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FITNESS, HEALTH, WELLNESS

Latest news

Planet Fitness board ousts CEO Chris Rondeau

Chris Rondeau has been removed from his role as CEO of Planet Fitness by its board of directors
Current board member Craig Benson will act as CEO while an executive search team seeks a new CEO
The board is thought likely to have fallen out with Rondeau over growth plans
The company has been posting strong results under Rondeau and shares fell 16 per cent on the news

The board of Planet Fitness has ousted Chris Rondeau from his role as CEO, effective immediately, replacing him with Craig Benson, a member of the board and business heavyweight.

Board chair Stephen Spinelli said: “As we enter the next chapter of Planet Fitness’s journey, the board felt now was the right time to transition leadership.”

Spinelli said Rondeau will be obliged under his existing agreement with the company to serve in an advisory role to “ensure a smooth transition”.

An executive search firm has been appointed to find a new permanent CEO.

Rondeau will remain on the board, but will be “nominated for re-election at the next AGM”, said Spinelli.

As part of his severance package, Rondeau will be awarded a bonus of around US$800,000 and will continue to receive his basic salary of US$950,000 for two years while he’s restrained by a non-compete agreement. He’s also been bound by confidentiality clauses.

In relation to the choice of Benson to replace Rondeau, Spinelli said: “As a Board member and Planet Fitness franchisee, Craig Benson knows our business well, while also bringing deep public and private sector executive leadership experience to this role. The board is confident he is the ideal leader to oversee the business during this transition period.”

No statement has yet been made about whether Benson will relinquish any of his other current roles (see bio below) to run Planet Fitness, or the extent of his renumeration package.

The suddenness of the announcement indicates Rondeau and the board have not been getting along, but no details have yet emerged about the nature of any disagreements, although they’re likely to revolve around growth.

The board is thought to favour international expansion, while Rondeau told HCM in a late 2021 interview that although the company is “looking to build up in [the countries where is already trades] and maybe go to Asia,” that “with the US potential as big as it is, we don’t want to get distracted and take our eye off the ball here.

"The US will continue to be our main focus…there are still 200 million people in the US who are of age to join a gym but haven’t yet done so,” he said.

As with many franchise operators, the company has also been starting to feel the impact of higher construction costs and interest rates which have made it more challenging for franchisees to sign up.

Planet Fitness CFO, Tom Fitzgerald told analysts last month that “Initially franchisees didn’t see increases in interest rates as a significant dampener on their new store plans, however, they’re more recently feeling the lag effect of higher debt service.”

However, these forces are coming to bear on the majority of businesses and Planet Fitness has been posting strong financials in spite of the current market conditions.

Given Rondeau’s successes, the move by the Planet Fitness board leaves industry insiders wondering what it takes to satisfy the greed of the financial markets.

The company’s shares tumbled by 16 per cent on the news of Rondeau’s departure, with further falls expected, as he was regarded by the money markets as a strong operator.

In a bid to calm these jitters, the board has issued a statement saying “The management change is not the result of any material or unexpected financial events,” while Spinelli also confirmed that no changes are planned in relation to the current business strategy, saying: “The Board remains committed to overseeing the execution of the Company's strategy as we begin our search for Planet Fitness’s next permanent leader." 

There’s no doubt Rondeau’s departure will herald a disrupted time for the business and a hint of this comes in the statutory ‘forward looking’ statement that accompanied the announcement of his departure.

As a public company, Planet Fitness is obliged to highlight all ‘forward looking statements’ it makes and in relation to the announcement about Rondeau’s departure it said: “Actual [financial] results may differ materially from those indicated in our forward-looking statements.

"Important factors that could cause our actual results to differ materially include:

1. Our ability to transition to a new interim CEO and

2. Our ability to successfully identify and engage a permanent CEO.”

These statements indicate the degree of risk involved in the removal of Rondeau.

The contrast between the two men could not be more marked, with Rondeau having worked his way up from the gym floor to CEO and Benson having an MBA and extensive business experience at CEO level, as well as having been governor of New Hampshire.

Their approaches are also likely to be very different. Rondeau is a committed and passionate advocate of the sector and its role in health promotion, while Benson is a long-time Dunkin’ Donuts franchisee with 147 doughnut franchise locations, indicating his views on wellness are somewhat different.

In addition, Benson – although having worked on a start-up earlier in his career, essentially comes from big business, while Rondeau has always remained close to the gym floor, the franchisees and the members, something which has enabled him to empathise deeply with the 90 per cent of Planet Fitness franchisees who are independent.

Commenting on the change to his role, Rondeau’s official statement reads: "My 30-year career at Planet Fitness has been an incredible ride and it's been an honour to lead this company and serve our employees, franchisees and members, all of whom have played a key role in our tremendous growth and success.

“I’m grateful for and look forward to supporting the management team in an advisory capacity and have confidence in the long-term potential of Planet Fitness,” he concluded.

Spinelli recognised Rondeau’s extraordinary contribution, saying, "On behalf of the Board, I'd like to thank Chris for his 30 years of service to Planet Fitness. During the course of his decade-long tenure as CEO, Chris has played a critical role in accelerating our differentiated high-value, low-price model to significantly grow our membership by over five and a half times to 18.4 million and our footprint by four times to more than 2,400 stores, while cultivating our culture of judgement free fitness to improve the lives of millions of members."

Speaking to HCM earlier this year, Rondeau told the story of his journey from being one of the founders of the company and its concept to working his way up to being CEO, saying: “I started at the front desk of the gym and worked my way up through the ranks. It has felt like a 30-year college degree and I’m still learning now”.

This journey gave him deep insight into the business as he explained, saying: “Around 2016, a year or two after the IPO …I was meeting with well educated, super-smart people – all the investors and analysts who ask good – and tough – questions and I realised there wasn’t a question I couldn’t answer off the tip of my tongue.

"No matter how smart and well educated they were, no one knew the business better than I did,” he said.

More about Craig Benson

Benson has served on the Planet Fitness board since July 2017. He’s currently also CEO at Soft Draw Investments and has been a Dunkin’ Donuts franchisee for 15 years, holding 147 stores.

Benson previously served as the 79th Governor of the State of New Hampshire. During his tenure, the Cato Institute recognised him as "the second most effective of all governors nationwide”.

In 1983, he co-founded Cabletron Systems, a provider of networking solutions and during his 17-year tenure, he served as chair, CEO, COO and president, helping take the company from a ‘garage start-up’ to a publicly traded company with 7,000 employees and annual sales of US$1.6 billion.

In addition to Planet Fitness, he also serves as the vice chair of the Trustees of Babson College and previously served as a director of Sycamore Networks (October 2007 to April 2013).

Benson graduated from Babson College with a degree in Finance and completed an MBA in operations management from Syracuse University. He holds honorary degrees from Dartmouth College, Thomas Jefferson University, the University of New Hampshire and Grand Valley State University.

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Latest news

Planet Fitness board ousts CEO Chris Rondeau

Chris Rondeau has been removed from his role as CEO of Planet Fitness by its board of directors
Current board member Craig Benson will act as CEO while an executive search team seeks a new CEO
The board is thought likely to have fallen out with Rondeau over growth plans
The company has been posting strong results under Rondeau and shares fell 16 per cent on the news

The board of Planet Fitness has ousted Chris Rondeau from his role as CEO, effective immediately, replacing him with Craig Benson, a member of the board and business heavyweight.

Board chair Stephen Spinelli said: “As we enter the next chapter of Planet Fitness’s journey, the board felt now was the right time to transition leadership.”

Spinelli said Rondeau will be obliged under his existing agreement with the company to serve in an advisory role to “ensure a smooth transition”.

An executive search firm has been appointed to find a new permanent CEO.

Rondeau will remain on the board, but will be “nominated for re-election at the next AGM”, said Spinelli.

As part of his severance package, Rondeau will be awarded a bonus of around US$800,000 and will continue to receive his basic salary of US$950,000 for two years while he’s restrained by a non-compete agreement. He’s also been bound by confidentiality clauses.

In relation to the choice of Benson to replace Rondeau, Spinelli said: “As a Board member and Planet Fitness franchisee, Craig Benson knows our business well, while also bringing deep public and private sector executive leadership experience to this role. The board is confident he is the ideal leader to oversee the business during this transition period.”

No statement has yet been made about whether Benson will relinquish any of his other current roles (see bio below) to run Planet Fitness, or the extent of his renumeration package.

The suddenness of the announcement indicates Rondeau and the board have not been getting along, but no details have yet emerged about the nature of any disagreements, although they’re likely to revolve around growth.

The board is thought to favour international expansion, while Rondeau told HCM in a late 2021 interview that although the company is “looking to build up in [the countries where is already trades] and maybe go to Asia,” that “with the US potential as big as it is, we don’t want to get distracted and take our eye off the ball here.

"The US will continue to be our main focus…there are still 200 million people in the US who are of age to join a gym but haven’t yet done so,” he said.

As with many franchise operators, the company has also been starting to feel the impact of higher construction costs and interest rates which have made it more challenging for franchisees to sign up.

Planet Fitness CFO, Tom Fitzgerald told analysts last month that “Initially franchisees didn’t see increases in interest rates as a significant dampener on their new store plans, however, they’re more recently feeling the lag effect of higher debt service.”

However, these forces are coming to bear on the majority of businesses and Planet Fitness has been posting strong financials in spite of the current market conditions.

Given Rondeau’s successes, the move by the Planet Fitness board leaves industry insiders wondering what it takes to satisfy the greed of the financial markets.

The company’s shares tumbled by 16 per cent on the news of Rondeau’s departure, with further falls expected, as he was regarded by the money markets as a strong operator.

In a bid to calm these jitters, the board has issued a statement saying “The management change is not the result of any material or unexpected financial events,” while Spinelli also confirmed that no changes are planned in relation to the current business strategy, saying: “The Board remains committed to overseeing the execution of the Company's strategy as we begin our search for Planet Fitness’s next permanent leader." 

There’s no doubt Rondeau’s departure will herald a disrupted time for the business and a hint of this comes in the statutory ‘forward looking’ statement that accompanied the announcement of his departure.

As a public company, Planet Fitness is obliged to highlight all ‘forward looking statements’ it makes and in relation to the announcement about Rondeau’s departure it said: “Actual [financial] results may differ materially from those indicated in our forward-looking statements.

"Important factors that could cause our actual results to differ materially include:

1. Our ability to transition to a new interim CEO and

2. Our ability to successfully identify and engage a permanent CEO.”

These statements indicate the degree of risk involved in the removal of Rondeau.

The contrast between the two men could not be more marked, with Rondeau having worked his way up from the gym floor to CEO and Benson having an MBA and extensive business experience at CEO level, as well as having been governor of New Hampshire.

Their approaches are also likely to be very different. Rondeau is a committed and passionate advocate of the sector and its role in health promotion, while Benson is a long-time Dunkin’ Donuts franchisee with 147 doughnut franchise locations, indicating his views on wellness are somewhat different.

In addition, Benson – although having worked on a start-up earlier in his career, essentially comes from big business, while Rondeau has always remained close to the gym floor, the franchisees and the members, something which has enabled him to empathise deeply with the 90 per cent of Planet Fitness franchisees who are independent.

Commenting on the change to his role, Rondeau’s official statement reads: "My 30-year career at Planet Fitness has been an incredible ride and it's been an honour to lead this company and serve our employees, franchisees and members, all of whom have played a key role in our tremendous growth and success.

“I’m grateful for and look forward to supporting the management team in an advisory capacity and have confidence in the long-term potential of Planet Fitness,” he concluded.

Spinelli recognised Rondeau’s extraordinary contribution, saying, "On behalf of the Board, I'd like to thank Chris for his 30 years of service to Planet Fitness. During the course of his decade-long tenure as CEO, Chris has played a critical role in accelerating our differentiated high-value, low-price model to significantly grow our membership by over five and a half times to 18.4 million and our footprint by four times to more than 2,400 stores, while cultivating our culture of judgement free fitness to improve the lives of millions of members."

Speaking to HCM earlier this year, Rondeau told the story of his journey from being one of the founders of the company and its concept to working his way up to being CEO, saying: “I started at the front desk of the gym and worked my way up through the ranks. It has felt like a 30-year college degree and I’m still learning now”.

This journey gave him deep insight into the business as he explained, saying: “Around 2016, a year or two after the IPO …I was meeting with well educated, super-smart people – all the investors and analysts who ask good – and tough – questions and I realised there wasn’t a question I couldn’t answer off the tip of my tongue.

"No matter how smart and well educated they were, no one knew the business better than I did,” he said.

More about Craig Benson

Benson has served on the Planet Fitness board since July 2017. He’s currently also CEO at Soft Draw Investments and has been a Dunkin’ Donuts franchisee for 15 years, holding 147 stores.

Benson previously served as the 79th Governor of the State of New Hampshire. During his tenure, the Cato Institute recognised him as "the second most effective of all governors nationwide”.

In 1983, he co-founded Cabletron Systems, a provider of networking solutions and during his 17-year tenure, he served as chair, CEO, COO and president, helping take the company from a ‘garage start-up’ to a publicly traded company with 7,000 employees and annual sales of US$1.6 billion.

In addition to Planet Fitness, he also serves as the vice chair of the Trustees of Babson College and previously served as a director of Sycamore Networks (October 2007 to April 2013).

Benson graduated from Babson College with a degree in Finance and completed an MBA in operations management from Syracuse University. He holds honorary degrees from Dartmouth College, Thomas Jefferson University, the University of New Hampshire and Grand Valley State University.

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The board of Planet Fitness has ousted Chris Rondeau from his role as CEO, effective immediately, replacing him with Craig Benson, a member of the board and business heavyweight.
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Diary dates
19-19 Sep 2024
The Salil Hotel Riverside - Bangkok, Bangkok 10120, Thailand
Diary dates
20-22 Sep 2024
Locations worldwide,
Diary dates
01-04 Oct 2024
REVĪVŌ Wellness Resort Nusa Dua Bali, Kabupaten Badung, Indonesia
Diary dates
09-13 Oct 2024
Soneva Fushi, Maldives
Diary dates
10 Oct 2024
QEII Conference Centre, London,
Diary dates
22-25 Oct 2024
Messe Stuttgart, Germany
Diary dates
24-24 Oct 2024
QEII Conference Centre, London, United Kingdom
Diary dates
04-07 Nov 2024
In person, St Andrews, United Kingdom
Diary dates
04-06 Feb 2025
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
11-13 Feb 2025
Fairmont Riyadh , Saudi Arabia
Diary dates
10-13 Apr 2025
Exhibition Centre , Cologne, Germany
Diary dates
07-07 Jun 2025
Worldwide, Various,
Diary dates
28-31 Oct 2025
Koelnmesse, Cologne, Germany
Diary dates
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