All right. Well, let's just get started. You guys can adjust because we're not on video this year.
Good morning, guys. Thanks for making it here. We are kicking off the first set panel for the day. We have Chris and Tom from Planet Fitness. Thanks for joining everyone, everybody, and I'll just get it started. I mean, like, first things first, like, I wanted to check, like, what are you seeing out there in terms of the consumer mood and health? Anything, like, insights in terms of like even qualitatively, like new member joins, rejoins or anything you're seeing in terms of how new stores are ramping or anything from your data analytics team you can share, like, which would be a good, like, start for it. Yeah.
Sure. I'll start off, Tom, and you can share as well.
Sure.
Yeah, we saw a great first fourth quarter. Happened to be the largest fourth quarter member growth we've ever had, honestly, and that was of a great sign coming into the first quarter, which as I've talked about in the past, first quarter accounts for about 60% of our net joins for the year. First quarter is extremely important to us. Also if you think about with Omicron and the virus and all the stuff that's gone on over the last few years, this is really the first quarter in four years uninterrupted. It's exciting times for us finally. That's great to see. You know, workouts are doing great, right? We're doing the people that are working out are working out slightly more than they did in the past.
Our cancellation rate is slightly better. Even with the recessionary talks and layoffs you see, we actually have cancellations slightly better. All generations are growing penetration-wise throughout the country. Boomers are at about 3% and going up. Gen X is at 6% and growing, and millennials are at 9%. 9% of every millennial in the country is a member today, and the Gen Z population of the ones that are over 15 that are already able to join, we already have 9% penetration of them. You see every newer generation has a higher propensity to join. Lot of great trends there.
Chris, it's interesting that you say the first quarter is normally 60% of new gym joins, yet the fourth quarter was your strongest fourth quarter ever. There was at least some chatter that the fourth quarter may have seen some pull forward of member growth that maybe possibly came out of the first.
Mm-hmm.
Is, is that, is that a phenomenon that could have happened, or do we get back in the first quarter 2023, where it again represents 60% of net member growth for the year?
Sure. It's funny, Joe, we've debated that quite a bit over the years. Is there a way or if you have a strong quotient, do you ever really pull forward? We've really never seen any proof that that actually happens, that you actually can pull a join forward. We believe that when you're ready to join, you're ready to join. You just gotta have the promo out there to get you off the couch. You're not necessarily gonna get off the couch earlier than you were maybe gonna do on your own.
Like, people ask, like, how gym memberships perform during recession. I know, like, back in 2008 and 2009, you had a very strong performance on same-store sales, but during that period, the ramp in new units was a big driver of the cons. Especially today, people like, look at their list of subscriptions and be like, "We're canceling, which they're not using." One of the stat I think you guys had back then is like 50 members don't use the gym in a 30-day period. I think the most recently it's 25% in a three-month period. Why isn't this a risk if times get tighter?
Yeah, historically, it's been like that for decades, since the 1990s. It's always been that same ratio of users. Every month, it's almost a different subset of people that are using it differently than they were the previous month. We've never really seen that affect cancellation rate. Even through COVID, honestly, you'd think maybe that the Black Cards would have canceled faster. Actually, the $10 a months, believe it or not, were actually canceling slightly faster than the Black Cards. You're right, if we go back to 2008, 2009, we had some great same-store sales. Anecdotally, I think we had a lot of people trading down from the higher priced gyms, people that decided that, "You know, I never use the pool.
I don't need the towels. I'll bring my own. I'll drop that membership at $50 a month or more. I'll join Planet for $10. We've had some great times in those periods.
I think, Raul, just to clarify one thing you said, in the last 3 months, you said 25%. That's a different stat.
Okay.
What we were saying on the last earnings call was, with all the new brands that we've brought to our PF Perks, which is pretty much available to all members, there's a little bit of differentiation for some Black Card members. 25% of the people who have not used a gym, a PF, in the last 3 months, took advantage of these perks and savings. That's part of what we're trying to do, where even if because we really cater to casual first-time gym goers. This is not the center point of their day or their week, to your point about the frequency and what Chris was saying. If we can make the membership even more valuable when they're not using our store, we think that's a win.
We're we have a in the last couple of years, we spooled up a small digital team to really focus on driving that. We're starting to see some of those efforts pay off.
It's interesting, 'cause I mean, I've quoted that for years, that, you know, 50% of members don't use in a given, in a given month, but you're probably, it's obviously much lower than that in a given year. Have you ever updated that 3 months? I heard that, too. I was like, "Wow, it's interesting. I didn't know that." Have you ever updated that 3-month usage stat? Is that something that you share publicly?
Yes and no.
Okay.
Yes, we've updated it, and no, we don't share it publicly.
Yeah. Thank you for that. It is interesting. In the age of subscriptions, people have many more subscriptions than they've had before, but a lot of them are app-based, and you can literally swipe on, swipe off, whatever, you know, so it's very easy, you know, to cancel. Just through the nature of your membership and how people sign up, you can sign up on the app, but you can't cancel on the app. I mean, do you think that gives you maybe a stickiness that other subscriptions don't going forward? Or would you ever, for example, have app cancellation?
Yeah.
I mean, is that something that customers are maybe?
Yeah, that's a great question. We have about seven or eight states now that require online cancellations. Corporately, we actually turn all our clubs on to digital, to online cancellations, even in states that don't require it. More as a test in, for corporate to see if there's a higher attrition. We saw a slight uptick in attrition for the first month or two, and then after that level set back to normal, which is a great sign.
Interesting. Yeah.
You know, even today, we have one of the easiest cancellations policies in the country. Basically, 7-day notice. You come to the club, you cancel on the 10th, you're done. Our billing days is 17th.
Yeah.
Most of the our competitors have, like, a 45 or 30-day cancellation policy. You hear me talk about recently that about 30%-35% of our joins are rejoins coming back to us.
Yeah.
We're not burning the bridge. We really believe, especially 'cause of casual first-timers, to Tom's point earlier, our members will already ask you, "How do I cancel?" Before they even join, right? I've never done this before. Almost 40% of our joins have never belonged to a gym in their entire life. They're already saying, "Okay, I don't wanna be locked into this if I'm not gonna make it." Back to your question, it's great we're seeing no uptick in attrition with online cancellations.
Yes. Yeah, definitely.
We'll probably see us mandate this nationwide before it's actually even a law nationwide, just to make the customer's experience that much better and then drive more rejoins in the future.
Are you alluded to, you don't normally use the word churn, but that was a big word as part of your IPO many, many, many years ago, as people were looking at other subscription-based models, as if they were, I guess, more unique than they were now or more rare than they were now. How are you measuring your current last 12-month churn on a pre-COVID basis? I think you used to talk about 2% - 2.5% a month after the first year. Like, where are we in that range, or is there a new range?
Yeah. Still say about 2.5% a month. After a member's been a member for a year, we feel like we've turned them into a for-lifer. After that 12 months, it's about 2.5%-3% a month.
Okay.
Yep. The Black Card and White Card is virtually the same.
Okay.
All right. I mean, I think, like, lending concern for, like, some of the small businesses or franchise businesses is elevated following some of the developments we have seen this past week. Tom, like, any thoughts there? Like, I know it's early, but have you had any conversations with any of your franchisees or, like, anything you can share there?
Yeah, sure. We meet once a year with our larger franchisees, the largest 20 or so, we did that earlier this year. Sorry, late last year. At that point, no one was really raising the concern about interest rates, Most of them are dealing with the Fifth Third of the world, those kind of regulated banks, so who tend to be a little bit more conservative on leverage anyway, right? They know the model. We're typically in a franchise segment of the lender. I've talked to the lenders quite a bit since 2020, as you could imagine. You know, whether it's the lending community or whether it's investors trying to get into our system, they know the returns are pretty strong.
You know, the ROIs are strong, the cash generation is strong. Pre-COVID, a typical franchisee's store, after paying us 7% royalty, round numbers, and spending 9% of monthly member dues on marketing, they were still earning, for a mature store, 3-years-plus old, high 30%, low 40% EBITDA margins. That's pre-COVID. Now, depending on how they were affected during the years of 2020 and 2021 with their membership and how politicized, frankly, it was in their markets, some have come back and then some to those levels, and some are still not there yet because their membership hasn't fully rebounded. We don't see anything getting in the way of ultimately all of these stores rebounding. I think back to your question, the amount of cash they generate allows for the development engine to keep going.
Now, if rates go back to the Jimmy Carter days, you know, that's a different story. I don't think anyone's predicting that, thankfully. I think franchisees and people trying to get in still see that relatively speaking, this model produces things that very few do, if any.
The comment, so the members per gym is still what you can track in terms of whether the restrictions or not. If, like, you know, the, I don't even know how to call it that. You know, the COVID aggressive states versus the COVID loose states, if you will.
Yeah.
That, like, that's what determines, like, whether your membership has come back or not?
Quite a bit. Yeah.
Is it so it's literally?
For sure.
Like North Carolina was COVID restricted and that's a tough state and other states aren't.
Take a state like in Michigan where.
Yeah
...It was very politicized and, you know.
That's interesting.
I think, you know, at the end of the day, thankfully, most of this is behind us and it's just a question of how these states recover.
Yeah.
There's no new competitor on the horizon that's preventing membership from getting back to its previous levels. It's just a matter of time.
Got you.
The recent changes we made, back to your question about interest rates, the changes we made, excuse me, May of 2022, we raised our Black Card price, which is more than 60% of our membership base, to $24.99 from $22.99. Here at the beginning of this year, we raised the annual fee from $39 - $49. Those two things alone will improve the four-wall margins of new stores by 300 - 400 basis points, depending on your mix of Black Card.
Yeah.
That really goes back to these returns are while there's a little bit of headwind on construction costs...
Oh, yeah.
There's a little bit of headwind on interest rates. Those prior margins are now further enhanced 'cause every new member is paying those higher rates in a new store.
In the context of like, opening up the territory for a franchisee that took on significant leverage, before COVID, are there any opportunities out there to open up, like previously assigned ADAs? where like if some franchises choose to be more aggressive...
Mm-hmm
like they can like get the opportunity? Or is this like a one-off situation? Or like we should expect like any small developments like this going forward, like where a t that scale, it wouldn't really matter or like impact the three-year outlook you gave on those total store openings. Like, is there anything else we should be mindful there?
Do you wanna start?
Yeah. I'll start and you-
Okay, sure.
I would say that we've pulled back ADAs in the past, small ones off and ons. Not because the clubs weren't doing well, but they didn't keep up with their development schedules. Take it back and resell it to somebody else. We've really haven't brought in a new franchisee in, pshew, over five, six years probably.
Yeah.
A new franchisee. They're all just existing franchisees wanting to buy more dirt. They bought a 20 club ADA. They're at club 18. I want more Runway. They're in line to get in and PE shops looking to get in as well. You know, as that happens or if that happens, there's always people wanting to go in and take a little more territory.
So there have been-
Yeah.
No new franchisees in 5 - 6 years? I actually didn't know that.
Yeah.
Okay.
Yeah. There are new investors who come in that they buy into-
Oh.
-an existing franchisee.
A part of the existing group.
Right.
Okay.
Right. Then the owner's role typically.
Okay.
Not typically, always.
Sure.
It's just a matter of how much. I think back to the.
It's hard to coming off.
what Chris was saying, you know, runway new store opportunities when they're within their area development agreement are a huge part of their asset. The stores they own and operate make a bunch of money, but it's also the value of the stores that could be developed, and people want more runway. If there's a chance to build another store, they're gonna wanna to add it to their area development agreement obligations. Right now, if they don't develop, they'll lose that runway. Without runway, a multiple... If somebody's transacting in our system, the EBITDA multiple on the business, if there is runway, significant runway, it's probably gonna be 8-9x. If there is no runway, it's gonna be probably 5-6x, right?
Not having your pipeline is an important asset that people wanna keep. First point. Second point is, at the exit, and again, exit meaning somebody's, you know, taking some chips off the table, the value of a club's probably gonna be $6 million-$7 million. It's gonna cost you two and a half million dollars to $3 million to build these days with higher inflation. The more you build, the more you make on the exit. There's built-in incentives to keep the development engine going.
Yes. I mean, your system is one of the very rare systems, if not unique systems, that does have value in the franchise rights.
Yeah.
I mean, you would have to pay for them yourself. Reacquired franchise rights becomes as an intangible asset.
Right. Right. Right.
Yes, I mean, we have heard that a lot. You touched on, you know, there's no new competition. You kind of like you threw that out there, it's a very important part of the story. We had spent, gosh, I mean, I don't know how many dozens of hours kind of talking about what the gym landscape was going to look post-COVID versus pre-COVID, at-home gym use, Peloton taking over digital fitness, the whole thing. Like, no one's laughing. You know, listen, it is what it is.
Not everybody said that.
Where, well aware. By the way, it's like the fact. Transcripts are what they are for a reason, right?
Yes. Yes.
You know, it's like people are gonna be sick of working at home by themselves. Like, what kind of fun is that?
Yeah.
You know, anyway, so sorry. Well, let's just get back. Where are we? 2023 gym competition versus 2019, give us a state of the landscape of how it looks today, and, you know, is this a more or less competitive environment? As a consumer has been affected in some way, clearly.
Mm-hmm.
Maybe it's positive or, to me, a positive or negative.
Yeah. So we had about 25% of the gyms in the country close through COVID, so it's like 10,000 of the 41,000 that were in the country pre-COVID. Most of those are made up of boutiques, so like just the cycle clubs.
Yeah
... yoga, Pilates, that type of stuff. About 30% of those closed and 14% of full-sized gyms closed. That's part of the consolidation. I'd say some of the more substantial, particularly the low-cost providers, they pretty much weathered the storm as well.
Mm-hmm.
Saw a few closures as well, but they're still there. As you've heard us talk about, surely Tom talked about a lot, is that out of the 17 low-cost competitors.
Yeah
all of them put together are.
We're 60% larger than all of them combined.
So-
60% larger than the-
All of them.
Than the number
Seventeen
... 2-18?
Correct.
Okay.
Store count, so membership-
Yeah
... is even a bigger number.
Okay.
The next closest competitor would be Crunch at about 400 stores.
Right.
Yeah, Crunch has 2 million members. We have 17 million.
Wow.
Is what they report?
Yeah.
We had, you know, we had previously talked about, you know, kind of the opportunities that were existing from closure of certain mid to large format retailers, a lot of like shopping centers and what have you in suburbs. Obviously, there was kind of a migration of people from urban to suburbs. Let's maybe take it the other direction. As, you know, certain offices in urban, occupancy is obviously a lot lower. In other words, open space is a lot higher in 2023 than years ago. I mean, how might the site profile change as, you know, there are commercial tenants, you know, the office people aren't coming back, and you can fill 20,000 sq ft and provide a service to a area that you guys currently aren't in. How might that be? Is that an op... Is that actually an opportunity? Obviously, there's a lot of conversation around commercial real estate.
Yeah.
You know, most of, you know, mostly urban office. Like, how might that actually give you an opportunity?
I think it depends on the market, John, right? I think. You know, I. We could be wrong. We think the whole work from home thing is probably shifting. You know, Mark Zuckerberg's letter this morning notwithstanding or maybe validating that. You know, I think franchisees are keen in their markets of where the availability is and have a site. I think the other thing is, unlike a QSR or some other concept, we know exactly where our members live, and we know-
Yeah
how far they're willing to drive, and that's. What does that look like sub, in suburban versus urban or central business district like precincts. I think it really is depends on the market. We know that people wanna drive max kind of 15 minutes.
Mm-hmm
... to a gym. Convenience is a big part of what we offer. We do have some downtown locations. You know, they tend to have more Same price, same price in Manhattan.
Yeah. Mm-hmm
As it is in, some other smaller town in terms of the dues that members pay. It's just they, excuse me, tend to have a lot more members.
Right.
The economics still work. I think it's really a market-by-market basis.
Is that beginning to change? Just commercial, I mean, are you beginning to notice a lot more-
We have not seen a seismic shift in.
A lot more interest from commercial. Okay, interesting.
Yeah.
I wonder if that will happen in the next four months.
Could, it could. Yeah.
now Bed Bath & Beyond.
Yeah, I was thinking about that. That's a more typical Bed Bath & Beyond, old Toys R Us boxes. Those are the ones that Office Depot-like boxes we like to have.
Just getting back on the franchise side here. Can you discuss like the franchisee's cash conversion status at this point? Like, how the health of the entire franchise system has been evolving with like more focus on franchises which had like most impact from the closures, like say, California or like the Michigan market we just talked about, who was slowest to open. Like, how are they seeing the ramp in new stores versus what you guys saw pre-COVID?
Mm-hmm.
Like year one, like 40%, 50%, year two, 20%. Like, those are some of the numbers, like, again, from the past. Like, how has that changed? If you can give any insight on how you plan to backstop any kind of like growth in the near to medium term, if it comes to that, like where, like you can talk about like franchise release, like abatements of like royalties or like advertising. Anything like of those sorts of discussions. Like anything you can share there in terms of.
You want me to start?
Yeah.
I think the first thing is the all the markets are in a different place. The good news is 75% of the units are owned by franchisees who operate more than one state. If they were in a state that was more impacted negatively, say, you know, folks in California have a lot of closures and reopenings, they might have stores in Florida that weren't nearly as affected, right? In 2020, the average Planet billed members 6 out of 12 months. We don't have drive-thru or takeout to offset, you know, some of that loss.
Yeah.
Once you reopen, we turn the switch on and everybody gets billed. It's not like there's a ramp back up to billing and revenue. It's sort of immediate. Again, depending on the franchisee, we collect financial information from our franchisees twice a year. We have done so since 2020. We know where they are, we know where their leverage is, we know where the covenants are to the extent they have that. Most of the bigger guys do. I'd say everybody's definitely moving northeast on the chart, so to speak. Everybody's getting better. Some have eclipsed where they were in terms of membership and revenue pre-COVID in those older stores, you know, that were kind of at their peak in February of 2020. Others have not yet come back, they're close.
As a system, you know, the gap from where we were to where we are is narrowing quite a bit on membership and even better on revenue for the reasons I mentioned earlier. In terms of new store ramp, each successive year of COVID, we opened 130 stores, by the way, in an industry that lost 25% of all the units permanently. We opened 130 each roughly in 2020 and 2021, which matched our record year of openings in 2019. We were still growing.
Mm-hmm.
Now, the where we expect those stores to be in revenue to where they were each year, 2020 wasn't as good, 2021 was better, 2022 was even better.
Okay.
We're up in the 80%-85% of what we would expect it to be on a membership and revenue basis.
Mm-hmm.
For the stores open in the 2021 20 and 21 class. How's the 22 class opening relative to your expectations
Strong. Yeah. Yeah. There, everything continues to move in the right direction. I would say back to what Chris mentioned earlier about the best way margins expand is member growth. Even our first store in Dover, New Hampshire, still has member growth. We had 53 straight quarters of positive comps pre-COVID. The simple average of that 53 quarters was 12%. It wasn't just barely positive. It was incredibly positive. About 75%-80% of our same-store sales growth is typically member growth. Part of that is because every new member who joins, 9% of their dues are going back into the marketplace to market.
We spent roughly a quarter of a billion dollars marketing as a system last year. It's a scale that no one can really match. Most of our competitors, if they're advertising, they're advertising in January, then they're radio silent for the other 11 months. We're not. We're constantly marketing, trying to get people off the couch, driving member growth. The way our model works is if you have 6,000 members in a store or 7,000 members, your operating costs are basically the same. We don't add labor for more traffic. The only thing we probably spend a little bit more on is water, electricity, and cleaning materials. It's very minimal. It's a simple, low-cost, relatively fixed-cost model. Every new member that joins from 6,000 - 6,500 and, you know, whatever-
Sure.
Whatever the growth is, $0.84, they have to pay us royalty and pay marketing dollars that I mentioned earlier. $0.84 is flowing to the bottom line. That's how the margin expands.
I wanna make sure we hit two things. Marketing, very important. Nobody spends in restaurants, like, as you know, my lens, spends 9% of sales and marketing. It's anywhere between like 0% and 6% on the very high end, with probably 3%-4% the average. Completely different business.
Yeah.
Just.
Yeah.
Just as a point of fact. Secondly, of their marketing, no one spends the vast majority of it on local.
Right.
Because national is much more efficient.
Yeah.
Talk about just say, "Hey, listen, we're the good outlier because we're getting so much ROI, and we love that split between, you know, of the 9% advertising, 7% local, 2% national." Or is there an opportunity to say, "Hey, listen, we're spending a quarter million dollars a year..."?
Billion.
Like a quarter billion dollars.
Right.
$250 million. Thank you so much for that. $750,000 doesn't get you far, does it? Thank you. Like, we're.
It's one of those things where.
I don't even know if we're on a, we're on a webcast or not, anyway, it's always good to speak specifically. That's what. Listen, that's why we're all here. Okay. All right. You get my question. $250 million on marketing. Is the next $25 million as incremental? Can you make the shift? Can you change the percent? You know, just talk about that spend overall because you are different, you know, than some of the things that I've looked at.
Yeah. You know, I think it's when you look at the fact that we're catering to casual and first-timers, and almost 40% of our joins are first-time gym members, we haven't seen a level of marketing be diminished in return, right? Our Cost Per Acquisition compared to our Lifetime Value is light years apart. 80% of the U.S. population doesn't have a gym membership today. There's just so many more people to get off the couch and get working out. We don't see any reason to ever pull back the total spend.
Now, to your point, I do believe in time and working with the three marketing agencies, we have one that handles our national ad and then two that the franchisees work with the local, that we'll continue to learn best practices and then maybe determine or decide, do we begin to move some of that 7% over to the 2% national and divide it some. The next level would after that would be do we need 9% when we've got 4,000 stores?
Right.
You know, which is one other thing.
Yeah.
We haven't seen diminishing return yet. It's hard to see that happen. There definitely could be a point where we'd need to spend really $500 million a year in marketing.
Right. Yeah. Half a bill-
Yeah.
Yeah, half a billion. What the incremental...
Mm-hmm. Again, every incremental member is dues. Go back to marketing and our member growth, you know, 20, 12, 53 straight quarters of positive comps. We're back into the positive comp world again. It's member growth.
Yeah.
You know, the average members per store will continue to grow. Each store will be spending more money today in marketing in five years than they did five years ago.
The second one, I wanna make sure that we hit. I mean, part of the constraint in developing, which is still a great number in 22, is HVAC and other forms of equipment. Not just HVAC, but maybe even getting like junction boxes.
Yeah.
-panels, what have you, installed. Where are we in terms of that constraint? If that constraint is being better, what's the next constraint in opening your store growth that you need to think about?
I would say we're marginally better. You know, if our, Depending on which of the big manufacturers, if the lead time was 6 to 8 weeks pre-COVID for an HVAC unit, it got up to 45+ weeks at its worst, and maybe it's just inside of 40, but it's not significantly approaching where it was historically. I think what that's, what that has done, John, is caused franchisees to be a little cautious. You know, our typical new store opens with what we call a presale, where before it opens, you might have 500 to 1,000 members sign up to join. They know you're gonna open on December 15th, ready to go.
Well, if the HVAC unit that you thought was gonna be there on December first is now gonna be there or whenever, is now gonna be there in January, you got a bunch of people who signed up to join, who can't join. If that happens to you once, you're probably gonna be a little. You're gonna slow walk the next one, or if you heard it happen to somebody else, you're probably gonna think twice about when you want it. It's just. It's a, it's a bit of a drag. It's not, it's not a stone wall that people can't get through. It's just, it's just altering how people think about that.
Okay. and the constraint, the constraint after HVAC, like where does it like bend? Like what's the?
It
What's the tight point in?
The switch boxes and some... it's... What was it called?
No.
Yeah, something like that. I can't remember the-
Switch boxes, the keypads.
Yeah. Yeah. Right. Exactly. you know, we hope that gets better. It's not gotten worse. It's just hasn't it's like HVAC. It's improved slightly, not significantly.
Okay.
Just like closing out, like here on the TAM side, like, you guys have spoken up about international opportunities a lot. In the last few months, I think like the priorities like went up with like three or four new markets exploring each year versus one or two previously. Can you discuss anything like that has changed a lot here? I mean, any specific like markets you would like to like give us a little bit of preview of like, Canada or Mexico or Australia or anything. Give us a sense of like how do you view, like a regional market, like in terms of like ramping or like where do you see the economics shake out as you do your initial diligence?
You start.
Sure. Sure. We're in 5, 6 countries today.
Mm-hmm.
We're going New Zealand later this year. Before our international strategy was more opportunistic. Someone of us wanna go to a country, we'd vet it out, search it out, and would let them open and begin to develop it. We don't really have a designated international team that ran that. It was just more of our domestic team taking on as it came in. We're in the process now of building an international team that is 100% focused on that. We've yet to find a market that doesn't work out. Frankly, most of these markets now, the members per store is actually even higher than the U.S.
I think the big difference here, when you think about the US, when we say 20% have a gym membership in the US, 80% doesn't, that's the best worldwide. Places like Mexico, where it's 2%-3% have a gym membership, and it's not cause they don't wanna work out. There's just no access. You know, at $10 a month, it's extremely affordable. Now with the international teams that are doing one or two opportunistically, we're gonna be more going out and looking for sites with potential franchisees, and hopefully do two or three a four year.
I think we need to ramp into that, right? If we're doing 1-ish a year, once we get the team set up and with Edward's leadership pushing the gas pedal on that, we'll get to maybe 2-3. It's not gonna be, you know, this year. I think the other thing too is what we do when we look around the world, no one else does. There are low-cost competitors, but they're not at our cost.
Yeah.
We would put that that in quotes. When we look. As importantly, no one does the Judgement Free, no intimidation, which is every bit as part of important as in our recipe as the $10. When you look at at things internationally, they're for what we would call a lunk. Somebody who wants to, you know, flip tires, bang heavy weights. It's what you see in most other gyms, where the average person on the couch is afraid to go into that environment 'cause it's so intimidating. That's an important but unrecognized element of our model.
Guys, thank you so much.
Yeah. Thank you.
All right. Appreciate it. Thank you all. Thanks for your time.
Thank you.