More Problems at Planet Fitness (PLNT)
Two weeks ago, The Bear Cave published on problems at Planet Fitness (NYSE: PLNT — $7.51 billion), the leading franchisor of low-cost gyms in the United States. The Bear Cave highlighted numerous consumer complaints against Planet Fitness and wrote, in part,
“The complaints allege a pattern of misconduct including 1) customers sending multiple cancellation letters that are ignored, 2) cancellation attempts in person that are ignored 3) billing being resumed post-cancelation 4) spurious fees, and 5) Planet Fitness preventing customers from canceling because they owe a back balance… After reviewing the evidence, The Bear Cave is left wondering whether Planet Fitness is actually a thriving gym franchise or an illegal billing operation with gyms on the side.”
New documents obtained by The Bear Cave suggest the company’s issues are deeper and more widespread. For example, Planet Fitness has received at least 16 inquiries from the Illinois Attorney General’s Office, and one of the company’s largest franchisees, Black Duck Partners, has been repeatedly accused of reactivating canceled memberships. The Bear Cave believes the Planet Fitness franchise base is less healthy than the market thinks, and potentially propped up by a financing entity with undisclosed ties to Planet Fitness’s co-founder.
One recent consumer complaint against Planet Fitness reads, in part,
“The complaint is in regards to the continuation of monthly fees withdrawn from my bank account after I canceled my Planet Fitness membership subscription in person April 2022. The $10 monthly fee was withdrawn from my account in May, June, July. There was an attempt for August, but I arranged for my bank to stop withdrawals…”
According to the documents obtained by The Bear Cave, Jonah Harlan, a Citizen’s Advocate within the Consumer Protection Division of the Illinois Attorney General’s Office, forwarded the complaint to Planet Fitness and requested a response.
That response came from Cory Kilsdonk, the Chief Operating Officer for Black Duck Partners, “one of the largest franchisees for Planet Fitness [with] over 120 clubs.” The response begins “Hey Jonah” and argues that because the membership was canceled on April 12th, a charge on April 17th was valid because the company requires seven days to process cancellations. In addition, it appears that Planet Fitness alleged charges thereafter were for a related account that wasn’t canceled. The response concludes,
“If he would like to rejoin, we will give him 3 months free to make up for the charges that he thought were charged incorrectly.”
Similar concerns abound. A 2021 complaint to the Illinois Attorney General reads, in part,
“I have tried numerous times to cancel my membership according to their cancellation rules but have been denied… they refuse to cancel which is forcing me to… continue to pay every month until I pay [the] back balance. I just want this membership canceled.”
The 2021 complaint to the Illinois Attorney General includes the cancellation letter, signed membership agreement, and a copy of the certified cancellation letter, which is reproduced below:
That complaint was forwarded by Heather Calcera, another Citizen’s Advocate within the Consumer Protection Division of the Illinois Attorney General’s Office, to Black Duck Partners, which operated that Planet Fitness franchise. The response from Black Duck Partners reads, in part,
“The club requires written notification by the 10th of the month delivered to the club in person or postmarked via certified mail… It looks like the membership is cancelled with a balance of $94 and the balance will remain until it is taken care of. Due to the situation, we cannot issue a refund because it was not canceled in accordance with the agreement, thank you!”
The response does not include an explanation of why the gym membership “was not canceled in accordance with the agreement.”