
 
December 31, 2018
Prepaid membership fees
$
7,231

 
$
6,085

Enrollment fees
915

 
1,104

Equipment discount
3,796

 
3,855

Annual membership fees
12,185

 
10,142

Area development and franchise fees
37,927

 
28,676

Total deferred revenue
62,054

 
49,862

Long-term portion of deferred revenue
34,458

 
26,374

Current portion of deferred revenue
$
27,596

 
$
23,488


Impact of ASC 606
The following tables reflect the impact of adoption of ASC 606 on our consolidated statements of operations for the year ended December 31, 2018, cash flows from operating activities for the year ended December 31, 2018 and our condensed consolidated balance sheet as of December 31, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”):
 
As reported for the year ended December 31, 2018
 
Total adjustments
 
Amounts under Previous Standards
Revenue:
 
 
 
 
 
Franchise
$
175,314

 
$
5,666

 
$
180,980

Commission income
6,632

 

 
6,632

National advertising fund revenue
42,194

 
(42,194
)
 

Corporate-owned stores
138,599

 

 
138,599

Equipment
210,159

 

 
210,159

Total revenue
572,898

 
(36,528
)
 
536,370

Operating costs and expenses:
 
 
 
 
 
Cost of revenue
162,646

 

 
162,646

Store operations
75,005

 

 
75,005

Selling, general and administrative
72,446

 

 
72,446

National advertising fund expense
42,619

 
(42,619
)
 

Depreciation and amortization
35,260

 

 
35,260

Other loss (gain)
878

 

 
878

Total operating costs and expenses
388,854

 
(42,619
)
 
346,235

Income from operations
184,044

 
6,091

 
190,135

Other expense, net:
 
 
 
 
 
Interest income
4,681

 

 
4,681

Interest expense
(50,746
)
 

 
(50,746
)
Other (expense) income
(6,175
)
 

 
(6,175
)
Total other expense, net
(52,240
)
 

 
(52,240
)
Income before income taxes
131,804

 
6,091

 
137,895

Provision for income taxes
28,642

 
1,437

 
30,079

Net income
103,162

 
4,654

 
107,816

Less net income attributable to non-controlling interests
15,141

 
642

 
15,783

Net income attributable to Planet Fitness, Inc.
$
88,021

 
$
4,012

 
$
92,033

Net income per share of Class A common stock:
 
 
 
 
 
Basic
$
1.01

 
 
 
$
1.06

Diluted
$
1.00

 
 
 
$
1.05


Consolidated Statement of Cash Flows
 
As reported December 31, 2018
 
Total adjustments
 
Amounts under Previous Standards
Cash flows from operating activities:
 
 
 
 
 
Net income
$
103,162

 
$
4,654

 
$
107,816

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
35,260

 

 
35,260

Amortization of deferred financing costs
3,400

 

 
3,400

Amortization of favorable leases and asset retirement obligations
375

 

 
375

Amortization of interest rate caps
1,170

 

 
1,170

Deferred tax expense
23,933

 

 
23,933

Loss (gain) on re-measurement of tax benefit arrangement
4,765

 

 
4,765

Provision for bad debts
19

 

 
19

Gain on disposal of property and equipment
462

 

 
462

Loss on extinguishment of debt
4,570

 

 
4,570

Third party debt refinancing expense

 

 

Loss on reacquired franchise rights
360

 

 
360

Equity-based compensation
5,479

 

 
5,479

Changes in operating assets and liabilities:

 
 
 

Accounts receivable
(1,923
)
 

 
(1,923
)
Due from related parties
3,598

 

 
3,598

Inventory
(2,430
)
 

 
(2,430
)
Other assets and other current assets
5,778

 

 
5,778

National advertising fund

 
(425
)
 
(425
)
Accounts payable and accrued expenses
14,506

 

 
14,506

Other liabilities and other current liabilities
(2,835
)
 

 
(2,835
)
Income taxes
194

 
1,437

 
1,631

Payments pursuant to tax benefit arrangements
(30,493
)
 

 
(30,493
)
Equipment deposits
1,410

 

 
1,410

Deferred revenue
9,640

 
$
(5,666
)
 
3,974

Deferred rent
3,999

 

 
3,999

Net cash provided by operating activities
$
184,399

 
$

 
$
184,399

Consolidated Balance Sheet
 
As reported December 31, 2018
 
Total adjustments
 
Amounts under Previous Standards
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
289,431

 
$

 
$
289,431

Restricted cash
30,708

 

 
30,708

Accounts receivable, net
38,960

 

 
38,960

Due from related parties

 

 

Inventory
5,122

 

 
5,122

Restricted assets – national advertising fund

 
425

 
425

Prepaid expenses
4,947

 

 
4,947

Other receivables
12,548

 

 
12,548

Income tax receivable
6,824

 
(1,437
)
 
5,387

Total current assets
388,540

 
(1,012
)
 
387,528

Property and equipment, net
114,367

 

 
114,367

Intangible assets, net
234,330

 

 
234,330

Goodwill
199,513

 

 
199,513

Deferred income taxes
414,841

 
(3,285
)
 
411,556

Other assets, net
1,825

 

 
1,825

Total assets
$
1,353,416

 
$
(4,297
)
 
$
1,349,119

Liabilities and stockholders’ equity (deficit)
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Current maturities of long-term debt
$
12,000

 
$

 
$
12,000

Accounts payable
30,428

 

 
30,428

Accrued expenses
32,384

 

 
32,384

Equipment deposits
7,908

 

 
7,908

Restricted liabilities – national advertising fund

 

 

Deferred revenue, current
23,488

 
118

 
23,606

Payable pursuant to tax benefit arrangements, current
24,765

 

 
24,765

Other current liabilities
430

 

 
430

Total current liabilities
131,403

 
118

 
131,521

Long-term debt, net of current maturities
1,160,127

 

 
1,160,127

Deferred rent, net of current portion
10,083

 

 
10,083

Deferred revenue, net of current portion
26,374

 
(18,448
)
 
7,926

Deferred tax liabilities
2,303

 

 
2,303

Payable pursuant to tax benefit arrangements, net of current portion
404,468

 

 
404,468

Other liabilities
1,447

 

 
1,447

Total noncurrent liabilities
1,604,802

 
(18,448
)
 
1,586,354

Commitments and contingencies (Note 17)
 
 
 
 
 
Stockholders’ equity (deficit):
 
 
 
 
 
Class A common stock
9

 

 
9

Class B common stock
1

 

 
1

Accumulated other comprehensive income
94

 

 
94

Additional paid in capital
19,732

 

 
19,732

Accumulated deficit
(394,410
)
 
13,391

 
(381,019
)
Total stockholders’ deficit attributable to Planet Fitness Inc.
(374,574
)
 
13,391

 
(361,183
)
Non-controlling interests
(8,215
)
 
642

 
(7,573
)
Total stockholders’ deficit
(382,789
)
 
14,033

 
(368,756
)
Total liabilities and stockholders’ deficit
$
1,353,416

 
$
(4,297
)
 
$
1,349,119


As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018:
 
As Reported December 31,
 
Total adjustments
 
Adjusted January 1,
 
2017
 
 
 
2018
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
113,080

 
$

 
$
113,080

Accounts receivable, net
37,272

 

 
37,272

Due from related parties
3,020

 

 
3,020

Inventory
2,692

 

 
2,692

Restricted assets – national advertising fund
499

 

 
499

Prepaid expenses
3,929

 

 
3,929

Other receivables
9,562

 

 
9,562

Other current assets
6,947

 

 
6,947

Total current assets
177,001

 

 
177,001

Property and equipment, net
83,327

 

 
83,327

Intangible assets, net
235,657

 

 
235,657

Goodwill
176,981

 

 
176,981

Deferred income taxes
407,782

 
3,285

 
411,067

Other assets, net
11,717

 

 
11,717

Total assets
$
1,092,465

 
$
3,285

 
$
1,095,750

Liabilities and stockholders’ equity (deficit)
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Current maturities of long-term debt
$
7,185

 
$

 
$
7,185

Accounts payable
28,648

 

 
28,648

Accrued expenses
18,590

 

 
18,590

Equipment deposits
6,498

 

 
6,498

Restricted liabilities – national advertising fund
490

 

 
490

Deferred revenue, current
19,083

 
(764
)
 
18,319

Payable pursuant to tax benefit arrangements, current
31,062

 

 
31,062

Other current liabilities
474

 

 
474

Total current liabilities
112,030

 
(764
)
 
111,266

Long-term debt, net of current maturities
696,576

 

 
696,576

Deferred rent, net of current portion
6,127

 

 
6,127

Deferred revenue, net of current portion
8,440

 
13,241

 
21,681

Deferred tax liabilities
1,629

 

 
1,629

Payable pursuant to tax benefit arrangements, net of current portion
400,298

 

 
400,298

Other liabilities
4,302

 

 
4,302

Total noncurrent liabilities
1,117,372

 
13,241

 
1,130,613

Stockholders’ equity (deficit):
 
 
 
 
 
Class A common stock
9

 

 
9

Class B common stock
1

 

 
1

Accumulated other comprehensive loss
(648
)
 

 
(648
)
Additional paid in capital
12,118

 

 
12,118

Accumulated deficit
(130,966
)
 
(9,192
)
 
(140,158
)
Total stockholders’ deficit attributable to Planet Fitness Inc.
(119,486
)
 
(9,192
)
 
(128,678
)
Non-controlling interests
(17,451
)
 

 
(17,451
)
Total stockholders’ deficit
(136,937
)
 
(9,192
)
 
(146,129
)
Total liabilities and stockholders’ deficit
$
1,092,465

 
$
3,285

 
$
1,095,750


v3.19.3.a.u2
Related party transactions (Tables)
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Schedule of Related Party Transactions
Activity with franchisees considered to be related parties is summarized below.  
 
For the Year Ended
December 31,
 
2019
 
2018
 
2017
Franchise revenue
$
2,341

 
$
3,179

 
$
2,130

Equipment revenue
3,333

 
3,977

 
3,464

Total revenue from related parties
$
5,674

 
$
7,156

 
$
5,594


v3.19.3.a.u2
Equity-based compensation (Tables)
12 Months Ended
Dec. 31, 2019
Summary of Unvested Holdings Unit Activity
A summary of unvested Holdings Unit activity is presented below:
 
Holdings Units
 
Weighted average grant date fair value
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Unvested outstanding at January 1, 2019
13,485

 
$
1.52

 
 
 
 
Units granted

 

 
 
 
 
Units forfeited

 
$
1.52

 
 
 
 
Units vested
(13,485
)
 
$
1.52

 
 
 
 
Unvested outstanding at December 31, 2019

 
$

 
0
 
$


Summary of Stock Option Activity
A summary of stock option activity for the year ended December 31, 2019
 
Stock Options
 
Weighted average
exercise price
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Outstanding at January 1, 2019
1,014,205

 
$
23.62

 
 
 
 
Granted
89,161

 
$
70.79

 
 
 
 
Exercised
(89,320
)
 
$
20.01

 
 
 
 
Forfeited
(56,921
)
 
$
48.69

 
 
 
 
Outstanding at December 31, 2019
957,125

 
$
26.86

 
7.4
 
$
45,777

Vested or expected to vest at December 31, 2019
957,125

 
$
26.86

 
7.4
 
$
45,777

Exercisable at December 31, 2019
439,362

 
$
20.74

 
7.0
 
$
23,699


Restricted Stock Units  
Summary of Restricted Stock Units Activity
 
Restricted stock units
 
Weighted average
fair value
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Unvested outstanding at January 1, 2019
81,796

 
$
39.82

 
 
 
 
Granted
40,071

 
$
69.55

 
 
 
 
Vested
(27,979
)
 
$
44.43

 
 
 
 
Forfeited
(18,810
)
 
$
50.40

 
 
 
 
Unvested outstanding at December 31, 2019
75,078

 
$
51.32

 
1.8
 
$
5,607


Performance Share Units  
Summary of Restricted Stock Units Activity
 
Performance share units
 
Weighted average
fair value
 
Weighted average remaining contractual term (years)
 
Aggregate intrinsic value
Unvested outstanding at January 1, 2019

 
$

 
 
 
 
Granted
34,575

 
$
70.67

 
 
 
 
Vested

 
$

 
 
 
 
Forfeited
(2,579
)
 
$
70.44

 
 
 
 
Unvested outstanding at December 31, 2019
31,996

 
$
70.69

 
2.3
 
$
1,544


2015 Omnibus Incentive Plan  
Fair Value of Stock Option Awards Determined on Grant Date
The fair value of stock option awards granted were determined on the grant date using the Black-Scholes valuation model based on the following assumptions:
 
Year ended December 31,
 
2019
 
2018
Expected term (years)(1)
6.25

 
6.25 -6.5

Expected volatility(2)
28.0% - 28.5%


29.1% - 29.3%

Risk-free interest rate(3)
1.62% - 2.37%


2.61% - 2.88%

Dividend yield(4)
%
 
%
 
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
Based on an assumed a dividend yield of zero at the time of grant.
v3.19.3.a.u2
Earnings per share (Tables)
12 Months Ended
Dec. 31, 2019
Class A Common Stock  
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]  
Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:
 
Basic net income per share:
Year Ended December 31, 2019
 
Year Ended December 31, 2018
 
Year Ended December 31, 2017
Numerator
 
 
 
 
 
Net income
$
135,413

 
$
103,162

 
$
55,601

Less: net income attributable to non-controlling interests
17,718

 
15,141

 
22,455

Net income attributable to Planet Fitness, Inc. - basic & diluted
$
117,695

 
$
88,021

 
$
33,146

Denominator
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding - basic
82,976,620

 
87,235,021

 
78,910,390

Effect of dilutive securities:
 
 
 
 
 
Stock options
599,425

 
417,264

 
56,198

RSUs and PSUs
43,135

 
22,618

 
4,962

Weighted-average shares of Class A common stock outstanding - diluted
83,619,180

 
87,674,903

 
78,971,550

Earnings per share of Class A common stock - basic
$
1.42

 
$
1.01

 
$
0.42

Earnings per share of Class A common stock - diluted
$
1.41

 
$
1.00

 
$
0.42


v3.19.3.a.u2
Income taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Schedule of Income Before Provision for Income Taxes
Income before the provision for income taxes as shown in the accompanying consolidated statements of operations is as follows:
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
Domestic
$
171,970

 
$
128,861

 
$
426,873

Foreign
1,207

 
2,943

 
2,308

Total income before the provision for income taxes
173,177

 
131,804

 
429,181


Schedule of Provision (Benefit) for Income Taxes
The provision (benefit) for income taxes consists of the following:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
Federal
$
7,359

 
$
178

 
$
(2,600
)
State
8,280

 
3,586

 
2,941

Foreign
500

 
945

 
817

Total current tax expense
16,139

 
4,709

 
1,158

Deferred:
 
 
 
 
 
Federal
23,289

 
22,757

 
365,470

State
(1,346
)
 
946

 
6,857

Foreign
(318
)
 
230

 
95

Total deferred tax expense
21,625

 
23,933

 
372,422

Provision for income taxes
$
37,764

 
$
28,642

 
$
373,580


Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Tax Rate
A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:
 
Year Ended December 31,
 
2019
 
2018
 
2017
U.S. statutory tax rate
21.0
 %
 
21.0
 %
 
35.0
 %
State and local taxes, net of federal benefit
6.2
 %
 
5.9
 %
 
1.0
 %
State rate change impact on deferred taxes
(4.1
)%
 
(3.4
)%
 
0.8
 %
Federal rate change impact on deferred taxes
 %
 
 %
 
77.8
 %
Tax benefit arrangement liability adjustment
0.7
 %
 
0.8
 %
 
(25.8
)%
Foreign tax rate differential
 %
 
0.2
 %
 
 %
Withholding taxes and other
 %
 
(0.3
)%
 
0.1
 %
Reserve for uncertain tax position
0.1
 %
 
(0.2
)%
 
0.1
 %
Income attributable to non-controlling interests
(2.1
)%
 
(2.3
)%
 
(1.9
)%
Effective tax rate
21.8
 %
 
21.7
 %
 
87.1
 %

Schedule of Deferred Tax Assets and Liabilities Details of the Company’s deferred tax assets and liabilities are summarized as follows: 
 
Year Ended December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Deferred revenue
$
5,343

 
$
4,619

Goodwill and intangible assets
410,585

 
409,740

Other
6,633

 
4,938

Deferred tax assets
$
422,561

 
$
419,297

Deferred tax liabilities:
 
 
 
Prepaid expenses
(1,021
)
 
(922
)
Property and equipment
(10,363
)
 
(5,837
)
Total deferred tax liabilities
$
(11,384
)
 
$
(6,759
)
Total deferred tax assets and liabilities
$
411,177

 
$
412,538

Reported as:
 
 
 
Deferred income taxes - non-current assets
$
412,293

 
$
414,841

Deferred income taxes - non-current liabilities
(1,116
)
 
(2,303
)
Total deferred tax assets and liabilities
$
411,177

 
$
412,538


Summary Of Changes In Unrecognized Tax Positions
A summary of the changes in the Company’s unrecognized tax positions is as follows:
 
Year Ended December 31,
 
2019
 
2018
Balance at beginning of year
$
300

 
$
2,608

Increase related to current year tax positions
405

 

Decrease related to prior year tax positions
(285
)
 
(2,308
)
Balance at end of year
$
420

 
$
300


Schedule of Future Payments Under Tax Benefit Arrangements
Projected future payments under the tax benefit arrangements are as follows:
 
 
Amount
2020
$
26,379

2021
26,633

2022
27,195

2023
27,733

2024
28,372

Thereafter
290,904

Total
$
427,216


v3.19.3.a.u2
Segments (Tables)
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Summary of Financial Information for the Company's Reportable Segments
The tables below summarize the financial information for the Company’s reportable segments for the years ended December 31, 2019, 2018 and 2017. The “Corporate and other” column, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.
 
Year Ended December 31,
 
2019
 
2018
 
2017
Revenue
 
 
 
 
 
Franchise segment revenue - U.S.
$
271,375

 
$
219,506

 
$
147,787

Franchise segment revenue - International
6,207

 
4,634

 
2,368

Franchise segment total
277,582

 
224,140

 
150,155

Corporate-owned stores segment - U.S.
155,308

 
134,174

 
107,712

Corporate-owned stores segment - International
4,389

 
4,425

 
4,402

Corporate-owned stores segment total
159,697

 
138,599

 
112,114

Equipment segment - U.S.
251,524

 
210,159

 
167,673

Equipment segment total
251,524

 
210,159

 
167,673

Total revenue
$
688,803

 
$
572,898

 
$
429,942


 
Year Ended December 31,
 
2019
 
2018
 
2017
Segment EBITDA
 
 
 
 
 
Franchise
$
192,281

 
$
152,571

 
$
126,459

Corporate-owned stores
65,613

 
56,704

 
46,855

Equipment
59,618

 
47,607

 
38,539

Corporate and other
(46,190
)
 
(43,753
)
 
284,372

Total Segment EBITDA
$
271,322

 
$
213,129

 
$
496,225


Reconciliation of Total Segment EBITDA to Income Before Taxes
The following table reconciles total Segment EBITDA to income before taxes: 
 
Year Ended December 31,
 
2019
 
2018
 
2017
Total Segment EBITDA
$
271,322

 
$
213,129

 
$
496,225

Less:
 
 
 
 
 
Depreciation and amortization
44,346

 
35,260

 
31,761

Other income (expense)
(6,107
)
 
(6,175
)
 
316,928

Income from operations
233,083

 
184,044

 
147,536

Interest expense, net
(53,799
)
 
(46,065
)
 
(35,283
)
Other income (expense)
(6,107
)
 
(6,175
)
 
316,928

Income before income taxes
$
173,177

 
$
131,804

 
$
429,181


Summary of Company's Assets by Reportable Segment
The following table summarizes the Company’s assets by reportable segment: 
 
December 31, 2019
 
December 31, 2018
Franchise
$
193,504

 
$
185,899

Corporate-owned stores
471,234

 
243,221

Equipment
197,656

 
210,462

Unallocated
854,796

 
713,834

Total consolidated assets
$
1,717,190

 
$
1,353,416


Summary of Company's Goodwill by Reportable Segment
A rollforward of goodwill during the years ended December 31, 2019 or 2018 is as follows:
 
Franchise
 
Corporate-owned stores
 
Equipment
 
Total
As of December 31, 2017
16,938

 
67,377

 
92,666

 
176,981

Acquisition of franchisee-owned stores

 
22,532

 

 
22,532

As of December 31, 2018
16,938

 
89,909

 
92,666

 
199,513

Acquisition of franchisee-owned stores

 
28,308

 

 
28,308

As of December 31, 2019
16,938

 
118,217

 
92,666

 
227,821


The following table summarizes the Company’s goodwill by reportable segment:
 
December 31, 2019
 
December 31, 2018
Franchise
$
16,938

 
$
16,938

Corporate-owned stores
118,217

 
89,909

Equipment
92,666

 
92,666

Total consolidated goodwill
$
227,821

 
$
199,513

v3.19.3.a.u2
Corporate-owned and franchisee-owned stores (Tables)
12 Months Ended
Dec. 31, 2019
Franchisors [Abstract]  
Schedule of Changes in Corporate-owned and Franchisee-owned Stores
The following table shows changes in our corporate-owned and franchisee-owned stores for the years ended December 31, 2019, 2018 and 2017:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Franchisee-owned stores:
 
 
 
 
 
Stores operated at beginning of period
1,666

 
1,456

 
1,255

New stores opened
255

 
226

 
206

Stores debranded, sold or consolidated(1)
(18
)
 
(16
)
 
(5
)
Stores operated at end of period
1,903

 
1,666

 
1,456

Corporate-owned stores:
 
 
 
 
 
Stores operated at beginning of period
76

 
62

 
58

New stores opened
6

 
4

 
4

Stores acquired from franchisees
16

 
10

 

Stores operated at end of period
98

 
76

 
62

Total stores:
 
 
 
 
 
Stores operated at beginning of period
1,742

 
1,518

 
1,313

New stores opened
261

 
230

 
210

Stores debranded, sold or consolidated(1)
(2
)
 
(6
)
 
(5
)
Stores operated at end of period
2,001

 
1,742

 
1,518

 
(1)
The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
v3.19.3.a.u2
Quarterly financial data (unaudited) (Tables)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Schedule of Quarterly Financial Data
 
For the quarter ended
 
March 31,
2019
 
June 30,
2019
 
September 30,
2019
 
December 31,
2019
Total revenue
$
148,817

 
$
181,661

 
$
166,815

 
$
191,510

Income from operations
53,185

 
65,266

 
53,061

 
61,571

Net income
31,639

 
39,827

 
29,692

 
34,255

Net income attributable to Planet Fitness, Inc.
27,409

 
34,844

 
25,777

 
29,665

Earnings per share:
 
 
 
 
 
 
 
Class A - Basic
$
0.33

 
$
0.41

 
$
0.31

 
$
0.37

Class A - Diluted
$
0.32

 
$
0.41

 
$
0.31

 
$
0.36

 
For the quarter ended
 
March 31,
2018
 
June 30,
2018
 
September 30,
2018
 
December 31,
2018
Total revenue
$
121,333

 
$
140,550

 
$
136,656

 
$
174,359

Income from operations
38,918

 
48,811

 
43,573

 
52,742

Net income
23,493

 
30,418

 
20,472

 
28,779

Net income attributable to Planet Fitness, Inc.
19,880

 
25,874

 
17,471

 
24,796

Earnings per share:
 
 
 
 
 
 
 
Class A - Basic
$
0.23

 
$
0.30

 
$
0.20

 
$
0.29

Class A - Diluted
$
0.23

 
$
0.29

 
$
0.20

 
$
0.29


v3.19.3.a.u2
Business organization - Additional Information (Detail)
1 Months Ended 12 Months Ended
May 10, 2017
$ / shares
shares
Mar. 14, 2017
$ / shares
shares
May 31, 2017
$ / shares
shares
Mar. 31, 2017
$ / shares
shares
Dec. 31, 2019
member
store
state
segment
shares
Dec. 31, 2018
store
shares
Dec. 31, 2017
store
shares
Dec. 31, 2016
store
Aug. 05, 2015
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of members | member         14,400,000        
Number of owned and franchised locations | store         2,001 1,742 1,518 1,313  
Number of states in which entity operates | state         50        
Number of reportable segments | segment         3        
Continuing LLC Owners                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Stock issued during period, shares, conversion of units (in shares)         885,810 1,736,020 4,762,943    
Percentage of economic interest (in percentage)         9.80%        
Class A Common Stock                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of stock issued during period (in shares) 16,085,510 15,000,000     885,810 1,736,020 4,762,943    
Share price (in usd per share) | $ / shares $ 20.28 $ 20.44              
Class A Common Stock | Direct TSG Investors                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of stock issued during period (in shares) 5,215,691 4,790,758              
Class A Common Stock | Continuing LLC Owners                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of stock issued during period (in shares) 10,869,819 10,209,242     885,810 1,736,020 4,762,943    
Number of shares exchanged (in shares)         885,810 1,736,020      
Class A Common Stock | Secondary Offering                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of stock issued during period (in shares)     16,085,510 15,000,000          
Share price (in usd per share) | $ / shares     $ 20.28 $ 20.44          
Class A Common Stock | Secondary Offering | Direct TSG Investors                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of stock issued during period (in shares)     5,215,691 4,790,758          
Class A Common Stock | Secondary Offering | Holdings Units                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of stock issued during period (in shares)     10,869,819 10,209,242          
Class B Common Stock                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of shares exchanged (in shares)         885,810 1,736,020 4,762,943    
Class B Common Stock | Continuing LLC Owners                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of shares exchanged (in shares) 10,869,819 10,209,242     885,810 1,736,020 4,762,943    
Class B Common Stock | Secondary Offering | Holdings Units                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of shares exchanged (in shares)     10,869,819 10,209,242          
Pla-Fit Holdings, LLC                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Percentage of ownership (in percentage)         100.00%       100.00%
Percentage of economic interest (in percentage)         90.20%        
Pla-Fit Holdings, LLC                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of units held by owners (in shares) 10,869,819 10,209,242     885,810 1,736,020 4,762,943    
Pla-Fit Holdings, LLC | Secondary Offering                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Number of units held by owners (in shares)     10,869,819 10,209,242          
Pla-Fit Holdings, LLC | Planet Intermediate, LLC                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Percentage of ownership (in percentage)                 100.00%
Planet Intermediate, LLC | Planet Fitness Holdings, LLC                  
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]                  
Percentage of ownership (in percentage)                 100.00%
v3.19.3.a.u2
Summary of significant accounting policies - Additional Information (Detail)
9 Months Ended 12 Months Ended
Jan. 01, 2019
USD ($)
Sep. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
vendor
agreement
Dec. 31, 2018
USD ($)
vendor
Dec. 31, 2017
USD ($)
vendor
Jan. 01, 2018
USD ($)
Dec. 31, 2016
USD ($)
Significant Accounting Policies [Line Items]              
Restricted cash     $ 42,539,000 $ 30,708,000      
Stockholders' deficit     707,754,000 382,789,000 $ 136,937,000 $ 146,129,000 $ 214,755,000
Total deferred revenue     62,054,000 49,862,000      
Selling, general and administrative     78,818,000 72,446,000 60,369,000    
Present value of lease liabilities     170,008,000        
Cumulative translation adjustment     (1,713,000) (9,192,000)      
Impairment charges   $ 0 $ 0 0 0    
Number of tax receivable agreements | agreement     2        
Applicable tax savings (in percentage)     85.00%        
Percentage of remaining tax savings (in percentage)     15.00%        
TRA Holders              
Significant Accounting Policies [Line Items]              
Liability payable under tax benefit obligations     $ 427,216,000        
Selling, General and Administrative Expnses              
Significant Accounting Policies [Line Items]              
Advertising expenses     13,749,000 12,101,000 9,906,000    
Placement Services              
Significant Accounting Policies [Line Items]              
Selling, general and administrative     $ 7,063,000 5,397,000 4,601,000    
Individual Franchise Agreements              
Significant Accounting Policies [Line Items]              
Franchisee initial term     10 years        
Accounting Standards Update 2016-02              
Significant Accounting Policies [Line Items]              
Present value of lease liabilities $ 130,000            
Cumulative translation adjustment $ 1,713,000            
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09              
Significant Accounting Policies [Line Items]              
Restricted cash       0      
Stockholders' deficit       (14,033,000) 9,192,000    
Total deferred revenue         $ 12,477,000    
Selling, general and administrative       $ 0      
Equipment Purchase | Supplier Concentration Risk              
Significant Accounting Policies [Line Items]              
Number of vendors | vendor     3 2 1    
Equipment Purchase | Supplier Concentration Risk | Vendor one              
Significant Accounting Policies [Line Items]              
Purchases from vendor     48.00% 76.00% 91.00%    
Equipment Purchase | Supplier Concentration Risk | Vendor two              
Significant Accounting Policies [Line Items]              
Purchases from vendor     35.00% 13.00%      
Equipment Purchase | Supplier Concentration Risk | Vendor three              
Significant Accounting Policies [Line Items]              
Purchases from vendor     12.00%        
Advertising Purchase | Supplier Concentration Risk              
Significant Accounting Policies [Line Items]              
Number of vendors | vendor     2 1 1    
Advertising Purchase | Supplier Concentration Risk | Vendor one              
Significant Accounting Policies [Line Items]              
Purchases from vendor     38.00% 65.00% 63.00%    
Advertising Purchase | Supplier Concentration Risk | Vendor two              
Significant Accounting Policies [Line Items]              
Purchases from vendor     15.00%        
Maximum              
Significant Accounting Policies [Line Items]              
Insured amount     $ 250,000,000        
Remaining lease term     10 years        
Renewal term     10 years        
Maximum | Area Development Agreements              
Significant Accounting Policies [Line Items]              
Franchisee initial term     10 years        
Maximum | Transfer Fees              
Significant Accounting Policies [Line Items]              
Total deferred revenue     $ 25,000        
Minimum              
Significant Accounting Policies [Line Items]              
Remaining lease term     1 year        
Renewal term     3 years        
Minimum | Area Development Agreements              
Significant Accounting Policies [Line Items]              
Franchisee initial term     5 years        
Minimum | Transfer Fees              
Significant Accounting Policies [Line Items]              
Total deferred revenue     $ 10,000        
Planet Fitness NAF, LLC              
Significant Accounting Policies [Line Items]              
Percentage of franchise membership billing revenue     2.00%        
v3.19.3.a.u2
Summary of significant accounting policies - Summary of Estimated Useful Lives of Company's Fixed assets (Detail)
12 Months Ended
Dec. 31, 2019
Buildings and building improvements | Minimum  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 20 years
Buildings and building improvements | Maximum  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 40 years
Information technology and systems | Minimum  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 3 years
Information technology and systems | Maximum  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 5 years
Furniture and fixtures  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 5 years
Fitness equipment | Minimum  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 5 years
Fitness equipment | Maximum  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 7 years
Vehicles  
Significant Accounting Policies [Line Items]  
Property, plant and equipment, estimated useful lives 5 years
v3.19.3.a.u2
Summary of significant accounting policies - Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Carrying value    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt $ 1,735,000 $ 1,197,000
Estimated fair value    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt $ 1,765,805 $ 1,188,985
v3.19.3.a.u2
Variable interest entities - Carrying Value of Variable Interest Entities of Consolidated Financial Statements (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Variable Interest Entity [Line Items]    
Assets $ 4,888 $ 8,350
Liabilities 0 0
PF Melville    
Variable Interest Entity [Line Items]    
Assets 2,682 4,787
Liabilities 0 0
MMR    
Variable Interest Entity [Line Items]    
Assets 2,206 3,563
Liabilities $ 0 $ 0
v3.19.3.a.u2
Variable interest entities - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Maximum obligation of guarantees of leases and debt $ 10,309 $ 732
Franchisee lease term, maximum 10 years  
v3.19.3.a.u2
National advertising fund - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Related Party Transaction [Line Items]      
Initial administrative fees charged $ 5,674 $ 7,156 $ 5,594
Planet Fitness NAF, LLC      
Related Party Transaction [Line Items]      
Percentage of franchise membership billing revenue 2.00%    
Percentage of monthly membership billing contribution 2.00%    
v3.19.3.a.u2
Acquisition - Narrative (Details)
$ in Thousands
Dec. 16, 2019
USD ($)
store
May 30, 2019
USD ($)
store
Aug. 10, 2018
USD ($)
store
Jan. 01, 2018
USD ($)
store
Dec. 31, 2019
store
Dec. 31, 2018
store
Dec. 31, 2017
store
Dec. 31, 2016
store
Business Acquisition [Line Items]                
Number of owned and franchised locations | store         2,001 1,742 1,518 1,313
New Jersey Acquisition                
Business Acquisition [Line Items]                
Number of owned and franchised locations | store 12              
Acquisition, gross cash payments $ 37,812              
Loss on reacquired franchise rights 1,810              
Consideration transferred $ 36,002              
Maine Acquisition                
Business Acquisition [Line Items]                
Number of owned and franchised locations | store   4            
Acquisition, gross cash payments   $ 14,801            
Colorado Acquisition                
Business Acquisition [Line Items]                
Number of owned and franchised locations | store     4          
Acquisition, gross cash payments     $ 17,249          
Loss on reacquired franchise rights     10          
Consideration transferred     $ 17,239          
Long Island Acquisition                
Business Acquisition [Line Items]                
Number of owned and franchised locations | store       6        
Acquisition, gross cash payments       $ 28,503        
Loss on reacquired franchise rights       350        
Consideration transferred       $ 28,153        
v3.19.3.a.u2
Acquisition - Purchase Consideration Allocation (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 16, 2019
May 30, 2019
Dec. 31, 2018
Aug. 10, 2018
Jan. 01, 2018
Dec. 31, 2017
Business Acquisition [Line Items]              
Goodwill $ 227,821     $ 199,513   $ 176,981 $ 176,981
New Jersey Acquisition              
Business Acquisition [Line Items]              
Fixed assets   $ 3,044          
Other assets   314          
Goodwill   21,069          
Liabilities assumed, including deferred revenues   (443)          
Net assets acquired   36,002          
Maine Acquisition              
Business Acquisition [Line Items]              
Fixed assets     $ 999        
Unfavorable leases, net     (140)        
Other assets     78        
Goodwill     7,239        
Liabilities assumed, including deferred revenues     (145)        
Net assets acquired     14,801        
Colorado Acquisition              
Business Acquisition [Line Items]              
Fixed assets         $ 3,873    
Other assets         143    
Goodwill         8,476    
Liabilities assumed, including deferred revenues         (83)    
Net assets acquired         17,239    
Long Island Acquisition              
Business Acquisition [Line Items]              
Fixed assets           4,672  
Other assets           275  
Goodwill           14,056  
Liabilities assumed, including deferred revenues           (310)  
Net assets acquired           28,153  
Reacquired franchise rights | New Jersey Acquisition              
Business Acquisition [Line Items]              
Intangible assets   9,480          
Reacquired franchise rights | Maine Acquisition              
Business Acquisition [Line Items]              
Intangible assets     6,740        
Reacquired franchise rights | Colorado Acquisition              
Business Acquisition [Line Items]              
Intangible assets         4,610    
Reacquired franchise rights | Long Island Acquisition              
Business Acquisition [Line Items]              
Intangible assets           7,640  
Customer relationships | New Jersey Acquisition              
Business Acquisition [Line Items]              
Intangible assets   940          
Customer relationships | Maine Acquisition              
Business Acquisition [Line Items]              
Intangible assets     $ 30        
Customer relationships | Colorado Acquisition              
Business Acquisition [Line Items]              
Intangible assets         140    
Customer relationships | Long Island Acquisition              
Business Acquisition [Line Items]              
Intangible assets           1,150  
Favorable leases, net | New Jersey Acquisition              
Business Acquisition [Line Items]              
Intangible assets   1,508          
Favorable leases, net | Colorado Acquisition              
Business Acquisition [Line Items]              
Intangible assets         $ 80    
Favorable leases, net | Long Island Acquisition              
Business Acquisition [Line Items]              
Intangible assets           520  
Reacquired area development rights | New Jersey Acquisition              
Business Acquisition [Line Items]              
Intangible assets   $ 90          
Reacquired area development rights | Long Island Acquisition              
Business Acquisition [Line Items]              
Intangible assets           $ 150  
v3.19.3.a.u2
Property and equipment - Schedule of Property and Equipment (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 219,102 $ 167,453  
Accumulated Depreciation (73,621) (53,086)  
Total 145,481 114,367 $ 83,327
Land      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 1,341 1,341  
Equipment      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 51,039 40,895  
Leasehold improvements      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 97,977 76,832  
Buildings and improvements      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 8,589 8,632  
Furniture & fixtures      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 19,129 13,827  
Information technology and systems assets      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 35,419 17,238  
Other      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 2,192 1,593  
Construction in progress      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 3,416 $ 7,095  
v3.19.3.a.u2
Property and equipment - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Property, Plant and Equipment [Abstract]      
Depreciation expense $ 27,987 $ 19,540 $ 13,886
v3.19.3.a.u2
Leases - Additional Information (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Lessee, Lease, Description [Line Items]      
Rental expense   $ 24,900 $ 20,296
Lease payments for leases signed but not yet commenced $ 19,235    
Minimum      
Lessee, Lease, Description [Line Items]      
Remaining lease term 1 year    
Renewal term 3 years    
Maximum      
Lessee, Lease, Description [Line Items]      
Remaining lease term 10 years    
Renewal term 10 years    
v3.19.3.a.u2
Leases - Balance Sheet Classification of Lease Assets and Liabilities (Details)
$ in Thousands
Dec. 31, 2019
USD ($)
Leases [Abstract]  
Operating lease assets $ 155,633
Finance lease assets 309
Total lease assets 155,942
Current operating lease liabilities 16,755
Noncurrent operating lease liabilities 152,920
Noncurrent finance lease liabilities 333
Total lease liabilities $ 170,008
Weighted-average remaining lease term (years) - operating leases 8 years 7 months 6 days
Weighted-average discount rate - operating leases 5.00%
v3.19.3.a.u2
Leases - Components of Lease Cost (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Leases [Abstract]  
Operating lease cost $ 20,635
Variable lease cost 8,323
Total lease cost $ 28,958
v3.19.3.a.u2
Leases - Supplemental Disclosures of Cash Flow Information (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Leases [Abstract]  
Cash paid for lease liabilities $ 19,502
Operating assets obtained in exchange for operating lease liabilities $ 43,016
v3.19.3.a.u2
Leases - Maturities of Lease Liabilities (Details)
$ in Thousands
Dec. 31, 2019
USD ($)
Leases [Abstract]  
2020 $ 24,756
2021 25,471
2022 25,709
2023 25,144
2024 23,077
Thereafter 88,141
Total lease payments 212,298
Less: imputed interest 42,290
Present value of lease liabilities $ 170,008
v3.19.3.a.u2
Leases - Under Previous Guidance (Details)
$ in Thousands
Dec. 31, 2018
USD ($)
Leases [Abstract]  
2019 $ 15,911
2020 15,219
2021 13,454
2022 12,561
2023 11,133
Thereafter 45,324
Total $ 113,602
v3.19.3.a.u2
Goodwill and intangible assets - Summary of Goodwill and Intangible Assets (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Goodwill And Intangible Assets [Line Items]        
Gross carrying amount $ 211,693 $ 198,429    
Accumulated amortization (124,372) (110,399)    
Net carrying amount 87,321 88,030    
Total intangible assets, Gross carrying amount 358,293 344,729    
Total intangible assets, Net carrying Amount 233,921 234,330 $ 235,657  
Goodwill, Gross carrying amount 227,821 199,513    
Goodwill, Accumulated amortization 0 0    
Total consolidated goodwill 227,821 199,513 $ 176,981 $ 176,981
Trade and brand names        
Goodwill And Intangible Assets [Line Items]        
Indefinite-lived intangible, Net carrying Amount $ 146,600 $ 146,300    
Customer relationships        
Goodwill And Intangible Assets [Line Items]        
Weighted average amortization period (years) 11 years 11 years    
Gross carrying amount $ 174,033 $ 173,063    
Accumulated amortization (112,114) (99,439)    
Net carrying amount $ 61,919 $ 73,624    
Favorable leases        
Goodwill And Intangible Assets [Line Items]        
Weighted average amortization period (years)   8 years    
Gross carrying amount   $ 4,017    
Accumulated amortization   (2,345)    
Net carrying amount   $ 1,672    
Reacquired franchise rights        
Goodwill And Intangible Assets [Line Items]        
Weighted average amortization period (years) 8 years 7 years    
Gross carrying amount $ 37,660 $ 21,349    
Accumulated amortization (12,258) (8,615)    
Net carrying amount $ 25,402 $ 12,734    
v3.19.3.a.u2
Goodwill and intangible assets - Additional Information (Detail)
9 Months Ended 12 Months Ended
Sep. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
store
Dec. 31, 2018
USD ($)
store
Dec. 31, 2017
USD ($)
store
Dec. 31, 2016
store
Goodwill And Intangible Assets [Line Items]          
Impairment charges | $ $ 0 $ 0 $ 0 $ 0  
Number of owned and franchised locations | store   2,001 1,742 1,518 1,313
Amortization of intangible assets | $   $ 16,359,000 $ 15,720,000 $ 17,876,000  
New Jersey Acquisition and Maine Acquisition          
Goodwill And Intangible Assets [Line Items]          
Number of owned and franchised locations | store   16      
v3.19.3.a.u2
Goodwill and intangible assets - Goodwill Rollforward (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Goodwill [Roll Forward]    
Beginning balance $ 199,513 $ 176,981
Acquisitions 28,308 22,532
Ending balance 227,821 199,513
Franchise    
Goodwill [Roll Forward]    
Beginning balance 16,938 16,938
Acquisitions 0 0
Ending balance 16,938 16,938
Corporate-owned stores    
Goodwill [Roll Forward]    
Beginning balance 89,909 67,377
Acquisitions 28,308 22,532
Ending balance 118,217 89,909
Equipment revenue    
Goodwill [Roll Forward]    
Beginning balance 92,666 92,666
Acquisitions 0 0
Ending balance $ 92,666 $ 92,666
v3.19.3.a.u2
Goodwill and intangible assets - Summary of Amortization expenses (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]    
2020 $ 16,845  
2021 16,636  
2022 16,728  
2023 16,558  
2024 14,067  
Thereafter 6,487  
Net carrying amount $ 87,321 $ 88,030
v3.19.3.a.u2
Long-term debt - Schedule of Long-term Debt (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Debt Instrument [Line Items]      
Total debt, excluding deferred financing costs $ 1,735,000 $ 1,197,000  
Deferred financing costs, net of accumulated amortization (29,995) (24,873)  
Total debt 1,705,005 1,172,127  
Current portion of long-term debt and Variable Funding Note 17,500 12,000 $ 7,185
Long-term debt, net of current maturities 1,687,505 1,160,127 $ 696,576
2018-1 Class A-2-I notes | Senior Notes      
Debt Instrument [Line Items]      
Total debt, excluding deferred financing costs 567,813 573,563  
2018-1 Class A-2-II notes | Senior Notes      
Debt Instrument [Line Items]      
Total debt, excluding deferred financing costs 617,187 623,437  
2019-1 Class A-2 notes | Senior Notes      
Debt Instrument [Line Items]      
Total debt, excluding deferred financing costs $ 550,000 $ 0  
v3.19.3.a.u2
Long-term debt - Additional Information (Detail)
1 Months Ended 12 Months Ended
Dec. 03, 2019
USD ($)
Aug. 01, 2018
USD ($)
extension
May 26, 2017
Sep. 30, 2023
Aug. 31, 2018
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Debt Instrument [Line Items]                
Debt issuance costs $ 10,577,000 $ 27,133,000       $ 10,577,000 $ 27,133,000 $ 1,278,000
Restricted cash           42,539,000 30,708,000  
Loss on extinguishment of debt         $ 4,570,000 0 4,570,000 79,000
Third party debt refinancing expense           $ 0 $ 0 1,021,000
Term Loan B                
Debt Instrument [Line Items]                
Decrease in interest rate margin for term loan borrowings     (0.50%)          
Additional reduction in interest rate margin for term loan borrowings     (0.25%)          
Term Loan B | Maximum                
Debt Instrument [Line Items]                
Total net leverage ratio     3.50          
Revolving Credit Facility                
Debt Instrument [Line Items]                
Decrease in interest rate margin for term loan borrowings     (0.25%)          
Revolving Credit Facility | Variable Funding Notes                
Debt Instrument [Line Items]                
Debt, face amount   $ 75,000,000            
Commitment fee percentage   0.50%            
Number of additional extensions | extension   2            
Term of extension   1 year            
Amended Credit Facility                
Debt Instrument [Line Items]                
Capitalized and deferred financing costs               257,000
Amended Credit Facility | Other Expense                
Debt Instrument [Line Items]                
Third party debt refinancing expense               1,021,000
Amended Credit Facility | Interest Expense                
Debt Instrument [Line Items]                
Loss on extinguishment of debt               $ 79,000
2018-1 Class A-2-I notes | Senior Notes                
Debt Instrument [Line Items]                
Interest rate   4.262%            
Debt, face amount   $ 575,000,000            
2018-1 Class A-2-II notes | Senior Notes                
Debt Instrument [Line Items]                
Interest rate   4.666%            
Debt, face amount   $ 625,000,000            
2019-1 Class A-2 notes | Senior Notes                
Debt Instrument [Line Items]                
Interest rate 3.858%              
Debt, face amount $ 550,000,000              
Scenario, Forecast | Revolving Credit Facility | Variable Funding Notes                
Debt Instrument [Line Items]                
Interest rate during period       5.00%        
Interest Rate Cap | Cash Flow Hedging                
Debt Instrument [Line Items]                
Notional amount   $ 219,837,000            
London Interbank Offered Rate (LIBOR) | Term Loan B                
Debt Instrument [Line Items]                
Decrease in interest rate margin, variable rate for term loan borrowings     3.00%          
v3.19.3.a.u2
Long-term debt - Schedule of Future Annual Payments of Long-term Debt (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Debt Disclosure [Abstract]    
2020 $ 17,500  
2021 17,500  
2022 568,063  
2023 11,750  
2024 11,750  
Thereafter 1,108,437  
Total $ 1,735,000 $ 1,197,000
v3.19.3.a.u2
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Unrealized gain on interest rate caps, net of tax $ 989,000 $ 1,143,000  
Interest Rate Cap      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Interest rate caps $ 0   $ 0
Unrealized gain on interest rate caps, net of tax   1,143,000  
Unrealized gain (loss) on interest rate caps, tax   $ 280,000  
v3.19.3.a.u2
Revenue recognition - Narrative (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Dec. 31, 2016
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Cumulative effect of transition to ASC 606 $ 707,754 $ 382,789 $ 146,129 $ 136,937 $ 214,755
Equipment deposits $ 3,008 7,908      
Deferred revenue expected recognition period 12 months        
Deferred revenue $ 62,054 49,862      
Deferred income taxes $ 412,293 414,841 $ 411,067    
Total adjustments | Accounting Standards Update 2014-09          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Cumulative effect of transition to ASC 606   (14,033)   9,192  
Deferred revenue       12,477  
Deferred income taxes   $ (3,285)   $ 3,285  
v3.19.3.a.u2
Revenue recognition - Schedule of Contract Liabilities (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Contract liabilities  
Beginning Balance $ 49,862
Revenue recognized that was included in the contract liability at the beginning of the year (25,600)
Increase, excluding amounts recognized as revenue during the period 37,792
Ending Balance $ 62,054
v3.19.3.a.u2
Revenue recognition - Remaining Performance Obligation (Details)
$ in Thousands
Dec. 31, 2019
USD ($)
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 62,054
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 27,596
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 3,748
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 3,410
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 3,310
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 3,050
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01  
Revenue from Contract with Customer [Abstract]  
Remaining performance obligation $ 20,940
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, expected timing of satisfaction
v3.19.3.a.u2
Revenue recognition - Schedule of Deferred Revenue (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Deferred Revenue Arrangement [Line Items]      
Total deferred revenue $ 62,054 $ 49,862  
Long-term portion of deferred revenue 34,458 26,374 $ 21,681
Current portion of deferred revenue 27,596 23,488 $ 18,319
Prepaid membership fees      
Deferred Revenue Arrangement [Line Items]      
Total deferred revenue 7,231 6,085  
Enrollment fees      
Deferred Revenue Arrangement [Line Items]      
Total deferred revenue 915 1,104  
Equipment discount      
Deferred Revenue Arrangement [Line Items]      
Total deferred revenue 3,796 3,855  
Annual membership fees      
Deferred Revenue Arrangement [Line Items]      
Total deferred revenue 12,185 10,142  
Area development and franchise fees      
Deferred Revenue Arrangement [Line Items]      
Total deferred revenue $ 37,927 $ 28,676  
v3.19.3.a.u2
Revenue recognition - Balance Sheet (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Dec. 31, 2016
Current assets:          
Cash and cash equivalents $ 436,256 $ 289,431 $ 113,080    
Restricted cash 42,539 30,708      
Accounts receivable, net 42,268 38,960 37,272    
Due from related parties   0 3,020    
Inventory 877 5,122 2,692    
Restricted assets – national advertising fund   0 499    
Prepaid expenses 8,025 4,947 3,929    
Other receivables 9,226 12,548 9,562    
Other current assets     6,947    
Income tax receivable 947 6,824      
Total current assets 540,138 388,540 177,001    
Property and equipment, net 145,481 114,367 83,327    
Intangible assets, net 233,921 234,330 235,657    
Goodwill 227,821 199,513 176,981 $ 176,981  
Deferred income taxes 412,293 414,841 411,067    
Other assets, net 1,903 1,825 11,717    
Total assets 1,717,190 1,353,416 1,095,750    
Current liabilities:          
Current maturities of long-term debt 17,500 12,000 7,185    
Accounts payable 21,267 30,428 28,648    
Accrued expenses 31,623 32,384 18,590    
Equipment deposits   7,908 6,498    
Restricted liabilities – national advertising fund   0 490    
Deferred revenue, current 27,596 23,488 18,319    
Payable pursuant to tax benefit arrangements, current 26,468 24,765 31,062    
Other current liabilities 18,016 430 474    
Total current liabilities 145,478 131,403 111,266    
Long-term debt, net of current maturities 1,687,505 1,160,127 696,576    
Deferred rent, net of current portion   10,083 6,127    
Deferred revenue, net of current portion 34,458 26,374 21,681    
Deferred tax liabilities 1,116 2,303 1,629    
Payable pursuant to tax benefit arrangements, net of current portion 400,748 404,468 400,298    
Other liabilities 2,719 1,447 4,302    
Total noncurrent liabilities 2,279,466 1,604,802 1,130,613    
Stockholders’ equity (deficit):          
Accumulated other comprehensive loss 303 94 (648)    
Additional paid in capital 29,820 19,732 12,118    
Accumulated deficit (736,587) (394,410) (140,158)    
Total stockholders’ deficit attributable to Planet Fitness, Inc. (706,455) (374,574) (128,678)    
Non-controlling interests (1,299) (8,215) (17,451)    
Total stockholders’ deficit (707,754) (382,789) (146,129) (136,937) $ (214,755)
Total liabilities and stockholders’ deficit 1,717,190 1,353,416 1,095,750    
Class A Common Stock          
Stockholders’ equity (deficit):          
Common stock, value 8 9 9    
Class B Common Stock          
Stockholders’ equity (deficit):          
Common stock, value $ 1 1 $ 1    
Total adjustments | Accounting Standards Update 2014-09          
Current assets:          
Cash and cash equivalents   0   0  
Restricted cash   0      
Accounts receivable, net   0   0  
Due from related parties   0   0  
Inventory   0   0  
Restricted assets – national advertising fund   425   0  
Prepaid expenses   0   0  
Other receivables   0   0  
Other current assets       0  
Income tax receivable   (1,437)      
Total current assets   (1,012)   0  
Property and equipment, net   0   0  
Intangible assets, net   0   0  
Goodwill   0   0  
Deferred income taxes   (3,285)   3,285  
Other assets, net   0   0  
Total assets   (4,297)   3,285  
Current liabilities:          
Current maturities of long-term debt   0   0  
Accounts payable   0   0  
Accrued expenses   0   0  
Equipment deposits   0   0  
Restricted liabilities – national advertising fund   0   0  
Deferred revenue, current   118   (764)  
Payable pursuant to tax benefit arrangements, current   0   0  
Other current liabilities   0   0  
Total current liabilities   118   (764)  
Long-term debt, net of current maturities   0   0  
Deferred rent, net of current portion   0   0  
Deferred revenue, net of current portion   (18,448)   13,241  
Deferred tax liabilities   0   0  
Payable pursuant to tax benefit arrangements, net of current portion   0   0  
Other liabilities   0   0  
Total noncurrent liabilities   (18,448)   13,241  
Stockholders’ equity (deficit):          
Accumulated other comprehensive loss   0   0  
Additional paid in capital   0   0  
Accumulated deficit   13,391   (9,192)  
Total stockholders’ deficit attributable to Planet Fitness, Inc.   13,391   (9,192)  
Non-controlling interests   642   0  
Total stockholders’ deficit   14,033   (9,192)  
Total liabilities and stockholders’ deficit   (4,297)   3,285  
Total adjustments | Accounting Standards Update 2014-09 | Class A Common Stock          
Stockholders’ equity (deficit):          
Common stock, value   0   0  
Total adjustments | Accounting Standards Update 2014-09 | Class B Common Stock          
Stockholders’ equity (deficit):          
Common stock, value   0   0  
Amounts under Previous Standards          
Current assets:          
Cash and cash equivalents   289,431   113,080  
Restricted cash   30,708      
Accounts receivable, net   38,960   37,272  
Due from related parties   0   3,020  
Inventory   5,122   2,692  
Restricted assets – national advertising fund   425   499  
Prepaid expenses   4,947   3,929  
Other receivables   12,548   9,562  
Other current assets       6,947  
Income tax receivable   5,387      
Total current assets   387,528   177,001  
Property and equipment, net   114,367   83,327  
Intangible assets, net   234,330   235,657  
Goodwill   199,513   176,981  
Deferred income taxes   411,556   407,782  
Other assets, net   1,825   11,717  
Total assets   1,349,119   1,092,465  
Current liabilities:          
Current maturities of long-term debt   12,000   7,185  
Accounts payable   30,428   28,648  
Accrued expenses   32,384   18,590  
Equipment deposits   7,908   6,498  
Restricted liabilities – national advertising fund   0   490  
Deferred revenue, current   23,606   19,083  
Payable pursuant to tax benefit arrangements, current   24,765   31,062  
Other current liabilities   430   474  
Total current liabilities   131,521   112,030  
Long-term debt, net of current maturities   1,160,127   696,576  
Deferred rent, net of current portion   10,083   6,127  
Deferred revenue, net of current portion   7,926   8,440  
Deferred tax liabilities   2,303   1,629  
Payable pursuant to tax benefit arrangements, net of current portion   404,468   400,298  
Other liabilities   1,447   4,302  
Total noncurrent liabilities   1,586,354   1,117,372  
Stockholders’ equity (deficit):          
Accumulated other comprehensive loss   94   (648)  
Additional paid in capital   19,732   12,118  
Accumulated deficit   (381,019)   (130,966)  
Total stockholders’ deficit attributable to Planet Fitness, Inc.   (361,183)   (119,486)  
Non-controlling interests   (7,573)   (17,451)  
Total stockholders’ deficit   (368,756)   (136,937)  
Total liabilities and stockholders’ deficit   1,349,119   1,092,465  
Amounts under Previous Standards | Class A Common Stock          
Stockholders’ equity (deficit):          
Common stock, value   9   9  
Amounts under Previous Standards | Class B Common Stock          
Stockholders’ equity (deficit):          
Common stock, value   $ 1   $ 1  
v3.19.3.a.u2
Revenue recognition - Income Statement (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenue:                      
Total revenue $ 191,510 $ 166,815 $ 181,661 $ 148,817 $ 174,359 $ 136,656 $ 140,550 $ 121,333 $ 688,803 $ 572,898 $ 429,942
Operating costs and expenses:                      
Cost of revenue                 194,449 162,646 129,266
Store operations                 86,108 75,005 60,657
Selling, general and administrative                 78,818 72,446 60,369
National advertising fund expense                 50,153 42,619 0
Depreciation and amortization                 44,346 35,260 31,761
Other loss (gain)                 1,846 878 353
Total operating costs and expenses                 455,720 388,854 282,406
Income from operations 61,571 53,061 65,266 53,185 52,742 43,573 48,811 38,918 233,083 184,044 147,536
Other expense, net:                      
Interest income                 7,053 4,681 54
Interest expense                 (60,852) (50,746) (35,337)
Other (expense) income                 (6,107) (6,175) 316,928
Total other expense, net                 (59,906) (52,240) 281,645
Income before income taxes                 173,177 131,804 429,181
Provision for income taxes                 37,764 28,642 373,580
Net income 34,255 29,692 39,827 31,639 28,779 20,472 30,418 23,493 135,413 103,162 55,601
Less net income attributable to non-controlling interests                 17,718 15,141 22,455
Net income attributable to Planet Fitness, Inc. $ 29,665 $ 25,777 $ 34,844 $ 27,409 $ 24,796 $ 17,471 $ 25,874 $ 19,880 $ 117,695 $ 88,021 $ 33,146
Class A Common Stock                      
Net income attributable to Planet Fitness, Inc.                      
Basic (usd per share) $ 0.37 $ 0.31 $ 0.41 $ 0.33 $ 0.29 $ 0.20 $ 0.30 $ 0.23 $ 1.42 $ 1.01 $ 0.42
Diluted (usd per share) $ 0.36 $ 0.31 $ 0.41 $ 0.32 $ 0.29 $ 0.20 $ 0.29 $ 0.23 $ 1.41 $ 1.00 $ 0.42
Total adjustments | Accounting Standards Update 2014-09                      
Revenue:                      
Total revenue                   $ (36,528)  
Operating costs and expenses:                      
Cost of revenue                   0  
Store operations                   0  
Selling, general and administrative                   0  
National advertising fund expense                   (42,619)  
Depreciation and amortization                   0  
Other loss (gain)                   0  
Total operating costs and expenses                   (42,619)  
Income from operations                   6,091  
Other expense, net:                      
Interest income                   0  
Interest expense                   0  
Other (expense) income                   0  
Total other expense, net                   0  
Income before income taxes                   6,091  
Provision for income taxes                   1,437  
Net income                   4,654  
Less net income attributable to non-controlling interests                   642  
Net income attributable to Planet Fitness, Inc.                   4,012  
Amounts under Previous Standards                      
Revenue:                      
Total revenue                   536,370  
Operating costs and expenses:                      
Cost of revenue                   162,646  
Store operations                   75,005  
Selling, general and administrative                   72,446  
National advertising fund expense                   0  
Depreciation and amortization                   35,260  
Other loss (gain)                   878  
Total operating costs and expenses                   346,235  
Income from operations                   190,135  
Other expense, net:                      
Interest income                   4,681  
Interest expense                   (50,746)  
Other (expense) income                   (6,175)  
Total other expense, net                   (52,240)  
Income before income taxes                   137,895  
Provision for income taxes                   30,079  
Net income                   107,816  
Less net income attributable to non-controlling interests                   15,783  
Net income attributable to Planet Fitness, Inc.                   $ 92,033  
Amounts under Previous Standards | Class A Common Stock                      
Net income attributable to Planet Fitness, Inc.                      
Basic (usd per share)                   $ 1.06  
Diluted (usd per share)                   $ 1.05  
Franchise                      
Revenue:                      
Total revenue                 $ 223,139 $ 175,314 $ 131,983
Franchise | Total adjustments | Accounting Standards Update 2014-09                      
Revenue:                      
Total revenue                   5,666  
Franchise | Amounts under Previous Standards                      
Revenue:                      
Total revenue                   180,980  
Commission income                      
Revenue:                      
Total revenue                 4,288 6,632 18,172
Commission income | Total adjustments | Accounting Standards Update 2014-09                      
Revenue:                      
Total revenue                   0  
Commission income | Amounts under Previous Standards                      
Revenue:                      
Total revenue                   6,632  
National advertising fund revenue                      
Revenue:                      
Total revenue                 50,155 42,194 0
National advertising fund revenue | Total adjustments | Accounting Standards Update 2014-09                      
Revenue:                      
Total revenue                   (42,194)  
National advertising fund revenue | Amounts under Previous Standards                      
Revenue:                      
Total revenue                   0  
Corporate-owned stores                      
Revenue:                      
Total revenue                 159,697 138,599 112,114
Corporate-owned stores | Total adjustments | Accounting Standards Update 2014-09                      
Revenue:                      
Total revenue                   0  
Corporate-owned stores | Amounts under Previous Standards                      
Revenue:                      
Total revenue                   138,599  
Equipment                      
Revenue:                      
Total revenue                 $ 251,524 210,159 $ 167,673
Equipment | Total adjustments | Accounting Standards Update 2014-09                      
Revenue:                      
Total revenue                   0  
Equipment | Amounts under Previous Standards                      
Revenue:                      
Total revenue                   $ 210,159  
v3.19.3.a.u2
Revenue recognition - Cash Flows (Details) - USD ($)
$ in Thousands
1 Months Ended 3 Months Ended 12 Months Ended
Aug. 31, 2018
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities:                        
Net income   $ 34,255 $ 29,692 $ 39,827 $ 31,639 $ 28,779 $ 20,472 $ 30,418 $ 23,493 $ 135,413 $ 103,162 $ 55,601
Adjustments to reconcile net income to net cash provided by operating activities:                        
Depreciation and amortization                   44,346 35,260 31,761
Amortization of deferred financing costs                   5,454 3,400 1,935
Amortization of favorable leases and asset retirement obligations                     375  
Amortization of interest rate caps                   0 1,170 1,755
Deferred tax expense                   21,625 23,933 372,422
Loss (gain) on re-measurement of tax benefit arrangement                   5,966 4,765 (317,354)
Provision for bad debts                   87 19 (19)
Gain on disposal of property and equipment                   (159) 462 (159)
Loss on extinguishment of debt $ 4,570                 0 4,570 79
Third party debt refinancing expense                   0 0 1,021
Loss on reacquired franchise rights                   1,810 360 0
Equity-based compensation                   4,826 5,479 2,531
Changes in operating assets and liabilities:                        
Accounts receivable                   (895) (1,923) (10,481)
Due from related parties                     3,598  
Inventory                   4,244 (2,430) (890)
Other assets and other current assets                   (3,198) 5,778 (2,981)
National advertising fund                     0  
Accounts payable and accrued expenses                   (6,268) 14,506 4,210
Other liabilities and other current liabilities                   1,687 (2,835) (470)
Income taxes                   6,231 194 (3,027)
Payments pursuant to tax benefit arrangements                   (24,998) (30,493) (11,446)
Equipment deposits                     1,410  
Deferred revenue                     9,640  
Deferred rent                   1,823 3,999 1,199
Net cash provided by operating activities                   $ 204,311 184,399 $ 131,021
Total adjustments | Accounting Standards Update 2014-09                        
Cash flows from operating activities:                        
Net income                     4,654  
Adjustments to reconcile net income to net cash provided by operating activities:                        
Depreciation and amortization                     0  
Amortization of deferred financing costs                     0  
Amortization of favorable leases and asset retirement obligations                     0  
Amortization of interest rate caps                     0  
Deferred tax expense                     0  
Loss (gain) on re-measurement of tax benefit arrangement                     0  
Provision for bad debts                     0  
Gain on disposal of property and equipment                     0  
Loss on extinguishment of debt                     0  
Third party debt refinancing expense                     0  
Loss on reacquired franchise rights                     0  
Equity-based compensation                     0  
Changes in operating assets and liabilities:                        
Accounts receivable                     0  
Due from related parties                     0  
Inventory                     0  
Other assets and other current assets                     0  
National advertising fund                     (425)  
Accounts payable and accrued expenses                     0  
Other liabilities and other current liabilities                     0  
Income taxes                     1,437  
Payments pursuant to tax benefit arrangements                     0  
Equipment deposits                     0  
Deferred revenue                     (5,666)  
Deferred rent                     0  
Net cash provided by operating activities                     0  
Amounts under Previous Standards                        
Cash flows from operating activities:                        
Net income                     107,816  
Adjustments to reconcile net income to net cash provided by operating activities:                        
Depreciation and amortization                     35,260  
Amortization of deferred financing costs                     3,400  
Amortization of favorable leases and asset retirement obligations                     375  
Amortization of interest rate caps                     1,170  
Deferred tax expense                     23,933  
Loss (gain) on re-measurement of tax benefit arrangement                     4,765  
Provision for bad debts                     19  
Gain on disposal of property and equipment                     462  
Loss on extinguishment of debt                     4,570  
Third party debt refinancing expense                     0  
Loss on reacquired franchise rights                     360  
Equity-based compensation                     5,479  
Changes in operating assets and liabilities:                        
Accounts receivable                     (1,923)  
Due from related parties                     3,598  
Inventory                     (2,430)  
Other assets and other current assets                     5,778  
National advertising fund                     (425)  
Accounts payable and accrued expenses                     14,506  
Other liabilities and other current liabilities                     (2,835)  
Income taxes                     1,631  
Payments pursuant to tax benefit arrangements                     (30,493)  
Equipment deposits                     1,410  
Deferred revenue                     3,974  
Deferred rent                     3,999  
Net cash provided by operating activities                     $ 184,399  
v3.19.3.a.u2
Related party transactions - Additional Information (Detail)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
store
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Related Party Transaction [Line Items]      
Due from related parties   $ 0  
Initial administrative fees charged $ 5,674 7,156 $ 5,594
Number of corporate-owned stores utlilizing software | store 71    
Number of franchise stores utlilizing software | store 520    
Board of Directors      
Related Party Transaction [Line Items]      
Ownership percentage 10.50%    
MMC Fox Run, LLC | Consulting agreement      
Related Party Transaction [Line Items]      
Rent, lease termination costs and termination fee     898
Direct TSG Investors      
Related Party Transaction [Line Items]      
Liability payable under tax benefit obligations $ 53,491 59,458  
Affiliated Entity | Amenity tracking compliance software      
Related Party Transaction [Line Items]      
Purchases from related party 222    
Affiliated Entity | Corporate travel      
Related Party Transaction [Line Items]      
Expense incurred for corporate travel to a third-party company 190    
Area Development Agreements      
Related Party Transaction [Line Items]      
Deferred ADA revenue from related parties 256 779  
Administrative Service | Planet Fitness NAF, LLC      
Related Party Transaction [Line Items]      
Initial administrative fees charged 2,177 $ 2,472 $ 2,150
Pending Litigation | Civil Action Brought By Former Employee      
Related Party Transaction [Line Items]      
Due from related parties $ 420    
v3.19.3.a.u2
Related party transactions - Schedule of Related Party Transactions (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Related Party Transaction [Line Items]      
Total revenue from related parties $ 5,674 $ 7,156 $ 5,594
Franchise revenue      
Related Party Transaction [Line Items]      
Total revenue from related parties 2,341 3,179 2,130
Equipment revenue      
Related Party Transaction [Line Items]      
Total revenue from related parties $ 3,333 $ 3,977 $ 3,464
v3.19.3.a.u2
Stockholder's equity - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Dec. 04, 2019
Apr. 30, 2019
Nov. 14, 2018
May 10, 2017
Mar. 14, 2017
Jun. 30, 2020
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Nov. 05, 2019
Nov. 13, 2018
Aug. 03, 2018
Class of Stock [Line Items]                        
Share repurchase program, authorized amount                   $ 500,000,000   $ 500,000,000
Repurchase and retirement of common stock             $ 458,166,000 $ 342,383,000        
Preferred stock shares authorized (in shares)             50,000,000 50,000,000        
Preferred stock shares issued (in shares)             0 0        
Preferred stock shares outstanding (in shares)             0 0        
Pla-Fit Holdings, LLC                        
Class of Stock [Line Items]                        
Number of units held by owners (in shares)       10,869,819 10,209,242   885,810 1,736,020 4,762,943      
Continuing LLC Owners                        
Class of Stock [Line Items]                        
Exchanges of Class B common stock, shares (in shares)             885,810 1,736,020 4,762,943      
Continuing LLC Owners | IPO and Secondary Offering                        
Class of Stock [Line Items]                        
Number of units held by owners (in shares)             8,561,920          
Percentage of economic interest             9.80%          
Class A Common Stock                        
Class of Stock [Line Items]                        
Number of stock issued during period (in shares)       16,085,510 15,000,000   885,810 1,736,020 4,762,943      
Share price (in usd per share)       $ 20.28 $ 20.44              
Stock repurchased (in shares)             2,272,001 824,312        
Stock repurchased             $ 458,166,000 $ 342,383,000 $ 0      
Common stock dividends paid (in usd per share)             $ 0 $ 0 $ 0      
Common stock dividends declared             $ 0 $ 0 $ 0      
Class A Common Stock | Direct TSG Investors                        
Class of Stock [Line Items]                        
Number of stock issued during period (in shares)       5,215,691 4,790,758              
Class A Common Stock | Continuing LLC Owners                        
Class of Stock [Line Items]                        
Number of stock issued during period (in shares)       10,869,819 10,209,242   885,810 1,736,020 4,762,943      
Number of shares exchanged (in shares)             885,810 1,736,020        
Class A Common Stock | Investor | IPO and Secondary Offering                        
Class of Stock [Line Items]                        
Number of stock issued during period (in shares)             78,524,624          
Percentage of voting power             90.20%          
Percentage of economic interest             90.20%          
Class B Common Stock                        
Class of Stock [Line Items]                        
Shares exchanged for Class A common stock             1          
Number of shares exchanged (in shares)             885,810 1,736,020 4,762,943      
Class B Common Stock | Continuing LLC Owners                        
Class of Stock [Line Items]                        
Number of shares exchanged (in shares)       10,869,819 10,209,242   885,810 1,736,020 4,762,943      
Class B Common Stock | Continuing LLC Owners | IPO and Secondary Offering                        
Class of Stock [Line Items]                        
Number of units held by owners (in shares)             8,561,920          
Percentage of voting power             9.80%          
Holdings Units                        
Class of Stock [Line Items]                        
Shares exchanged for Class A common stock             1          
2018 ASR Agreement                        
Class of Stock [Line Items]                        
Share repurchase program, authorized amount                     $ 300,000,000  
Repurchase and retirement of common stock   $ 60,000,000 $ 240,000,000                  
2018 ASR Agreement | Class A Common Stock                        
Class of Stock [Line Items]                        
Stock repurchased (in shares)   524,124 4,607,410                  
Weighted average cost per share (in usd per share)   $ 58.46                    
Stock repurchased             $ 157,945,000 $ 42,090,000        
2019 ASR Agreement                        
Class of Stock [Line Items]                        
Share repurchase program, authorized amount $ 300,000,000                      
Repurchase and retirement of common stock $ 240,000,000                      
2019 ASR Agreement | Class A Common Stock                        
Class of Stock [Line Items]                        
Stock repurchased (in shares) 3,289,924                      
2019 ASR Agreement | Scenario, Forecast                        
Class of Stock [Line Items]                        
Repurchase and retirement of common stock           $ 60,000,000            
v3.19.3.a.u2
Equity-based compensation - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
1 Months Ended 12 Months Ended
Aug. 31, 2015
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, compensation expense   $ 3 $ 21 $ 152
Weighted-average grant date fair value of stock options granted (in usd per share)   $ 23.23    
Selling, general and administrative   $ 78,818 72,446 $ 60,369
Total unrecognized compensation expense related to unvested stock options.   2,236    
Stock options        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Selling, general and administrative   $ 2,089 $ 3,316  
Stock options, expected recognition, weighted-average period (in years)   1 year 9 months 18 days    
Restricted Stock Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, weighted-average grant date fair value (in usd per share)   $ 51.32 $ 39.82  
Selling, general and administrative   $ 1,961 $ 1,637  
Stock options, expected recognition, weighted-average period (in years)   1 year 9 months 18 days    
Share based compensation, shares granted (in shares)   40,071    
Unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures   $ 2,033    
Performance Share Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, vest equally over a period (in years)   3 years    
Share based compensation, weighted-average grant date fair value (in usd per share)   $ 70.69 $ 0  
Selling, general and administrative   $ 355    
Stock options, expected recognition, weighted-average period (in years)   2 years 3 months 18 days    
Share based compensation, shares granted (in shares)   34,575    
Share based compensation, performance period (in years)   3 years    
Unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures   $ 1,106    
ESPP        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, compensation expense   $ 417    
Payroll deduction for ESPP, percent   10.00%    
ESPP offering period   6 months    
ESPP purchase discount, percent   85.00%    
Number of shares of common stock authorized and available for issuance under the ESPP (in shares)   1,000,000    
Shares purchased (in shares)   23,704    
Class B Common Stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, shares issued (in shares)   4,238,338    
Share based compensation, weighted-average grant date fair value (in usd per share)   $ 1.52    
Class A Common Stock | Restricted Stock Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, shares granted (in shares)   40,071    
2013 Equity Incentive Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, total unrecognized compensation   $ 0    
2013 Equity Incentive Plan | Class M Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, vest equally over a period (in years)   5 years    
Contractual term in years of stock option awards (in years)   10 years    
2013 Equity Incentive Plan | Class M Units | Tranche One        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Award vesting rights, percentage   80.00%    
2013 Equity Incentive Plan | Class M Units | IPO | Tranche One        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Award vesting rights, percentage   20.00%    
2015 Omnibus Incentive Plan | Maximum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, vest equally over a period (in years) 10 years      
Share based compensation, options granted to employees, directors and officers (in shares) 7,896,800      
2015 Omnibus Incentive Plan | Maximum | Performance Share Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Adjustment of quantity of awards earned for performance metrics, percent   200.00%    
2015 Omnibus Incentive Plan | Minimum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share based compensation, vest equally over a period (in years)   4 years    
2015 Omnibus Incentive Plan | Minimum | Performance Share Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Adjustment of quantity of awards earned for performance metrics, percent   0.00%    
v3.19.3.a.u2
Equity-based compensation - Summary of Unvested Holdings Unit Activity (Detail) - Unvested Holdings Units
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
$ / shares
shares
Holdings Units  
Units Outstanding at beginning of period (in shares) | shares 13,485
Units granted (in shares) | shares 0
Units forfeited (in shares) | shares 0
Units vested (in shares) | shares (13,485)
Units Outstanding at end of period (in shares) | shares 0
Weighted average grant date fair value  
Weighted average grant date fair value, Outstanding at beginning of period (in usd per share) | $ / shares $ 1.52
Weighted average grant date fair value, Units granted (in usd per share) | $ / shares 0
Weighted average grant date fair value, Units forfeited (in usd per share) | $ / shares 1.52
Weighted average grant date fair value, Units vested (usd per share) | $ / shares 1.52
Weighted average grant date fair value, Outstanding at end of period (in usd per share) | $ / shares $ 0
Weighted average remaining contractual term, Outstanding at end of period (in years) 0 years
Aggregate intrinsic value, Outstanding at end of period | $ $ 0
v3.19.3.a.u2
Equity-based compensation - Fair Value of Stock Option Awards Determined on Grant Date Using Black-Scholes Valuation Model (Detail)
1 Months Ended 12 Months Ended
Aug. 31, 2015
Dec. 31, 2019
Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term (years)   6 years 3 months  
Expected volatility, Minimum (percentage)   28.00% 29.10%
Expected volatility, Maximum (percentage)   28.50% 29.30%
Risk-free interest rate, Minimum (percentage)   1.62% 2.61%
Risk-free interest rate, Maximum (percentage)   2.37% 2.88%
Dividend yield (percentage) 0.00% 0.00% 0.00%
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term (years)     6 years 3 months
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term (years)     6 years 6 months
v3.19.3.a.u2
Equity-based compensation - Summary of Stock Option Activity (Detail) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Stock Options    
Stock Options, Outstanding at beginning of period (in shares) 1,014,205  
Stock Options, Granted (in shares) 89,161  
Stock Options, Exercised (in shares) (89,320)  
Stock Options, Forfeited (in shares) (56,921)  
Stock Options, Outstanding at end of period (in shares) 957,125 1,014,205
Stock Options, Vested or expected to vest (in shares) 957,125  
Stock Option, Exercisable (in shares) 439,362  
Weighted average exercise price    
Weighted average exercise price, Outstanding at beginning of period (usd per share) $ 23.62  
Weighted average exercise price, Granted (usd per share) 70.79  
Weighted average exercise price, Exercised (usd per share) 20.01  
Weighted average exercise price, Forfeited (usd per share) 48.69  
Weighted average exercise price, Outstanding at end of period (usd per share) 26.86 $ 23.62
Weighted average exercise price, Vested or expected to vest (usd per share) 26.86  
Weighted average exercise price, Exercisable (usd per share) $ 20.74  
Weighted average remaining contractual term, Outstanding at end of period (years) 7 years 4 months 24 days  
Weighted average remaining contractual term, Vested or expected to vest (years) 7 years 4 months 24 days  
Weighted average remaining contractual term, Exercisable (years) 7 years  
Aggregate intrinsic value, Outstanding   $ 45,777
Aggregate intrinsic value, Vested or expected to vest   45,777
Aggregate intrinsic value, Exercisable   $ 23,699
v3.19.3.a.u2
Equity-based compensation - Summary of Restricted Stock Units Activity and Performance Share Units Activity (Detail)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
$ / shares
shares
Restricted Stock Units  
Restricted stock units  
Units Outstanding at beginning of period (in shares) | shares 81,796
Units granted (in shares) | shares 40,071
Units vested (in shares) | shares (27,979)
Units forfeited (in shares) | shares (18,810)
Units Outstanding at end of period (in shares) | shares 75,078
Weighted average fair value  
Weighted average grant date fair value, Outstanding at beginning of period (in usd per share) | $ / shares $ 39.82
Weighted average grant date fair value, Units granted (in usd per share) | $ / shares 69.55
Weighted average grant date fair value, Units vested (usd per share) | $ / shares 44.43
Weighted average grant date fair value, Units forfeited (in usd per share) | $ / shares 50.40
Weighted average grant date fair value, Outstanding at end of period (in usd per share) | $ / shares $ 51.32
Weighted average remaining contractual term, Outstanding at end of period (in years) 1 year 9 months 18 days
Aggregate intrinsic value, Outstanding at end of period | $ $ 5,607
Performance Share Units  
Restricted stock units  
Units Outstanding at beginning of period (in shares) | shares 0
Units granted (in shares) | shares 34,575
Units vested (in shares) | shares 0
Units forfeited (in shares) | shares (2,579)
Units Outstanding at end of period (in shares) | shares 31,996
Weighted average fair value  
Weighted average grant date fair value, Outstanding at beginning of period (in usd per share) | $ / shares $ 0
Weighted average grant date fair value, Units granted (in usd per share) | $ / shares 70.67
Weighted average grant date fair value, Units vested (usd per share) | $ / shares 0
Weighted average grant date fair value, Units forfeited (in usd per share) | $ / shares 70.44
Weighted average grant date fair value, Outstanding at end of period (in usd per share) | $ / shares $ 70.69
Weighted average remaining contractual term, Outstanding at end of period (in years) 2 years 3 months 18 days
Aggregate intrinsic value, Outstanding at end of period | $ $ 1,544
v3.19.3.a.u2
Earnings per share - Additional Information (Detail) - shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Stock options      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Anti-dilutive securities excluded from the calculation of earnings per share 57,273 143,006 489,133
Restricted Stock Units      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Anti-dilutive securities excluded from the calculation of earnings per share 755 131 1,829
Holdings Units      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Shares exchanged for Class A common stock 1    
Class B Common Stock      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Shares exchanged for Class A common stock 1    
Class B Common Stock | Equity Unit Purchase Agreements      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Anti-dilutive securities excluded from the calculation of earnings per share 8,739,015 10,275,077 19,483,737
v3.19.3.a.u2
Earnings per share - Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Numerator                      
Net income $ 34,255 $ 29,692 $ 39,827 $ 31,639 $ 28,779 $ 20,472 $ 30,418 $ 23,493 $ 135,413 $ 103,162 $ 55,601
Less: net income attributable to non-controlling interests                 17,718 15,141 22,455
Net income attributable to Planet Fitness, Inc. $ 29,665 $ 25,777 $ 34,844 $ 27,409 $ 24,796 $ 17,471 $ 25,874 $ 19,880 $ 117,695 $ 88,021 $ 33,146
Stock options                      
Effect of dilutive securities:                      
Weighted-average shares outstanding adjustment                 599,425 417,264 56,198
RSUs and PSUs                      
Effect of dilutive securities:                      
Weighted-average shares outstanding adjustment                 43,135 22,618 4,962
Class A Common Stock                      
Denominator                      
Weighted-average shares of Class A common stock outstanding - basic (shares)                 82,976,620 87,235,021 78,910,390
Effect of dilutive securities:                      
Weighted-average shares of Class A common stock outstanding - diluted (shares)                 83,619,180 87,674,903 78,971,550
Earnings per share of Class A common stock - basic (usd per share) $ 0.37 $ 0.31 $ 0.41 $ 0.33 $ 0.29 $ 0.20 $ 0.30 $ 0.23 $ 1.42 $ 1.01 $ 0.42
Earnings per share of Class A common stock - diluted (usd per share) $ 0.36 $ 0.31 $ 0.41 $ 0.32 $ 0.29 $ 0.20 $ 0.29 $ 0.23 $ 1.41 $ 1.00 $ 0.42
v3.19.3.a.u2
Income taxes - Schedule of Income Before Provision for Income Taxes (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
Domestic $ 171,970 $ 128,861 $ 426,873
Foreign 1,207 2,943 2,308
Total income before the provision for income taxes $ 173,177 $ 131,804 $ 429,181
v3.19.3.a.u2
Income taxes - Schedule of Provision (Benefit) for Income Taxes Expenses (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Current:      
Federal $ 7,359 $ 178 $ (2,600)
State 8,280 3,586 2,941
Foreign 500 945 817
Total current tax expense 16,139 4,709 1,158
Deferred:      
Federal 23,289 22,757 365,470
State (1,346) 946 6,857
Foreign (318) 230 95
Total deferred tax expense 21,625 23,933 372,422
Provision for income taxes $ 37,764 $ 28,642 $ 373,580
v3.19.3.a.u2
Income taxes - Additional information (Detail)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2017
USD ($)
Dec. 31, 2019
USD ($)
agreement
shares
Dec. 31, 2018
USD ($)
shares
Dec. 31, 2017
USD ($)
Tax Credit Carryforward [Line Items]        
Tax cuts and jobs act of 2017, change in tax rate, Estimated Additional Income Tax Expense $ 334,619     $ 316,813
Tax cuts and jobs act of 2017, change in tax rate, remeasurement of deferred tax assets and liabilities 334,022      
Tax cuts and jobs act of 2017, change in tax rate, mandatory repatriation $ 597      
Current income tax rate (in percentage)   21.80% 21.70%  
Liability related to uncertain tax positions   $ 420 $ 300  
Liability for unrecognized tax benefits   120    
Income tax examination, settlement   2,625    
Unrecognized tax benefit and related indemnification asset   2,967    
Released provision for income taxes   $ 342    
Number of tax receivable agreements | agreement   2    
Applicable tax savings (in percentage)   85.00%    
Percentage of remaining tax savings (in percentage)   15.00%    
Income tax rate maximum tax liability (in percentage)   3.50%    
Other income (expense) reflecting change in tax benefit obligation   $ (5,966) (4,765) $ 317,353
Deferred tax asset   422,561 419,297  
Deferred tax liability   11,384 6,759  
Tax benefit obligation   427,216 429,233  
Continuing LLC Owners        
Tax Credit Carryforward [Line Items]        
Decrease in deferred tax assets   190 721  
Deferred tax asset   20,362 27,565  
Deferred tax liability   $ 17,016 $ 23,526  
Class A Common Stock | Continuing LLC Owners        
Tax Credit Carryforward [Line Items]        
Number of shares exchanged (in shares) | shares   885,810 1,736,020  
Other expense        
Tax Credit Carryforward [Line Items]        
Expense for indemnification asset   $ 342    
v3.19.3.a.u2
Income taxes - Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Tax Rate (Detail)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
U.S. statutory tax rate (in percentage) 21.00% 21.00% 35.00%
State and local taxes, net of federal benefit (in percentage) 6.20% 5.90% 1.00%
State rate change impact on deferred taxes (in percentage) (4.10%) (3.40%) 0.80%
Federal rate change impact on deferred taxes (in percentage) 0.00% 0.00% 77.80%
Tax benefit arrangement liability adjustment (in percentage) 0.70% 0.80% (25.80%)
Foreign tax rate differential (in percentage) 0.00% 0.20% 0.00%
Withholding taxes and other (in percentage) 0.00% (0.30%) 0.10%
Reserve for uncertain tax position (in percentage) 0.10% (0.20%) 0.10%
Income attributable to non-controlling interests (in percentage) (2.10%) (2.30%) (1.90%)
Effective tax rate (in percentage) 21.80% 21.70% 87.10%
v3.19.3.a.u2
Income taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Deferred tax assets:      
Deferred revenue $ 5,343 $ 4,619  
Goodwill and intangible assets 410,585 409,740  
Other 6,633 4,938  
Deferred tax assets 422,561 419,297  
Deferred tax liabilities:      
Prepaid expenses (1,021) (922)  
Property and equipment (10,363) (5,837)  
Total deferred tax liabilities (11,384) (6,759)  
Total deferred tax assets and liabilities 411,177 412,538  
Reported as:      
Deferred income taxes - non-current assets 412,293 414,841 $ 411,067
Deferred income taxes - non-current liabilities (1,116) (2,303) $ (1,629)
Total deferred tax assets and liabilities $ 411,177 $ 412,538  
v3.19.3.a.u2
Income taxes - Summary Of Changes In Unrecognized Tax Positions (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]    
Balance at beginning of year $ 300 $ 2,608
Increase related to current year tax positions 405 0
Decrease related to prior year tax positions (285) (2,308)
Balance at end of year $ 420 $ 300
v3.19.3.a.u2
Income taxes - Schedule of Future Payments Under Tax Benefit Arrangements (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Income Tax Disclosure [Abstract]    
2020 $ 26,379  
2021 26,633  
2022 27,195  
2023 27,733  
2024 28,372  
Thereafter 290,904  
Total $ 427,216 $ 429,233
v3.19.3.a.u2
Commitments and contingencies - Additional Information (Detail) - USD ($)
May 03, 2019
Dec. 31, 2019
Dec. 31, 2018
Commitment And Contingencies [Line Items]      
Receivables due from related parties     $ 0
Maximum obligation of guarantees of leases and debt   $ 10,309,000 732,000
Accrued potential obligation recorded under guaranty arrangement   0 $ 0
Advertising Purchase Commitment      
Commitment And Contingencies [Line Items]      
Purchase commitments   41,311,000  
Equipment Purchase Commitment      
Commitment And Contingencies [Line Items]      
Purchase commitments   10,434,000  
Pending Litigation | Civil Action Brought By Former Employee      
Commitment And Contingencies [Line Items]      
Damages sought $ 6,300,000    
Estimate of possible loss   1,260,000  
Loss contingency, receivable   1,260,000  
Receivables due from related parties   $ 420,000  
v3.19.3.a.u2
Retirement Plan - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Retirement Benefits [Abstract]      
Percentage of employer matching contribution 100.00%    
Maximum percentage of employee contribution 4.00%    
Total employer matching contributions expense $ 986 $ 832 $ 623
v3.19.3.a.u2
Segments - Additional Information (Detail)
3 Months Ended 12 Months Ended
Dec. 31, 2019
USD ($)
Sep. 30, 2019
USD ($)
Jun. 30, 2019
USD ($)
Mar. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jun. 30, 2018
USD ($)
Mar. 31, 2018
USD ($)
Dec. 31, 2019
USD ($)
segment
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Jan. 01, 2018
USD ($)
Segment Reporting Information [Line Items]                        
Number of reportable segments | segment                 3      
Number of operating segments | segment                 0      
Total revenue $ 191,510,000 $ 166,815,000 $ 181,661,000 $ 148,817,000 $ 174,359,000 $ 136,656,000 $ 140,550,000 $ 121,333,000 $ 688,803,000 $ 572,898,000 $ 429,942,000  
Assets 1,717,190,000       1,353,416,000       1,717,190,000 1,353,416,000   $ 1,095,750,000
Corporate-owned stores                        
Segment Reporting Information [Line Items]                        
Total revenue                 159,697,000 138,599,000 112,114,000  
Corporate-owned stores | International                        
Segment Reporting Information [Line Items]                        
Total revenue                 4,389,000 4,425,000 4,402,000  
Long-lived assets 1,039,000       1,892,000       1,039,000 1,892,000    
Franchise revenue                        
Segment Reporting Information [Line Items]                        
Total revenue                 277,582,000 224,140,000 150,155,000  
Franchise revenue | International                        
Segment Reporting Information [Line Items]                        
Total revenue                 6,207,000 4,634,000 2,368,000  
Franchise revenue | Placement Services                        
Segment Reporting Information [Line Items]                        
Total revenue                 17,755,000 11,502,000 $ 11,371,000  
Intersegment Eliminations                        
Segment Reporting Information [Line Items]                        
Total revenue                 0      
Operating segments | Corporate-owned stores                        
Segment Reporting Information [Line Items]                        
Assets 471,234,000       243,221,000       471,234,000 243,221,000    
Operating segments | Franchise revenue                        
Segment Reporting Information [Line Items]                        
Assets 193,504,000       185,899,000       193,504,000 185,899,000    
Unallocated                        
Segment Reporting Information [Line Items]                        
Assets $ 854,796,000       713,834,000       $ 854,796,000 713,834,000    
Reclassification | Operating segments | Franchise revenue                        
Segment Reporting Information [Line Items]                        
Assets         (133,523,000)         (133,523,000)    
Reclassification | Unallocated                        
Segment Reporting Information [Line Items]                        
Assets         $ 133,523,000         $ 133,523,000    
v3.19.3.a.u2
Segments - Summary of Financial Information for the Company's Reportable Segments (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Segment Reporting Information [Line Items]                      
Total revenue $ 191,510 $ 166,815 $ 181,661 $ 148,817 $ 174,359 $ 136,656 $ 140,550 $ 121,333 $ 688,803 $ 572,898 $ 429,942
Total Segment EBITDA                 271,322 213,129 496,225
Corporate and other                      
Segment Reporting Information [Line Items]                      
Total Segment EBITDA                 (46,190) (43,753) 284,372
Franchise revenue                      
Segment Reporting Information [Line Items]                      
Total revenue                 277,582 224,140 150,155
Franchise revenue | Operating segments                      
Segment Reporting Information [Line Items]                      
Total Segment EBITDA                 192,281 152,571 126,459
Franchise revenue | US                      
Segment Reporting Information [Line Items]                      
Total revenue                 271,375 219,506 147,787
Franchise revenue | International                      
Segment Reporting Information [Line Items]                      
Total revenue                 6,207 4,634 2,368
Corporate-owned stores                      
Segment Reporting Information [Line Items]                      
Total revenue                 159,697 138,599 112,114
Corporate-owned stores | Operating segments                      
Segment Reporting Information [Line Items]                      
Total Segment EBITDA                 65,613 56,704 46,855
Corporate-owned stores | US                      
Segment Reporting Information [Line Items]                      
Total revenue                 155,308 134,174 107,712
Corporate-owned stores | International                      
Segment Reporting Information [Line Items]                      
Total revenue                 4,389 4,425 4,402
Equipment revenue                      
Segment Reporting Information [Line Items]                      
Total revenue                 251,524 210,159 167,673
Equipment revenue | Operating segments                      
Segment Reporting Information [Line Items]                      
Total Segment EBITDA                 59,618 47,607 38,539
Equipment revenue | US                      
Segment Reporting Information [Line Items]                      
Total revenue                 $ 251,524 $ 210,159 $ 167,673
v3.19.3.a.u2
Segments - Reconciliation of Total Segment EBITDA to Income Before Taxes (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Segment Reporting [Abstract]                      
Total Segment EBITDA                 $ 271,322 $ 213,129 $ 496,225
Depreciation and amortization                 44,346 35,260 31,761
Other (expense) income                 (6,107) (6,175) 316,928
Income from operations $ 61,571 $ 53,061 $ 65,266 $ 53,185 $ 52,742 $ 43,573 $ 48,811 $ 38,918 233,083 184,044 147,536
Interest expense, net                 (53,799) (46,065) (35,283)
Other income (expense), net                 (6,107) (6,175) 316,928
Income before income taxes                 $ 173,177 $ 131,804 $ 429,181
v3.19.3.a.u2
Segments - Summary of Company's Assets by Reportable Segment (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Segment Reporting, Asset Reconciling Item [Line Items]      
Total consolidated assets $ 1,717,190 $ 1,353,416 $ 1,095,750
Operating segments | Franchise revenue      
Segment Reporting, Asset Reconciling Item [Line Items]      
Total consolidated assets 193,504 185,899  
Operating segments | Corporate-owned stores      
Segment Reporting, Asset Reconciling Item [Line Items]      
Total consolidated assets 471,234 243,221  
Operating segments | Equipment revenue      
Segment Reporting, Asset Reconciling Item [Line Items]      
Total consolidated assets 197,656 210,462  
Unallocated      
Segment Reporting, Asset Reconciling Item [Line Items]      
Total consolidated assets $ 854,796 $ 713,834  
v3.19.3.a.u2
Segments - Summary of Company's Goodwill by Reportable Segment (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Segment Reporting, Other Significant Reconciling Item [Line Items]        
Total consolidated goodwill $ 227,821 $ 199,513 $ 176,981 $ 176,981
Franchise revenue        
Segment Reporting, Other Significant Reconciling Item [Line Items]        
Total consolidated goodwill 16,938 16,938    
Corporate-owned stores        
Segment Reporting, Other Significant Reconciling Item [Line Items]        
Total consolidated goodwill 118,217 89,909    
Equipment revenue        
Segment Reporting, Other Significant Reconciling Item [Line Items]        
Total consolidated goodwill $ 92,666 $ 92,666   $ 92,666
v3.19.3.a.u2
Corporate-owned and franchisee-owned stores - Schedule of Changes in Corporate-owned and Franchisee-owned Stores (Detail) - store
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Franchisor Disclosure [Line Items]      
Stores operated at beginning of period 1,742 1,518 1,313
New stores opened 261 230 210
Stores debranded, sold or consolidated (2) (6) (5)
Stores operated at end of period 2,001 1,742 1,518
Franchisee-owned stores      
Franchisor Disclosure [Line Items]      
Stores operated at beginning of period 1,666 1,456 1,255
New stores opened 255 226 206
Stores debranded, sold or consolidated (18) (16) (5)
Stores operated at end of period 1,903 1,666 1,456
Corporate-owned stores      
Franchisor Disclosure [Line Items]      
Stores operated at beginning of period 76 62 58
New stores opened 6 4 4
Stores acquired from franchisees 16 10 0
Stores operated at end of period 98 76 62
v3.19.3.a.u2
Quarterly financial data (Unaudited) - Schedule of Quarterly Financial Data (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Quarterly Financial Information [Line Items]                      
Total revenue $ 191,510 $ 166,815 $ 181,661 $ 148,817 $ 174,359 $ 136,656 $ 140,550 $ 121,333 $ 688,803 $ 572,898 $ 429,942
Income from operations 61,571 53,061 65,266 53,185 52,742 43,573 48,811 38,918 233,083 184,044 147,536
Net income 34,255 29,692 39,827 31,639 28,779 20,472 30,418 23,493 135,413 103,162 55,601
Net income (loss) attributable to Planet Fitness, Inc. $ 29,665 $ 25,777 $ 34,844 $ 27,409 $ 24,796 $ 17,471 $ 25,874 $ 19,880 $ 117,695 $ 88,021 $ 33,146
Class A Common Stock                      
Earnings (loss) per share:                      
Class A - Basic (usd per share) $ 0.37 $ 0.31 $ 0.41 $ 0.33 $ 0.29 $ 0.20 $ 0.30 $ 0.23 $ 1.42 $ 1.01 $ 0.42
Class A - Diluted (usd per share) $ 0.36 $ 0.31 $ 0.41 $ 0.32 $ 0.29 $ 0.20 $ 0.29 $ 0.23 $ 1.41 $ 1.00 $ 0.42
v3.19.3.a.u2
Valuation and Qualifying Accounts (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Balance at Beginning of Period $ 84 $ 32 $ 687
Provision for (recovery of) doubtful accounts, net 87 19 (19)
Write-offs and other (60) 33 (636)
Balance at End of Period $ 111 $ 84 $ 32