Planet Fitness FDD Item 17 is the section of the Franchise Disclosure Document that governs how the franchise relationship begins, continues, and ends. It covers the initial 10-year franchise term, the conditions for renewal, the grounds on which Planet Fitness can terminate the franchise agreement, and the restrictions on transferring (selling) the franchise to a third party. For anyone investing $1.6 million to $4.9 million in a Planet Fitness franchise, Item 17 is effectively the section that determines your exit options. At Lopes Law LLC, we tell every prospective franchisee the same thing: you must understand how you get out before you decide to get in.

This guide breaks down exactly what Planet Fitness discloses in Item 17, explains why the renewal, termination, and transfer provisions have significant financial implications, and identifies the specific clauses every buyer needs to understand before signing.

What Is FDD Item 17 and Why Does It Control Your Exit?

Item 17 of any Franchise Disclosure Document is titled “Renewal, Termination, Transfer, and Dispute Resolution.” It is required by the FTC Franchise Rule (16 C.F.R. Part 436) and presents a summary table of the key relationship terms. This table covers approximately 23 specific provisions, from the length of the franchise term to the conditions under which the franchisor can terminate the agreement to the restrictions on selling the franchise.

For Planet Fitness specifically, Item 17 matters because the franchise involves substantial capital and a long-term commitment. You are investing potentially millions of dollars in equipment, build-out, and working capital. The franchise term is 10 years. During those 10 years, your ability to renew, your vulnerability to termination, and your freedom to sell are all governed by the terms disclosed in Item 17. These terms are not negotiable in most cases, which means you need to fully understand them before you sign.

The consequences of not understanding Item 17 can be severe. A franchisee who discovers at year eight that the renewal conditions require a $500,000 facility upgrade, or that the transfer restrictions make it difficult to sell at a fair price, faces a financial reality that could have been identified and planned for at the outset.

How Long Is the Planet Fitness Franchise Term?

The Planet Fitness franchise agreement has a 10-year initial term. This is the period during which you have the right to operate a Planet Fitness club under the franchise agreement, subject to compliance with all franchise obligations including the 7% royalty, 7% advertising contribution, equipment requirements, brand standards, and operational compliance.

A 10-year term is standard in the fitness franchise industry. However, the financial implications of a 10-year commitment are significant. You are committing to 10 years of fee payments (14% of gross sales in royalties and advertising alone), 10 years of equipment maintenance and replacement obligations, and 10 years of compliance with brand standards that may change during the term. Your total fee obligations over a 10-year term, at a $2 million annual revenue level, could exceed $2.8 million in royalties and advertising alone.

What Are the Renewal Conditions for a Planet Fitness Franchise?

Renewal is not automatic. Planet Fitness includes specific conditions that must be met for the franchisee to renew the franchise agreement at the end of the initial 10-year term. These conditions typically include:

• No existing defaults: The franchisee must be in full compliance with the franchise agreement at the time of renewal. Any unresolved defaults, even minor ones, can be used as grounds to deny renewal.
• Advance notice: The franchisee must provide written notice of intent to renew within the timeframe specified in the agreement, which is typically 6 to 12 months before the term expires.
• Renewal fee: A renewal fee is payable upon renewal, which is separate from and in addition to ongoing royalties.
• Execution of then-current agreement: The franchisee must sign the franchise agreement that Planet Fitness is currently offering to new franchisees. This is critically important because the new agreement may contain different terms, including higher fees, different territory provisions, additional operational requirements, or modified transfer restrictions.
• Facility upgrades: Planet Fitness may require the franchisee to complete facility upgrades, equipment replacement, or remodels as a condition of renewal. These capital expenditures can range from $200,000 to $1 million or more depending on the scope.
• Training completion: The franchisee and key personnel may be required to complete updated training programs.

What Can Cause Planet Fitness to Terminate the Franchise Agreement?

Planet Fitness retains the right to terminate the franchise agreement for a wide range of defaults. The termination provisions in Item 17 typically include both “curable” defaults (where the franchisee receives notice and an opportunity to fix the problem) and “incurable” defaults (where termination can be immediate). Common termination triggers include:

Defaults That May Allow Immediate Termination

• Bankruptcy, insolvency, or assignment for the benefit of creditors
• Unauthorized transfer of the franchise or franchise agreement
• Conviction of a felony or crime involving moral turpitude
• Abandonment of the franchise (typically defined as failure to operate for a specified number of consecutive days without authorization)
• Material misrepresentation in the franchise application
• Unauthorized use of the Planet Fitness marks or proprietary systems
• Repeated defaults, even if each individual default is cured within the cure period

Defaults That Typically Allow a Cure Period

• Failure to pay royalties, advertising fees, or other amounts owed (typically 10 to 30 days to cure)
• Failure to maintain brand standards or operational requirements
• Failure to maintain required insurance coverage
• Failure to comply with equipment upgrade or remodel mandates
• Failure to submit required reports or financial statements

The “repeated defaults” provision deserves special attention. Even if a franchisee cures every individual default within the cure period, the accumulation of defaults over a 12-month period can constitute grounds for termination without a further cure opportunity. This means a franchisee who is consistently late on royalty payments, even by a few days, can accumulate a pattern of defaults that triggers termination rights for the franchisor.

The consequences of termination are severe. You lose the right to operate as a Planet Fitness, you lose the use of the brand name and all proprietary systems, and you may face post-termination non-compete obligations that prevent you from operating a competing fitness business in the same area. Your $1.6 million to $4.9 million investment is effectively lost. This is why data on franchise failures is so relevant: Patrice & Associates found a 31% failure rate across franchise systems, and Dickey’s Barbecue Pit’s 27 SBA loan defaults illustrate how quickly financial distress can escalate to termination when operating margins are tight.

If you are currently operating a Planet Fitness franchise and facing compliance issues or potential default, a franchise exit audit can help you understand your legal position and options before the situation escalates.

What Restrictions Apply to Selling a Planet Fitness Franchise?

Item 17 discloses the transfer restrictions that govern your ability to sell the franchise to a third party. Planet Fitness, like most franchise systems, retains significant control over the transfer process. Key transfer restrictions typically include:

Transfer Requirement	Detail
Franchisor Approval	Planet Fitness must approve the buyer; approval is at the franchisor’s discretion based on current qualification criteria
Buyer Qualifications	The buyer must meet Planet Fitness’s then-current financial, operational, and background requirements
Training Requirement	The buyer must complete Planet Fitness’s training program
Transfer Fee	A transfer fee is payable to Planet Fitness upon completion of the transfer
Current Agreement	The buyer typically must sign the then-current franchise agreement
Right of First Refusal	Planet Fitness may have the right to match any third-party offer and acquire the franchise itself
Facility Upgrades	Planet Fitness may require facility upgrades or remodels as a condition of transfer approval
No Existing Defaults	All defaults must be cured and all obligations current before transfer can be approved

The Right of First Refusal: How It Affects Your Sale

If Planet Fitness retains a right of first refusal, the company can match any bona fide offer you receive from a third-party buyer and acquire the franchise on the same terms. This creates several practical challenges when you try to sell:

First, it introduces uncertainty into the sales process. A prospective buyer who knows that Planet Fitness can swoop in and match the offer may be less willing to invest time and money in due diligence, financing, and negotiation. Why spend $20,000 to $50,000 on attorneys, accountants, and lender fees if the franchisor can take the deal at the last minute?

Second, it can suppress sale prices. If buyers factor in the risk of franchisor intervention, they may offer less for the franchise than they would in a transaction without a right of first refusal. The franchisee effectively subsidizes the franchisor’s option to acquire the location at market price without competing in an open bidding process.

Third, the right of first refusal process adds time to the transaction. The franchisor typically has 30 to 60 days to decide whether to exercise the right, during which the transaction is on hold. This delay can cause financing commitments to expire, buyer interest to wane, or market conditions to shift.

What Post-Termination Obligations Apply to Planet Fitness Franchisees?

When the franchise relationship ends, whether through termination, non-renewal, or expiration, Item 17 discloses the post-termination obligations that the franchisee must comply with. These typically include:

• De-identification: The franchisee must remove all Planet Fitness branding, signage, and trade dress from the location within a specified timeframe.
• Non-compete: The franchisee may be restricted from operating a competing fitness business within a defined geographic area for a specified period, typically 1 to 2 years.
• Confidentiality: The franchisee must continue to maintain the confidentiality of Planet Fitness’s proprietary information and systems.
• Return of materials: All proprietary materials, software, operations manuals, and member data must be returned to Planet Fitness.
• Payment of outstanding obligations: All fees, royalties, and other amounts owed through the termination date must be paid.

The non-compete provision is particularly significant. If your franchise is terminated or not renewed, and you are prohibited from operating a gym in the same area for two years, your investment in the location, equipment, and local market knowledge may have limited residual value. You cannot simply rebrand and continue operating the same business in the same space.

What Should Prospective Planet Fitness Franchisees Focus on in Item 17?

When reviewing Planet Fitness FDD Item 17 with your franchise attorney, focus on these specific areas:

• Renewal terms vs. current terms: Understand that the franchise agreement you sign today may be replaced by a different agreement at renewal. Ask what the current franchise agreement offered to new franchisees looks like and how it differs from older agreements.
• Facility upgrade requirements at renewal: Determine whether Planet Fitness conditions renewal on facility upgrades and, if so, what the estimated cost range is. Build this capital expenditure into your 10-year financial model.
• Termination triggers: Identify every event that can trigger termination, both immediate and with cure periods. Pay particular attention to the “repeated defaults” provision.
• Transfer restrictions and timeline: Model the transfer process from start to finish. Understand how long it takes, what it costs, and what conditions must be met.
• Right of first refusal: If present, evaluate the practical impact on your ability to sell the franchise at a fair price within a reasonable timeframe.
• Post-termination non-compete: Determine the geographic scope and duration of the non-compete. Evaluate whether the restriction would prevent you from recovering value from your location and equipment investment if the franchise relationship ends.

Why Legal Review of Item 17 Is Essential for a Multi-Million Dollar Investment

The provisions disclosed in Planet Fitness Item 17 control the most important decision points in the franchise relationship: whether you can continue operating, whether you can sell, and what happens when the relationship ends. For an investment of $1.6 million to $4.9 million over a 10-year term, these provisions determine whether you realize a return on your capital or lose it.

A franchise attorney can help you evaluate the renewal conditions and model the financial impact of facility upgrades, identify termination triggers and develop compliance strategies to avoid them, analyze transfer restrictions and assess the practical impact on your exit timeline and sale price, negotiate any terms that may be flexible, and compare the Item 17 provisions to other fitness franchise systems.

At Lopes Law LLC, we review Planet Fitness FDDs and franchise agreements regularly. Our flat-fee FDD validation review is $3,000 and covers all 23 items of the FDD, with particular attention to the relationship provisions in Item 17, the fee structure in Item 6, and the financial performance data in Item 19.

Frequently Asked Questions About Planet Fitness FDD Item 17

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Last updated: March 11, 2026