> For each Planet Fitness, much of the cost is upfront. That is, they have to buy the property, renovate (or build), and then buy all the machines.

As said before, this is not remotely accurate. Firstly, nearly all of these franchises rent their building space. Secondly, as with any B&M business, fully loaded employee costs comprise a majority of operating expenses. Thirdly, gym equipment maintenance is a non-trivial ongoing factor. Certainly the initial equipment purchase is a bubble, but the idea that PF is only fiscally viable due to equipment longevity is specious at best.

You can see an estimate breakdown of PF expenses here: http://www.franchisedirect.com/fitnessfranchises/planet-fitn...

Note fitness equipment estimates range from $35,930 to $944,800; re-equip costs are estimated at $359,900 to $944,800. (that low estimate on re-equip may be a typo, it is likely re-equip costs are estimated in the same range)