PLANET FITNESS, INC., S-1 filed on 5/27/2016
Securities Registration Statement
Document and Entity Information
3 Months Ended
Mar. 31, 2016
Document And Entity Information [Abstract]
 
Document Type
S-1 
Amendment Flag
false 
Document Period End Date
Mar. 31, 2016 
Trading Symbol
PLNT 
Entity Registrant Name
PLANET FITNESS, INC. 
Entity Central Index Key
0001637207 
Entity Filer Category
Non-accelerated Filer 
Condensed consolidated balance sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Current assets:
 
 
 
Cash and cash equivalents
$ 38,268 
$ 31,430 
$ 43,291 
Accounts receivable, net
10,446 
19,079 
19,275 
Due from related parties
1,005 
4,940 
1,141 
Inventory
1,476 
4,557 
3,012 
Restricted assets-national advertising fund
5,300 
1,962 
 
Notes Receivable, current
 
 
1,290 
Prepaid expenses
 
5,152 
4,355 
Other current assets
12,318 
5,825 
2,954 
Other current assets
 
10,977 
 
Total current assets
68,813 
72,945 
75,318 
Property and equipment, net
54,302 
56,139 
49,579 
Intangible assets, net
268,679 
273,619 
295,162 
Goodwill
176,981 
176,981 
176,981 
Deferred income taxes
115,523 
117,358 
260 
Notes receivable, net of current portion
 
 
2,007 
Other assets, net
1,368 
2,135 
2,675 
Total assets
685,666 
699,177 
601,982 
Current liabilities:
 
 
 
Current maturities of long-term debt
5,100 
5,100 
3,900 
Accounts payable
10,090 
23,950 
26,738 
Accrued expenses
9,853 
13,667 
8,494 
Equipment deposits
5,253 
5,587 
6,675 
Deferred revenue, current
15,477 
14,717 
14,549 
Payable to related parties pursuant to tax benefit arrangements, current
5,870 
3,019 
 
Other current liabilities
253 
212 
529 
Total current liabilities
51,896 
66,252 
60,885 
Long-term debt, net of current maturities
478,875 
479,779 
375,881 
Deferred rent, net of current portion
4,665 
4,554 
3,012 
Deferred revenue, net of current portion
10,277 
12,016 
9,330 
Deferred tax liabilities
 
 
606 
Payable to related parties pursuant to tax benefit arrangements, net of current portion
132,208 
137,172 
 
Other liabilities
484 
484 
519 
Total noncurrent liabilities
626,509 
634,005 
389,348 
Commitments and contingencies (note 11)
   
   
   
Stockholders' equity (deficit):
 
 
 
Members' equity
 
 
146,156 
Accumulated other comprehensive income (loss)
(2,387)
(1,710)
(636)
Additional paid in capital
577 
352 
 
Accumulated deficit
(11,805)
(14,032)
 
Total stockholders' deficit attributable to Planet Fitness Inc.
(13,605)
(15,380)
145,520 
Non-controlling interests
20,866 
14,300 
6,229 
Total stockholders' deficit/members' equity
7,261 
(1,080)
151,749 
Total liabilities and stockholders' deficit/members' equity
685,666 
699,177 
601,982 
Class A Common Stock [Member]
 
 
 
Stockholders' equity (deficit):
 
 
 
Common stock, value
4 
4 
 
Class B Common Stock [Member]
 
 
 
Stockholders' equity (deficit):
 
 
 
Common stock, value
$ 6 
$ 6 
 
Condensed consolidated balance sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Mar. 31, 2016
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Mar. 31, 2016
Class B Common Stock [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Accounts receivable, allowance for bad debts
$ 637 
$ 629 
$ 399 
 
 
 
 
Property and equipment, accumulated depreciation
$ 25,197 
$ 23,525 
$ 15,728 
 
 
 
 
Common stock, par value
 
 
 
$ 0.0001 
$ 0.0001 
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
 
 
 
300,000,000 
300,000,000 
100,000,000 
100,000,000 
Common stock, shares issued
 
 
 
36,598,000 
36,598,000 
62,067,000 
62,112,000 
Common stock, shares outstanding
 
 
 
36,597,985 
36,597,985 
62,067,000 
62,112,000 
Condensed consolidated statements of operations (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenue:
 
 
 
 
 
Franchise
$ 21,491,000 
$ 16,967,000 
$ 71,762,000 
$ 58,001,000 
$ 33,684,000 
Commission income
6,186,000 
4,790,000 
16,323,000 
13,805,000 
10,473,000 
Corporate-owned stores
25,697,000 
23,546,000 
98,390,000 
85,041,000 
67,364,000 
Equipment
29,969,000 
31,619,000 
144,062,000 
122,930,000 
99,488,000 
Total revenue
83,343,000 
76,922,000 
330,537,000 
279,777,000 
211,009,000 
Operating costs and expenses:
 
 
 
 
 
Cost of revenue
23,639,000 
25,946,000 
113,492,000 
100,306,000 
81,353,000 
Store operations
14,732,000 
14,341,000 
57,485,000 
49,476,000 
41,692,000 
Selling, general and administrative
11,845,000 
14,138,000 
55,573,000 
35,121,000 
23,118,000 
Depreciation and amortization
7,703,000 
8,201,000 
32,158,000 
32,341,000 
28,808,000 
Other (gain) loss
(186,000)
(6,000)
(273,000)
994,000 
 
Total operating costs and expenses
57,733,000 
62,620,000 
258,435,000 
218,238,000 
174,971,000 
Income from operations
25,610,000 
14,302,000 
72,102,000 
61,539,000 
36,038,000 
Other expense, net:
 
 
 
 
 
Interest expense, net
(6,367,000)
(4,756,000)
(24,549,000)
(21,800,000)
(8,912,000)
Other income (expense)
393,000 
(736,000)
(275,000)
(1,261,000)
(694,000)
Total other expense, net
(5,974,000)
(5,492,000)
(24,824,000)
(23,061,000)
(9,606,000)
Income before income taxes
19,636,000 
8,810,000 
47,278,000 
38,478,000 
26,432,000 
Provision for income taxes
3,291,000 
272,000 
9,148,000 
1,183,000 
633,000 
Net income
16,345,000 
8,538,000 
38,130,000 
37,295,000 
25,799,000 
Less net income attributable to non-controlling interests
12,977,000 
113,000 
19,612,000 
487,000 
361,000 
Net income attributable to Planet Fitness, Inc.
3,368,000 
8,425,000 
18,518,000 
36,808,000 
25,438,000 
Class A Common Stock [Member]
 
 
 
 
 
Net income per share of Class A common stock:
 
 
 
 
 
Basic & diluted
$ 0.09 1
 
$ 0.11 2
 
 
Pro forma earnings per share, Basic
 
 
$ 0.17 
 
 
Pro forma earnings per share, Diluted
 
 
$ 0.17 
 
 
Weighted-average shares of Class A common stock outstanding:
 
 
 
 
 
Basic and diluted, shares
36,598 1
 
36,244 2
 
 
Pro forma weighted average number of shares, Basic
 
 
36,598 
 
 
Pro forma weighted average number of shares, Diluted
 
 
36,598 
 
 
Earnings per share:
 
 
 
 
 
Basic & diluted
$ 0.09 1
 
$ 0.11 2
 
 
Pro forma earnings per share, Basic
 
 
$ 0.17 
 
 
Pro forma earnings per share, Diluted
 
 
$ 0.17 
 
 
Weighted-average shares of Class A common stock outstanding:
 
 
 
 
 
Basic and diluted, shares
36,598 1
 
36,244 2
 
 
Pro forma weighted average number of shares, Basic
 
 
36,598 
 
 
Pro forma weighted average number of shares, Diluted
 
 
36,598 
 
 
Pro Forma [Member]
 
 
 
 
 
Other expense, net:
 
 
 
 
 
Income before income taxes
 
8,810,000 
47,278,000 
 
 
Provision for income taxes
 
1,190,000 
10,036,000 
 
 
Net income
 
7,620,000 
37,242,000 
 
 
Less net income attributable to non-controlling interests
 
6,205,000 
30,837,000 
 
 
Net income attributable to Planet Fitness, Inc.
 
$ 1,415,000 
$ 6,405,000 
 
 
Pro Forma [Member] |
Class A Common Stock [Member]
 
 
 
 
 
Net income per share of Class A common stock:
 
 
 
 
 
Basic & diluted
 
$ 0.04 
$ 0.17 
 
 
Weighted-average shares of Class A common stock outstanding:
 
 
 
 
 
Basic and diluted, shares
 
36,598 
36,598 
 
 
Earnings per share:
 
 
 
 
 
Basic & diluted
 
$ 0.04 
$ 0.17 
 
 
Weighted-average shares of Class A common stock outstanding:
 
 
 
 
 
Basic and diluted, shares
 
36,598 
36,598 
 
 
Condensed consolidated statements of comprehensive income (loss) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
 
 
Net income including non-controlling interests
$ 16,345 
$ 8,538 
$ 38,130 
$ 37,295 
$ 25,799 
Other comprehensive (loss) income, net:
 
 
 
 
 
Gains (losses) on interest rate swaps, net of tax
 
 
 
(92)
92 
Unrealized loss on interest rate caps, net of tax
(583)
(779)
(1,388)
(662)
 
Foreign currency translation adjustments
(93)
101 
314 
26 
 
Total other comprehensive (loss) income, net
(676)
(678)
(1,074)
(728)
92 
Total comprehensive income including non-controlling interests
15,669 
7,860 
37,056 
36,567 
25,891 
Less: total comprehensive income attributable to non-controlling interests
12,491 
113 
19,557 
487 
361 
Total comprehensive income attributable to Planet Fitness, Inc.
$ 3,178 
$ 7,747 
$ 17,499 
$ 36,080 
$ 25,530 
Condensed consolidated statements of cash flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Cash flows from operating activities:
 
 
 
 
 
Net income
$ 16,345 
$ 8,538 
$ 38,130 
$ 37,295 
$ 25,799 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
7,703 
8,201 
32,158 
32,341 
28,808 
Amortization of deferred financing costs
371 
305 
1,596 
1,315 
1,582 
Amortization of favorable leases and asset retirement obligations
99 
113 
478 
501 
246 
Amortization of interest rate caps
75 
 
28 
 
 
Deferred tax (benefit) expense
1,354 
7 
6,135 
(63)
(1,430)
Gain on decrease in tax benefit arrangement
 
 
(2,549)
 
 
Provision for bad debts
7 
11 
667 
139 
57 
Gain on disposal of property and equipment
(186)
(6)
(273)
(545)
(52)
Loss on extinguishment of debt
 
 
 
4,697 
 
Equity-based compensation
576 
 
4,877 
 
 
Changes in operating assets and liabilities, excluding effects of acquisitions:
 
 
 
 
 
Accounts receivable
8,864 
9,792 
(414)
(3,632)
(3,101)
Notes receivable and due from related parties
3,544 
50 
4,210 
177 
1,281 
Inventory
3,081 
1,001 
(1,545)
(769)
(1,750)
Other assets and other current assets
(4,632)
422 
(5,720)
(1,818)
(776)
Accounts payable and accrued expenses
(16,202)
(16,745)
263 
5,042 
13,456 
Other liabilities and other current liabilities
30 
15 
99 
(2)
421 
Income taxes
(2,314)
290 
115 
(1,670)
(364)
Payable to related parties pursuant to tax benefit arrangements
(2,113)
 
 
 
 
Equipment deposits
(334)
(230)
(1,088)
4,028 
(1,803)
Deferred revenue
(1,091)
(717)
2,994 
842 
3,398 
Deferred rent
85 
992 
1,502 
1,527 
1,171 
Net cash provided by operating activities
15,262 
12,039 
81,663 
79,405 
66,943 
Cash flows from investing activities:
 
 
 
 
 
Additions to property and equipment
(865)
(5,326)
(19,488)
(16,650)
(7,287)
Acquisition of franchises
 
 
 
(38,638)
 
Proceeds from sale of property and equipment
20 
6 
327 
926 
150 
Net cash used in investing activities
(845)
(5,320)
(19,161)
(54,362)
(7,137)
Cash flows from financing activities:
 
 
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
 
 
156,946 
 
 
Use of proceeds from issuance of Class A common stock to purchase Holdings Units
 
 
(156,946)
 
 
Proceeds from issuance of long-term debt
 
120,000 
120,000 
390,000 
 
Principal payments on capital lease obligations
(12)
(140)
(376)
(1,162)
(3,291)
Repayment of long-term debt
(1,275)
(975)
(14,800)
(185,800)
(10,544)
Net repayments on line of credit
 
 
 
 
(3,525)
Payment of deferred financing and other debt-related costs
 
(1,698)
(1,698)
(7,785)
(19)
Premiums paid for interest rate caps
 
 
(880)
(2,373)
 
Contributions from variable interest entities
 
 
 
 
3,402 
Distributions to variable interest entities
 
 
 
(458)
(960)
Distributions to Continuing LLC Members
(6,411)
(139,688)
(176,486)
(205,374)
(23,057)
Net cash used in financing activities
(7,698)
(22,501)
(74,240)
(12,952)
(37,994)
Effects of exchange rate changes on cash and cash equivalents
119 
23 
(123)
(67)
 
Net (decrease) increase in cash and cash equivalents
6,838 
(15,759)
(11,861)
12,024 
21,812 
Cash and cash equivalents, beginning of period
31,430 
43,291 
43,291 
31,267 
9,455 
Cash and cash equivalents, end of period
38,268 
27,532 
31,430 
43,291 
31,267 
Supplemental cash flow information:
 
 
 
 
 
Net cash paid for income taxes
4,336 
211 
2,834 
1,604 
1,826 
Cash paid for interest
5,815 
4,614 
23,220 
20,756 
7,638 
Non-cash investing activities:
 
 
 
 
 
Non-cash consideration for acquisition of franchises
 
 
 
3,000 
 
Non-cash additions to property and equipment
170 
384 
207 
1,049 
 
Non-cash financing activities:
 
 
 
 
 
Non-cash distributions to members
 
 
 
901 
 
Unsettled distributions to members
 
$ 7,496 
 
 
 
Consolidated Statement of Changes in Equity (USD $)
In Thousands, except Share data
Total
USD ($)
Members' Equity [Member]
USD ($)
Accumulated Other Comprehensive Loss [Member]
USD ($)
Additional Paid-in Capital [Member]
USD ($)
Accumulated Deficit [Member]
USD ($)
Non-Controlling Interests [Member]
USD ($)
Class A Common Stock [Member]
Class A Common Stock [Member]
Common Stock [Member]
USD ($)
Class B Common Stock [Member]
Class B Common Stock [Member]
Common Stock [Member]
USD ($)
Beginning balance at Dec. 31, 2012
$ 316,639 
$ 313,242 
 
 
 
$ 3,397 
 
 
 
 
Net income
25,799 
25,438 
 
 
 
361 
 
 
 
 
Other comprehensive income
92 
 
92 
 
 
 
 
 
 
 
Contributions from members
3,402 
 
 
 
 
3,402 
 
 
 
 
Distributions to members
(24,017)
(23,057)
 
 
 
(960)
 
 
 
 
Ending balance at Dec. 31, 2013
321,915 
315,623 
92 
 
 
6,200 
 
 
 
 
Net income
37,295 
36,808 
 
 
 
487 
 
 
 
 
Other comprehensive income
(728)
 
(728)
 
 
 
 
 
 
 
Distributions to members
(206,733)
(206,275)
 
 
 
(458)
 
 
 
 
Ending balance at Dec. 31, 2014
151,749 
146,156 
(636)
 
 
6,229 
 
 
 
 
Net income
38,130 
 
 
 
 
 
 
 
 
 
Other comprehensive income
(1,074)
 
 
 
 
 
 
 
 
 
Distributions to members prior to the recapitalization transactions
(164,693)
(164,693)
 
 
 
 
 
 
 
 
Net income prior to the recapitalization transactions
14,676 
14,412 
 
 
 
264 
 
 
 
 
Other comprehensive loss prior to the recapitalization transactions
(1,054)
 
(1,054)
 
 
 
 
 
 
 
Equity-based compensation expense recorded in connection with recapitalization transactions
4,525 
4,525 
 
 
 
 
 
 
 
 
Effect of the recapitalization transactions
 
(400)
 
 
138 
252 
 
3 
 
7 
Effect of the recapitalization transactions, shares
 
 
 
 
 
 
26,107,000 
 
72,603,000 
 
Issuance of Class A common stock in IPO, net of commissions
 
 
 
 
 
 
 
1 
 
(1)
Issuance of Class A common stock in IPO, net of commissions, shares
 
 
 
 
 
 
10,491,000 
 
(10,491,000)
 
Tax benefit arrangement liability and deferred taxes arising from the recapitalization transactions and IPO
(18,276)
 
 
 
(18,276)
 
 
 
 
 
Net income subsequent to the recapitalization transactions
23,454 
 
 
 
4,106 
19,348 
 
 
 
 
Equity-based compensation expense subsequent to the recapitalization transactions
352 
 
 
352 
 
 
 
 
 
 
Distributions to members of Pla-Fit Holdings subsequent to the recapitalization transactions
(11,793)
 
 
 
 
(11,793)
 
 
 
 
Other comprehensive loss subsequent to the recapitalization transactions
(20)
 
(20)
 
 
 
 
 
 
 
Ending balance (shares) at Dec. 31, 2015
 
 
 
 
 
 
36,597,985 
 
62,112,000 
 
Ending balance at Dec. 31, 2015
$ (1,080)
 
$ (1,710)
$ 352 
$ (14,032)
$ 14,300 
 
$ 4 
 
$ 6 
Business organization
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Business organization

(1) Business organization

Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with more than 8.3 million members and 1,171 owned and franchised locations (referred to as stores) in 47 states, the District of Columbia, Puerto Rico, Canada and the Dominican Republic as of March 31, 2016.

The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:

 

•  

Licensing and selling franchises under the Planet Fitness trade name.
•  

Owning and operating fitness centers under the Planet Fitness trade name.
•  

Selling fitness-related equipment to franchisee-owned stores.

The Company was formed as a Delaware corporation on March 16, 2015 for the purpose of facilitating an initial public offering (the “IPO”) which was completed on August 11, 2015 and related transactions in order to carry on the business of Pla-Fit Holdings, LLC and its subsidiaries (“Pla-Fit Holdings”). As of August 5, 2015, in connection with the recapitalization transactions that occurred prior to the IPO, the Company became the sole managing member and holder of 100% of the voting power of Pla-Fit Holdings and 37.1% of the economic interest. Pla-Fit Holdings owns 100% of Planet Intermediate, LLC which has no operations but is the 100% owner of Planet Fitness Holdings, LLC, a franchisor and operator of fitness centers. With respect to the Company, Pla-Fit Holdings and Planet Intermediate, LLC, each entity owns nothing other than the respective entity below it in the corporate structure and each entity has no other material operations.

Subsequent to the IPO and the related recapitalization transactions, the Company is a holding company whose principal asset is a controlling equity interest in Pla-Fit Holdings. As the sole managing member of Pla-Fit Holdings, the Company operates and controls all of the business and affairs of Pla-Fit Holdings, and through Pla-Fit Holdings, conducts its business. As a result, the Company consolidates Pla-Fit Holdings’ financial results and reports a non-controlling interest related to the portion of limited liability company units of Pla-Fit Holdings, LLC (“Holdings Units”) not owned by the Company. As of March 31, 2016, the Company owned 100% of the voting interest, and 37.1% of the economic interest of Pla-Fit Holdings. As future exchanges of Holdings Units occur, the economic interest in Pla-Fit Holdings held by Planet Fitness, Inc. will increase.

The recapitalization transactions are considered transactions between entities under common control. As a result, the financial statements for periods prior to the IPO and the recapitalization transactions are the financial statements of Pla-Fit Holdings as the predecessor to the Company for accounting and reporting purposes. Unless otherwise specified, “the Company” refers to both Planet Fitness, Inc. and Pla-Fit Holdings throughout the remainder of these notes.

Business organization

(1) Business organization

Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with approximately 7.3 million members and 1,124 owned and franchised locations (referred to as stores) in 47 states, the District of Columbia, Puerto Rico, Dominican Republic and Canada as of December 31, 2015.

The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:

 

•  

Licensing and selling franchises under the Planet Fitness trade name;
•  

Owning and operating fitness centers under the Planet Fitness trade name; and
•  

Selling fitness-related equipment to franchisee-owned stores.

In 2012 investment funds affiliated with TSG Consumer Partners, LLC (“TSG”), purchased interests in Pla-Fit Holdings.

The Company was formed as a Delaware corporation on March 16, 2015 for the purpose of facilitating an initial public offering (the “IPO”) and related transactions in order to carry on the business of Pla-Fit Holdings, LLC and its subsidiaries (“Pla-Fit Holdings”). As of August 5, 2015, in connection with the recapitalization transactions discussed below, the Company became the sole managing member and holder of 100% of the voting power and 37.1% of the economic interest of Pla-Fit Holdings. Pla-Fit Holdings owns 100% of Planet Intermediate, LLC which has no operations but is the 100% owner of Planet Fitness Holdings, LLC, a franchisor and operator of fitness centers. With respect to the Company, Pla-Fit Holdings and Planet Intermediate, LLC, each entity owns nothing other than the respective entity below it in the corporate structure and each entity has no other material operations.

Initial Public Offering

On August 11, 2015, the Company completed an IPO pursuant to which the Company and selling stockholders sold an aggregate of 15,525,000 shares of Class A common stock at a public offering price of $16.00 per share. The Company received $156,946 in proceeds from its sale of 10,491,055 shares of Class A common stock, net of underwriting discounts and commissions, which were used to purchase an equal number of limited liability company units (“Holdings Units”) from existing holders (“Continuing LLC Owners”) of interests in Pla-Fit Holdings, at a purchase price per unit equal to the IPO price per share of Class A common stock, net of underwriting discounts and commissions.

Recapitalization Transactions

In connection with the IPO, the Company and Pla-Fit Holdings completed a series of recapitalization transactions on August 5, 2015 which are described below (also see Note 12):

 

•  

Pla-Fit Holdings amended and restated the limited liability company agreement to, among other things, (i) provide for a new single class of limited liability company units, Holdings Units, (ii) exchange all membership interests of the then-existing holders of Pla-Fit Holdings membership interests for Holdings Units and (iii) appoint the Company as the sole managing member of Pla-Fit Holdings.
•  

The Company issued 72,602,810 shares of Class B common stock with voting rights but no economic rights to Pla-Fit Holdings’ existing owners on a one-to-one basis for each Holdings Unit owned.
•  

The Company merged with Planet Fitness Holdings L.P., a predecessor entity to the Company that held indirect interests in Pla-Fit Holdings, for which the Company issued 26,106,930 shares of Class A common stock to the holders of interests in Planet Fitness Holdings L.P. (the “Direct TSG Investors”).

Subsequent to the IPO and the related recapitalization transactions, the Company is a holding company whose principal asset is a controlling equity interest in Pla-Fit Holdings. As the sole managing member of Pla-Fit Holdings, the Company operates and controls all of the business and affairs of Pla-Fit Holdings, and through Pla-Fit Holdings, conducts its business. As a result, the Company consolidates Pla-Fit Holdings’ financial results and reports a non-controlling interest related to the portion of Holdings Units not owned by the Company. As of December 31, 2015, the Company held 100% of the voting interest, and approximately 37.1% of the economic interest in Pla-Fit Holdings. As future exchanges of Holdings Units occur, the economic interest in Pla-Fit Holdings held by Planet Fitness, Inc. will increase.

The recapitalization transactions are considered transactions between entities under common control. As a result, the financial statements for periods prior to the IPO and the recapitalization transactions are the financial statements of Pla-Fit Holdings as the predecessor to the Company for accounting and reporting purposes. Unless otherwise specified, “the Company” refers to both Planet Fitness, Inc. and Pla-Fit Holdings throughout the remainder of these notes.

Summary of significant accounting policies
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Summary of significant accounting policies

(2) Summary of significant accounting policies

(a) Basis of presentation and consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements as of and for the three months ended March 31, 2016 are unaudited. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “Annual Report”) filed with the SEC on March 4, 2016. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.

As discussed in Note 1, as a result of the recapitalization transactions, Planet Fitness, Inc. consolidates Pla-Fit Holdings and Pla-Fit Holdings is considered to be the predecessor to Planet Fitness, Inc. for accounting and reporting purposes. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.

The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”) and PF Melville LLC (“PF Melville”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs.

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.

 

(c) Fair Value

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015:

 

      Total fair
value at
March 31,
2016		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 376       $ —       $ 376       $ —   

 

  

 

      Total fair
value at
December 31,
2015		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,147       $ —       $ 1,147       $ —   

 

  

(d) Recent accounting pronouncements

The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 for public companies. In March 2016, the FASB issued ASU 2016-08, which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. This guidance is to be applied either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact, if any, the adoption of this guidance will have on its consolidated financial statements.

 

The FASB issued ASU No. 2015-02, Income Statement—Consolidation, in February 2015. This guidance affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the guidance 1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, 2) eliminates the presumption that a general partner should consolidate a limited partnership, 3) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and 4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-02 as of January 1, 2016, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2015-05: Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, in April 2015. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-05 as of January 1, 2016 on a prospective basis, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2016-02, Leases, in February 2016. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public companies. Early application of the amendments in this update is permitted for all entities. The Company is currently evaluating the effect that implementation of this guidance will have on its consolidated financial statements.

The FASB issued ASU No. 2016-09, Stock Compensation, in March 2016. This guidance is intended to simplify several aspects of the accounting for share-based payment award transactions. This guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is currently evaluating the effect of the standard on its consolidated financial statements.

Summary of significant accounting policies

(2) Summary of significant accounting policies

(a) Basis of presentation and consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany balances and transactions have been eliminated in consolidation.

As discussed in Note 1, as a result of the recapitalization transactions, Planet Fitness, Inc. consolidates Pla-Fit Holdings and Pla-Fit Holdings is considered to be the predecessor to Planet Fitness, Inc. for accounting and reporting purposes. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.

The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”) and PF Melville LLC (“PF Melville”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs.

 

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.

(c) Concentrations

Cash and cash equivalents are financial instruments, which potentially subject the Company to a concentration of credit risk. The Company invests its excess cash in several major financial institutions, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company maintains balances in excess of these limits, but does not believe that such deposits with its banks are subject to any unusual risk.

The credit risk associated with trade receivables is mitigated due to the large number of customers, generally our franchisees, and their broad dispersion over many different geographic areas. We do not have any concentrations with respect to our revenues.

The Company purchases equipment, both for corporate-owned stores and for sales to franchisee-owned stores, from two primary vendors. For the year ended December 31, 2015 purchases from these two vendors comprised 79% and 18%, respectively, for the year ended December 31, 2014 purchases from these two vendors comprised 66% and 25%, respectively, and for the year ended December 31, 2013 purchases from these two vendors comprised 66% and 27%, respectively, of total equipment purchases.

The Company, including Planet Fitness NAF, LLC (“NAF”) uses one primary vendor for advertising services. Purchases from this vendor totaled 49%, 61%, and 68% of total advertising purchases for the years ended December 31, 2015, 2014 and 2013, respectively (see Note 5 for further discussion of NAF).

(d) Cash and cash equivalents

The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash held within the NAF is recorded as a restricted asset (see Note 5).

(e) Revenue recognition

Franchise revenue

The following revenues are generated as a result of transactions with or related to the Company’s franchisees.

Area development fees

Franchisees contractually enter into area development agreements (ADAs) to secure the exclusive right to open franchise stores within a defined geographical area. ADAs establish the timing and number of stores to be developed within the defined geographical area. Pursuant to an ADA, a franchisee is generally required to pay an initial nonrefundable development fee for a minimum number of stores to be developed, as outlined in the respective ADA. ADA fees collected in advance are deferred until the Company provides substantially all required obligations pursuant to the ADA. As the efforts and total cost relating to initial services are affected significantly by the number of stores opened in an area, the respective ADA is treated as a divisible contract. As each new site is accepted under an ADA, a franchisee signs a franchise operating agreement for the respective franchise location. As each store opened under an ADA typically has performance obligations associated with it, the Company recognizes ADA revenue as each individual franchise location is developed in proportion to the total number of stores to be developed under the ADA. These obligations are typically completed once the store is opened or the franchisee executes the individual property lease. As of December 31, 2015 and 2014, the deferred revenue for ADAs was $10,471 and $8,215, respectively. ADAs generally have an initial term equal to the number of years over which the franchisee is required to open franchise stores, which is typically 5 to 10 years. There is no right of refund for an executed ADA. Upon default, as defined in the agreement, the Company may reacquire the rights pursuant to an ADA, and all remaining deferred revenue is recognized at that time.

Franchise fees and performance fees

For stores opened without an ADA, the Company generally charges an initial upfront nonrefundable franchise fee. Nonrefundable franchise fees are typically deferred until the franchisee executes a lease and receives initial training for the location, which is the point at which the Company has determined it has provided all of its material obligations required to recognize revenue. As of December 31, 2015 and 2014, the Company has recorded deferred franchise fees of $473 and $205, respectively, relating to stores to be opened in future years. These amounts are included in deferred revenue as of December 31, 2015 and 2014.

The individual franchise agreements typically have a 10-year initial term, but provide the franchisee with an opportunity to enter into successive renewals subject to certain conditions.

Franchise agreements entered into prior to 2010 may include performance fees, which are fees earned by the Company upon each franchise store reaching a predetermined amount of total monthly membership billings. Performance fees are recognized when the related performance thresholds have been met.

Royalties

Royalties, which represent recurring fees paid by franchisees based on the franchisee-owned stores’ monthly membership billings, are recognized on a monthly basis over the term of the franchise agreement. As specified under certain franchise agreements, the Company recognizes additional royalty fees as the franchisee-owned stores attain contractual monthly membership billing threshold amounts. Beginning in 2010, for all new franchise agreements entered into, the Company began charging a fixed royalty percentage based upon gross membership billings.

Other fees

Online member join fees are paid to the Company by franchisees for processing new membership transactions when a new member signs up for a membership to a franchisee-owned store through the Company’s website.

 

Billing transaction fees are paid to the Company for the processing of franchisee membership dues and annual fees through the Company’s third-party hosted point-of-sale system.

Placement

The Company is generally responsible for assembly and placement of equipment it sells to franchisee-owned stores. Placements revenue is recognized upon completion and acceptance of the services at the franchise location.

Commission income

The Company recognizes commission income from its franchisees’ use of preferred vendor arrangements. Commissions are recognized when amounts have been earned and collectability from the vendor is reasonably assured.

Corporate-owned stores revenue

The following revenues are generated from stores owned and operated by the Company.

Membership dues revenue

Customers are offered multiple membership choices varying in length. Membership dues are earned and recognized over the membership term on a straight-line basis.

Enrollment fee revenue

Enrollment fees are charged to new members at the commencement of their membership. The Company recognizes enrollment fees ratably over the estimated duration of the membership life, which is generally two years.

Annual membership fee revenue

Annual membership fees are annual fees charged to members in addition to and in order to maintain low monthly membership dues. The Company recognizes annual membership fees ratably over the 12-month membership period.

Retail sales

The Company sells Planet Fitness branded apparel, food, beverages, and other accessories. The revenue for these items is recognized at the point of sale.

Equipment revenue

The Company sells and delivers equipment purchased from third-party equipment manufacturers to U.S. based franchisee-owned stores. Equipment revenue is recognized upon the equipment being delivered to and assembled at each store and accepted by the franchisee. Franchisees are charged for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment revenue and freight costs are recorded within cost of revenue. The Company recognizes revenue on a gross basis in these transactions as management has determined the Company to be the principal in these transactions. Management determined the Company to be the principal because the Company is the primary obligor in these transactions, the Company has latitude in establishing prices for the equipment sales to franchisees, the Company has supplier selection discretion and is involved in determination of product specifications, and the Company bears all credit risk associated with obligations to the equipment manufacturers.

Equipment deposits are recognized as a liability on the accompanying consolidated balance sheets until delivery, assembly (if required), and acceptance by the franchisee. As of December 31, 2015 and 2014, equipment deposits were $5,587 and $6,675, respectively.

Sales tax

All revenue amounts are recorded net of applicable sales tax.

(f) Deferred revenue

Deferred revenue represents cash received from franchisees for ADAs and franchise fees for which revenue recognition criteria has not yet been met and cash received from members for enrollment fees, membership dues and annual fees for the portion not yet earned based on the membership period.

(g) Cost of revenue

Cost of revenue consists of direct costs associated with equipment sales, including freight costs, direct costs related to the maintenance and support of the Company’s proprietary system-wide point-of-sale system, and the cost of retail merchandise sold in corporate-owned stores. Costs related to the point-of-sale system were $1,236, $3,385, and $1,107 for the years ended December 31, 2015, 2014 and 2013 respectively. Costs related to retail merchandise were immaterial in all periods presented. Rebates from equipment vendors where the Company has recognized the related equipment revenue and costs are recorded as a reduction to the cost of revenue.

(h) Store operations

Store operations consists of the direct costs related to operating corporate-owned stores, including our store management and staff, rent expense, utilities, supplies, maintenance, and local advertising.

(i) Selling, general and administrative

Selling, general and administrative expenses consist of costs associated with administrative and franchisee support functions related to our existing business as well as growth and development activities. These costs primarily consist of payroll, IT related, marketing, legal and accounting expenses. These expenses include costs related to placement services of $3,452, $2,743, and $2,245, for the years ended December 31, 2015, 2014 and 2013, respectively.

(j) Accounts and notes receivable

Accounts receivable is primarily comprised of amounts owed to the Company resulting from equipment, placement, and commission revenue. Notes receivable arise primarily from financing activities with franchisees. The Company evaluates its accounts and notes receivable on an ongoing basis and may establish an allowance for doubtful accounts based on collections and current credit conditions. Accounts are written off as uncollectible when it is determined that further collection efforts will be unsuccessful. Notes receivable are generally secured by all property, assets, and rights owned by the franchisee. Historically, the Company has not had a significant amount of write-offs.

(k) Leases and asset retirement obligations

The Company recognizes rent expense related to leased office and operating space on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, and is recorded as deferred rent in the Company’s consolidated balance sheets.

In accordance with ASC Topic 410, Asset Retirement and Environmental Obligations, the Company establishes assets and liabilities for the present value of estimated future costs to return certain leased facilities to their original condition. Such assets are depreciated on a straight-line basis over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs.

(l) Property and equipment

Property and equipment is recorded at cost and depreciated using the straight-line method over its related estimated useful life. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset, whichever is shorter. Upon sale or retirement, the asset cost and related accumulated depreciation are removed from the respective accounts, and any related gain or loss is reflected in the consolidated statements of operations. Ordinary maintenance and repair costs are expensed as incurred. The estimated useful lives of the Company’s fixed assets by class of asset are as follows:

 

      Years

Buildings and building improvements

    20–40

Computers and equipment

    3

Furniture and fixtures

    5

Leasehold improvements

    Useful life or term of lease whichever is shorter

Fitness equipment

    5–7

Vehicles

    5

 

(m) Advertising expenses

The Company expenses advertising costs as incurred. Advertising expenses, net of amounts reimbursed by franchisees, are included within selling, general and administrative expenses and totaled $9,349, $7,272, and $5,731 for the years ended December 31, 2015, 2014 and 2013, respectively. See Note 5 for discussion of the national advertising fund.

(n) Goodwill, long-lived assets, and other intangible assets

Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with ASC Topic 350, Intangibles—Goodwill and Other. In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; or (2) the intangible asset is separable. Intangibles are typically trade and brand names, customer relationships, noncompete agreements, reacquired franchise rights, and favorable or unfavorable leases. Transactions are evaluated to determine whether any gain or loss on reacquired franchise rights, based on their fair value, should be recognized separately from identified intangibles. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.

Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have an indefinite life are amortized over their estimated useful lives on either a straight-line or accelerated basis as deemed appropriate, and are reviewed for impairment when events or circumstances suggest that the assets may not be recoverable.

The Company performs its annual test for impairment of goodwill and indefinite lived intangible assets on December 31 of each year. For goodwill, the first step of the impairment test is to determine whether the carrying amount of a reporting unit exceeds the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, the Company would be required to perform a second step of the impairment test as this is an indication that the reporting unit’s goodwill may be impaired. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. Any impairment loss would be recognized in an amount equal to the excess of the carrying value of the goodwill over the implied fair value of the goodwill. The Company is also permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it need not perform the two-step impairment test.

For indefinite lived intangible assets, the impairment assessment consists of comparing the carrying value of the asset to its estimated fair value. To the extent that the carrying value exceeds the fair value of the asset, an impairment is recorded to reduce the carrying value to its fair value. The Company is also permitted to make a qualitative assessment of whether it is more likely than not an indefinite lived intangible asset’s fair value is less than its carrying value prior to applying the quantitative assessment. If based on the Company’s qualitative assessment it is not more likely than not that the carrying value of the asset is less than its fair value, then a quantitative assessment is not required.

The Company determined that no impairment charges were required during any periods presented.

The Company applies the provisions of ASC Topic 360, Property, Plant and Equipment, which requires that long-lived assets, including amortizable intangible assets, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment, then assets are required to be grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the undiscounted future net cash flows expected to be generated by the asset or asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no events or changes in circumstances that required the Company to test for impairment during any of the periods presented.

(o) Income taxes

The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the expected future tax consequences attributable to temporary differences between the carrying amount of the existing tax assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied in the years in which temporary differences are expected to be recovered or settled. The principal items giving rise to temporary differences are the use of accelerated depreciation and certain basis differences resulting from acquisitions and the recapitalization transactions. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

As a result of the recapitalization transactions, Planet Fitness, Inc. became the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including Planet Fitness, Inc. following the recapitalization transactions, on a pro rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings following the recapitalization transactions. The Company is also subject to taxes in foreign jurisdictions.

The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see Note 16).

During 2013 the Company changed its position with respect to taxes due on interest and dividends to the state of New Hampshire that had previously been paid by the members. This resulted in the Company making tax payments in 2013 totaling $4,392 for periods prior to November 7, 2012. This amount is included within other income (expense) for the year ended December 31, 2013 and is fully offset by amounts received from the members as reimbursement for the taxes paid, also recorded within other income (expense) for the year ended December 31, 2013. This position is not available for periods subsequent to November 7, 2012 and therefore taxes on interest and dividends due and payable in the periods after 2012 are paid by the members of Pla-Fit Holdings.

(p) Tax benefit arrangements

The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to the Continuing LLC Owners 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings. Also, pursuant to the exchange agreement, to the extent an exchange results in Pla-Fit Holdings, LLC incurring a current tax liability relating to the New Hampshire business profits tax, the Continuing LLC Owners have agreed that they will contribute to Pla-Fit Holdings, LLC an amount sufficient to pay such tax liability (up to 3.5% of the value received upon exchange). If and when the Company subsequently realizes a related tax benefit, Pla-Fit Holdings, LLC will distribute the amount of any such tax benefit to the relevant Continuing LLC Owner in respect of its contribution.

Based on current projections, the Company anticipates having sufficient taxable income to utilize these tax attributes and receive corresponding tax deductions in future periods. Accordingly, at the completion of the Reorganization Transactions and the IPO, the Company has recorded an initial liability of $142.0 million payable to the Direct TSG Investors and the Continuing LLC Owners under the tax benefit obligations, representing approximately 85% of the calculated tax savings based on the original basis adjustments the Company anticipates being able to utilize in future years. Changes in the projected liability resulting from these tax benefit arrangements may occur based on changes in anticipated future taxable income, changes in applicable tax rates or other changes in tax attributes that may occur and impact the expected future tax benefits to be received by the Company. Changes in the projected liability under these tax benefit arrangements will be recorded as a component of other income (expense) each period. The projection of future taxable income involves significant judgment. Actual taxable income may differ from estimates, which could significantly impact the liability under the tax benefit arrangements and the Company’s consolidated results of operations.

(q) Fair value

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 and December 31, 2014:

 

      Total fair
value at
December 31,
2015		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,147       $ —       $ 1,147       $ —   

 

  

 

      Total fair
value at
December 31,
2014		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,711       $ —       $ 1,711       $ —   

 

  

(r) Financial instruments

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying value of debt also approximates fair value as it is variable rate debt. The Company has determined that the determination of fair value of amounts due from related parties under long-term arrangements is impracticable given the related-party nature of these agreements.

(s) Derivative instruments and hedging activities

The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income, to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings.

The Company only enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

 

The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the cash flow hedge is de-designated because a forecasted transaction is not probable of occurring, or management determines to remove the designation of the cash flow hedge.

In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and recognizes immediately in earnings gains and losses that were accumulated in other comprehensive income related to the hedging relationship. See Note 10 for further information.

(t) Equity-based compensation

The Company has an equity-based compensation plan under which it receives services from employees as consideration for equity instruments of the Company. The compensation expense is determined based on the fair value of the award as of the grant date. Compensation expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. See Note 14 for further information.

(u) Guarantees

The Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Notes 3 and 17 for further discussion of such obligations guaranteed.

(v) Contingencies

The Company records estimated future losses related to contingencies when such amounts are probable and estimable. The Company includes estimated legal fees related to such contingencies as part of the accrual for estimated future losses.

(w) Reclassifications

Certain amounts have been reclassified to conform to current year presentation, including deferred financing costs, which were previously classified in other assets, net and are now classified as a direct reduction of long-term debt, see Note 2(w).

(x) Recent accounting pronouncements

The FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, in April 2015. This guidance requires reporting entities to present debt issuance costs as a direct deduction from the carrying amount of the related debt liability. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. A reporting entity must apply this guidance retrospectively to all prior periods presented in the financial statements. The Company has retrospectively adopted this guidance as of December 31, 2015 and accordingly has reclassified $7,294 of deferred financing costs from other assets to long-term debt on its consolidated balance sheet as of December 31, 2014.

 

The FASB issued ASU No. 2015-02, Income Statement—Consolidation, in February 2015. This guidance affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the guidance 1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, 2) eliminates the presumption that a general partner should consolidate a limited partnership, 3) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and 4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 for public companies. The Company is currently evaluating the impact, if any, the adoption of this guidance will have on its consolidated financial statements.

In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. This guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This guidance simplifies the presentation of deferred income taxes by requiring that deferred tax liabilities and assets all be classified as noncurrent in a classified statement of financial position. The guidance is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company has adopted this guidance as of December 31, 2015, with no impact to the previously reported amounts.

Variable interest entities
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Variable interest entities

(3) Variable interest entities

The carrying values of VIEs included in the consolidated financial statements as of March 31, 2016 and December 31, 2015 are as follows:

 

      March 31, 2016      December 31, 2015  
      Assets      Liabilities      Assets      Liabilities  

PF Melville

    $ 3,790       $ —       $ 3,728       $ —   

MMR

      3,025         —         2,953         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 6,815       $ —       $ 6,681       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

  

The Company also has variable interests in certain franchisees mainly through the guarantee of certain debt and lease agreements as well as financing provided by the Company and by certain related parties to franchisees. The Company’s maximum obligation, as a result of its guarantees of leases and debt, is approximately $1,730 and $1,871 as of March 31, 2016 and December 31, 2015, respectively.

The amount of the Company’s maximum obligation represents a loss that the Company could incur from the variability in credit exposure without consideration of possible recoveries through insurance or other means. In addition, the amount bears no relation to the ultimate settlement anticipated to be incurred from the Company’s involvement with these entities, which is estimated at $0.

Variable interest entities

(3) Variable interest entities

The carrying values of VIEs included in the consolidated financial statements as of December 31, 2015 and December 31, 2014 are as follows:

 

      December 31, 2015      December 31, 2014  
      Assets      Liabilities      Assets      Liabilities  

PF Melville

    $ 3,728       $ —       $ 3,479       $ —   

MMR

      2,953         —         2,750         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 6,681       $ —       $ 6,229       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

  

The Company also has variable interests in certain franchisees mainly through the guarantee of certain debt and lease agreements as well as financing provided by the Company and by certain related parties to franchisees. The Company’s maximum obligation, as a result of its guarantees of leases and debt, is approximately $1,871 and $2,896 as of December 31, 2015 and 2014, respectively.

The amount of the Company’s maximum obligation represents a loss that the Company could incur from the variability in credit exposure without consideration of possible recoveries through insurance or other means. In addition, the amount bears no relation to the ultimate settlement anticipated to be incurred from the Company’s involvement with these entities, which is estimated at $0.

Acquisition
Acquisition

(4) Acquisition

On March 31, 2014, the Company purchased certain assets from one of its franchisees, including eight franchisee-owned stores in New York, for consideration of $42,931, including a cash payment of $39,931 and a $3,000 discount to be applied to future equipment purchases. The $3,000 equipment discount was initially recorded as deferred revenue by the Company and is being recognized as equipment sales are made by the Company to the franchisee. In addition, as a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $1,293, which has been reflected in other operating costs in the statement of operations. The loss incurred reduced the net purchase price to $41,638. The Company financed the purchase through borrowings under its credit facility. The purchase consideration was allocated as follows:

 

      Amount  

Fixed assets

    $ 7,634   

Reacquired franchise rights

      8,950   

Membership relationships

      5,882   

Favorable leases, net

      700   

Other assets

      35   

Goodwill

      19,771   

Liabilities assumed, including deferred revenues

      (1,334 ) 
  

 

 

  
   $ 41,638   
  

 

 

  
National advertising fund
National advertising fund

(5) National advertising fund

On July 26, 2011, the Company established Planet Fitness NAF, LLC (“NAF”) for the creation and development of marketing, advertising, and related programs and materials for all Planet Fitness stores located in the United States and Puerto Rico. On behalf of the NAF, the Company collects 2% of gross monthly membership billings from franchisees, in accordance with the provisions of the franchise agreements. The Company also contributes 2% of monthly membership billings from stores owned by the Company to the NAF. The use of amounts received by NAF is restricted to advertising, product development, public relations, merchandising, and administrative expenses and programs to increase sales and further enhance the public reputation of the Planet Fitness brand. The Company consolidates and reports all assets and liabilities held by the NAF within the consolidated financial statements. Amounts received or receivable by NAF are reported as restricted assets and restricted liabilities within current assets and current liabilities on the consolidated balance sheets. The Company provides administrative services to NAF and charges NAF a fee for providing those services. These services include accounting services, information technology, data processing, product development, legal and administrative support, and other operating expenses, which amounted $1,340, $1,010 and $865 for the years ended December 31, 2015, 2014 and 2013, respectively. The fees paid to the Company by NAF are included in the consolidated statements of operations as a reduction in general and administrative expense, where the expense incurred by the Company was initially recorded.

Notes Receivable
Notes Receivable

(6) Notes Receivable

Prior to December 31, 2015, the Company had various notes receivable from franchisees to facilitate ongoing business. Notes receivable consisted of unpaid principal and accrued interest. There were two notes receivable as of December 31, 2014, with maturity dates ranging from July 1, 2015 to February 1, 2018, however, all notes receivable were settled in cash during 2015; as such, no amounts are outstanding as of December 31, 2015.

Property and equipment
Property and equipment

(7) Property and equipment

Property and equipment as of December 31, 2015 and 2014 consists of the following:

 

      December 31,
2015		     December 31,
2014		  

Land

    $ 910      $ 910   

Equipment

      27,391        22,137   

Leasehold improvements

      38,288        27,361   

Buildings and improvements

      5,107        5,119   

Furniture & fixtures

      3,030        2,309   

Other

      2,947        2,096   

Construction in progress

      1,991        5,375   
  

 

 

    

 

 

  
     79,664        65,307   

Accumulated Depreciation

      (23,525 )      (15,728 ) 
  

 

 

    

 

 

  

Total

    $ 56,139      $ 49,579   
  

 

 

    

 

 

  

 

   

 

 

    

 

 

  

The Company recorded depreciation expense of $11,088, $9,138, and $6,171 for the years ended December 31, 2015, 2014 and 2013, respectively.

Goodwill and intangible assets
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Goodwill and intangible assets

(4) Goodwill and intangible assets

A summary of goodwill and intangible assets at March 31, 2016 and December 31, 2015 is as follows:

 

March 31, 2016    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782         (61,469 )    $ 110,313   

Noncompete agreements

      5.0         14,500         (9,852 )      4,648   

Favorable leases

      7.5         2,935         (1,354 )      1,581   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (3,113 )      5,837   
     

 

 

     

 

 

    

 

 

  
        201,567         (79,188 )      122,379   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (79,188 )    $ 268,679   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  

 

  

 

December 31, 2015    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782       $ (57,741 )    $ 114,041   

Noncompete agreements

      5.0         14,500         (9,127 )      5,373   

Favorable leases

      7.5         2,935         (1,256 )      1,679   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (2,724 )      6,226   
     

 

 

     

 

 

    

 

 

  
        201,567         (74,248 )      127,319   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (74,248 )    $ 273,619   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  

 

  

The Company determined that no impairment charges were required during any periods presented.

Amortization expense related to the intangible assets totaled $4,940 and $5,383 for the three months ended March 31, 2016 and 2015, respectively. Included within these total amortization expense amounts are $99 and $113 related to amortization of favorable and unfavorable leases for the three months ended March 31, 2016 and 2015, respectively. Amortization of favorable and unfavorable leases is recorded within store operations as a component of rent expense in the consolidated statements of operations. The anticipated annual amortization expense to be recognized in future years as of March 31, 2016 is as follows:

 

      Amount  

Remainder of 2016

    $ 14,816   

2017

      18,215   

2018

      14,583   

2019

      14,215   

2020

      12,517   

Thereafter

      48,033   
  

 

 

  

Total

    $ 122,379   
  

 

 

  
Goodwill and intangible assets

(8) Goodwill and intangible assets

A summary of goodwill and intangible assets at December 31, 2015 and 2014 is as follows:

 

December 31, 2015    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782       $ (57,741 )    $ 114,041   

Noncompete agreements

      5.0         14,500         (9,127 )      5,373   

Favorable leases

      7.5         2,935         (1,256 )      1,679   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (2,724 )      6,226   
     

 

 

     

 

 

    

 

 

  
        201,567         (74,248 )      127,319   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (74,248 )    $ 273,619   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  

 

  

 

December 31, 2014    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782       $ (41,130 )    $ 130,652   

Noncompete agreements

      5.0         14,500         (6,229 )      8,271   

Favorable leases

      7.5         2,935         (779 )      2,156   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (1,167 )      7,783   
     

 

 

     

 

 

    

 

 

  
        201,567         (52,705 )      148,862   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (52,705 )    $ 295,162   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  

 

  

 

The changes in the carrying amount of goodwill are as follows:

 

      Franchise      Corporate-
owned stores		      Equipment      Total  

As of December 31, 2013

    $ 16,938       $ 47,606       $ 92,666       $ 157,210   

Acquisition of franchises

      —         19,771         —         19,771   
  

 

 

     

 

 

     

 

 

     

 

 

  

As of December 31, 2014

      16,938         67,377         92,666         176,981   

Additions

      —         —         —         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

As of December 31, 2015

    $ 16,938       $ 67,377       $ 92,666       $ 176,981   
  

 

 

     

 

 

     

 

 

     

 

 

  
                                     

The Company determined that no impairment charges were required during any periods presented.

Amortization expense related to the intangible assets totaled $21,543, $23,698, and $22,883 for the years ended December 31, 2015, 2014, and 2013, respectively. Included within these total amortization expense amounts are $473, $495, and $246 related to amortization of favorable and unfavorable leases for the years ended December 31, 2015, 2014, and 2013, respectively. Amortization of favorable and unfavorable leases is recorded within store operations as a component of rent expense in the consolidated statements of operations. The anticipated annual amortization expense to be recognized in future years as of December 31, 2015 is as follows:

 

      Amount  

2016

    $ 19,756   

2017

      18,215   

2018

      14,583   

2019

      14,215   

2020

      12,517   

Thereafter

      48,033   
  

 

 

  

Total

    $ 127,319   
  

 

 

  
Long-term debt
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Long-term debt

(5) Long-term debt

Long-term debt as of March 31, 2016 and December 31, 2015 consists of the following:

 

      March 31,
2016		     December 31,
2015		  

Term loan B requires quarterly installments plus interest through the term of the loan, maturing March 31, 2021. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.50% at March 31, 2016 and 4.75% at December 31, 2015)

    $ 491,000      $ 492,275   

Revolving credit line, requires interest only payments through the term of the loan, maturing March 31, 2019. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.25% at March 31, 2016 and December 31, 2015)

      —        —   
  

 

 

    

 

 

  

Total debt, excluding deferred financing costs

      491,000        492,275   

Deferred financing costs, net of accumulated amortization

      (7,025 )      (7,396 ) 
  

 

 

    

 

 

  

Total debt

      483,975        484,879   

Current portion of long-term debt and line of credit

      5,100        5,100   
  

 

 

    

 

 

  

Long-term debt, net of current portion

    $ 478,875      $ 479,779   
  

 

 

    

 

 

  

 

  

Future annual principal payments of long-term debt as of March 31, 2016 are as follows:

 

      Amount  

Remainder of 2016

    $ 3,825   

2017

      5,100   

2018

      5,100   

2019

      5,100   

2020

      5,100   

Thereafter

      466,775   
  

 

 

  

Total

    $ 491,000   
  

 

 

  
Long-term debt

(9) Long-term debt

Long-term debt as of December 31, 2015 and 2014 consists of the following:

 

      December 31,
2015		     December 31,
2014		  

Term loan B requires quarterly installments plus interest through the term of the loan, maturing March 31, 2021. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.75% at December 31, 2015 and 2014)

    $ 492,275      $ 387,075   

Revolving credit line, requires interest only payments through the term of the loan, maturing March 31, 2019. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.25% at December 31, 2015 and 2014)

      —        —   
  

 

 

    

 

 

  

Total debt, excluding deferred financing costs

      492,275        387,075   

Deferred financing costs, net of accumulated amortization

      (7,396 )      (7,294 ) 
  

 

 

    

 

 

  

Total debt

      484,879        379,781   

Current portion of long-term debt and line of credit

      5,100        3,900   
  

 

 

    

 

 

  

Long-term debt, net of current portion

    $ 479,779      $ 375,881   
  

 

 

    

 

 

  

 

  

On March 31, 2014, the Company entered into a five-year $430,000 credit facility with a consortium of banks and lenders to refinance its existing indebtedness, as well as to provide funds for working capital, capital expenditures, acquisitions, a $173,900 dividend and general corporate purposes. The facility consisted of a $390,000 Term Loan and a $40,000 Revolving Credit Facility. On March 31, 2015, the Company amended this credit facility to increase the Term Loan to $510,000 to fund a cash dividend of $140,000. The unused portion of the Revolving Credit Facility as of December 31, 2015 was $40,000. The Term Loan calls for quarterly principal installment payments of $1,275 through March 2021.

The credit facility requires the Company to meet certain financial covenants, which the Company was in compliance with as of December 31, 2015. The facility is secured by all of the Company’s assets, excluding the assets attributable to the consolidated VIEs (see Note 3).

Future annual principal payments of long-term debt as of December 31, 2015 are as follows:

 

      Amount  

2016

    $ 5,100   

2017

      5,100   

2018

      5,100   

2019

      5,100   

2020

      5,100   

Thereafter

      466,775   
  

 

 

  

Total

    $ 492,275   
  

 

 

  
Derivative instruments and hedging activities
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Derivative instruments and hedging activities

(6) Derivative instruments and hedging activities

The Company utilizes interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments.

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and, therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high-quality counterparties whose credit rating is higher than A1/A+ at the inception of the derivative transaction. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features.

Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company monitors interest rate risk attributable to both the Company’s outstanding or forecasted debt obligations as well as the Company’s offsetting hedge positions.

In September 2014 and September 2015, the Company entered into a series of interest rate caps. As of March 31, 2016, the Company had interest rate cap agreements with notional amounts of $224,000 outstanding that were entered into in order to hedge LIBOR greater than 1.5%.

The interest rate cap balances of $376 and $1,147 were recorded within other assets in the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively. These amounts have been measured at fair value and are considered to be a Level 2 fair value measurement. The Company recorded a reduction to the value of its interest rate caps of $583, net of tax of $113, within other comprehensive loss during the three months ended March 31, 2016.

As of March 31, 2016, the Company does not expect to reclassify any amounts included in accumulated other comprehensive income (loss) into earnings during the next 12 months. Transactions and events expected to occur over the next 12 months that will necessitate reclassifying these derivatives’ loss to earnings include the re-pricing of variable-rate debt.

Derivative instruments and hedging activities

(10) Derivative instruments and hedging activities

The Company utilizes interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments.

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and, therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high-quality counterparties whose credit rating is higher than A1/A+ at the inception of the derivative transaction. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features.

Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company monitors interest rate risk attributable to both the Company’s outstanding or forecasted debt obligations as well as the Company’s offsetting hedge positions.

During 2014, the Company utilized LIBOR-based interest rate swap agreements that were entered into to manage fluctuations in cash flows resulting from changes in the benchmark interest rate of LIBOR. It was determined on March 31, 2014 that the hedge was ineffective and expense of $92 was reclassified from other comprehensive income to interest expense. The interest rate swaps were all terminated by September 2014. The Company recorded a loss of $248 within interest expense in the consolidated statement of operations for the year ending December 31, 2014 related to these terminated swap agreements.

In September 2014, the Company entered into a series of LIBOR based interest rate cap agreements in exchange for premium payments of $2,373 to effectively manage interest rate risk above a certain threshold and mitigate exposure to changes in interest rates under the term loan. The interest rate caps entered into in September 2014 were for a total notional amount of $194,000. The term of the interest rate caps began on September 30, 2014 and ends on September 29, 2017. In September 2015, the Company entered into two additional caps for premium payments of $880, which were effective September 30, 2015 and end on September 30, 2018. The interest rate cap agreements are designed to cap the LIBOR interest rate into a fixed interest rate if the LIBOR goes above the set cap amounts of 1.5%. As of December 31, 2015, the Company had interest rate cap agreements with notional amounts of $238,000 outstanding.

Changes in the fair value of interest rate swaps and caps designated as hedging instruments that effectively offset the variability of cash flows associated with variable-rate, long-term debt obligations are reported in accumulated other comprehensive income. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings.

 

The interest rate cap balances of $1,147 and $1,711 were recorded within other assets in the consolidated balance sheets as of December 31, 2015 and 2014, respectively. These amounts have been measured at fair value and are considered to be a Level 2 fair value measurement. The Company recorded a reduction to the value of its interest rate caps of $1,388, net of tax of $28, within other comprehensive loss during the year ended December 31, 2015. The Company recorded a reduction to the interest rate cap of $662 within other comprehensive loss as of December 31, 2014.

As of December 31, 2015, the Company does not expect to reclassify any amounts included in accumulated other comprehensive income (loss) into earnings during the next 12 months. Transactions and events expected to occur over the next twelve months that will necessitate reclassifying these derivatives’ loss to earnings include the re-pricing of variable-rate debt.

Deferred revenue
Deferred revenue

(11) Deferred revenue

The summary set forth below represents the balances in deferred revenue as of December 31, 2015 and 2014:

 

      December 31,
2015		      December 31,
2014		  

Prepaid membership fees

    $ 5,134       $ 5,382   

Enrollment fees

      1,555         1,692   

Equipment discount

      2,968         2,689   

Annual membership fees

      6,132         5,696   

Area development and franchise fees

      10,944         8,420   
  

 

 

     

 

 

  

Total deferred revenue

      26,733         23,879   

Long-term portion of deferred revenue

      12,016         9,330   
  

 

 

     

 

 

  

Current portion of deferred revenue

    $ 14,717       $ 14,549   
  

 

 

     

 

 

  

 

  

Equipment deposits received in advance of delivery, placement and customer acceptance as of December 31, 2015 and 2014 were $5,587 and $6,675, respectively and are expected to be recognized as revenue in the next twelve months.

Related party transactions
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Related party transactions

(7) Related party transactions

Amounts due from related parties consist of:

 

      March 31,
2016		      December 31,
2015		  

Accounts receivable—related entities

    $ 47       $ 39   

Accounts receivable—stockholders/members

      958         4,901   
  

 

 

     

 

 

  

Due from related parties

    $ 1,005       $ 4,940   
  

 

 

     

 

 

  

 

  

Amounts due from stockholders/members as of March 31, 2016 and December 31, 2015 relate to reimbursements for certain taxes owed or paid by the Company.

 

Activity with entities considered to be related parties is summarized below:

 

      For the three months ended
March 31,		  
          2016          2015  

Franchise revenue

    $ 421       $ 262   

Equipment revenue

      593         55   
  

 

 

     

 

 

  

Total revenue from related parties

    $ 1,014       $ 317   
  

 

 

     

 

 

  

 

  

The Company paid management fees to TSG Consumer Partners, LLC (“TSG”) totaling $0 and $265 during the three months ended March 31, 2016 and 2015, respectively. In connection with the IPO, the management agreement with TSG was terminated.

Related party transactions

(12) Related party transactions

Amounts due from stockholders/members as of December 31, 2015 and 2014 relate to reimbursements for certain taxes owed or paid by the Company.

 

      December 31,
2015		      December 31,
2014		  

Accounts receivable—related entities

    $ 39       $ 11   

Accounts receivable—stockholders/members

      4,901         1,130   
  

 

 

     

 

 

  
     4,940         1,141   

Due from related parties, current portion

      4,940         1,141   
  

 

 

     

 

 

  

Due from related parties, net of current portion

    $ —       $ —   
  

 

 

     

 

 

  

 

  

 

Activity with entities considered to be related parties is summarized below.

 

      For the Year Ended December 31,  
              2015              2014              2013  

Franchise revenue

    $ 1,232       $ 733       $ 1,620   

Equipment revenue

      1,686         3,711         855   
  

 

 

     

 

 

     

 

 

  

Total revenue from related parties

    $ 2,918       $ 4,444       $ 2,475   
  

 

 

     

 

 

     

 

 

  

 

   

 

 

     

 

 

     

 

 

  

The Company paid management fees to TSG totaling $1,899, $1,211, and $1,136 during the years ended December 31, 2015, 2014 and 2013, respectively. In connection with the IPO, the Company paid a $1,000 termination fee related to the termination of its management agreement with TSG, which is included in the management fees paid for the year ended December 31, 2015. As of December 31, 2015, the Company had $140,191 payable to related parties pursuant to tax benefit arrangements, see Note 16.

Stockholder's equity
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Stockholder's equity

(8) Stockholder’s equity

The recapitalization transactions

We refer to the Merger, Reclassification and entry into the Exchange agreement, each as described below, as the “recapitalization transactions.” The Merger was effected pursuant to a merger agreement by and among the Company and Planet Fitness Holdings, L.P. (a predecessor entity to the Company that held indirect interests in Pla-Fit Holdings, LLC) and the recapitalization transactions were effected pursuant to a recapitalization agreement by and among the Company, Pla-Fit Holdings, existing holders (“Continuing LLC Owners”) of Holdings Units, and holders of Class A common stock issued to holders of interests in Planet Fitness Holdings L.P. (“Direct TSG Investors”).

Merger

Prior to the Merger, the Direct TSG Investors held interests in Planet Fitness Holdings, L.P. Planet Fitness Holdings, L.P. was formed in October 2014 and had no material assets, liabilities or operations, other than as a holding company owning indirect interests in Pla-Fit Holdings. The Direct TSG Investors consist of investment funds affiliated with TSG. Pursuant to a merger agreement dated June 22, 2015, Planet Fitness Holdings, L.P. merged with and into the Company, and the interests in Planet Fitness Holdings, L.P. held by the Direct TSG Investors were converted into 26,106,930 shares of Class A common stock of the Company. We refer to this as the “Merger.” All shares of Class A common stock have both voting and economic rights in Planet Fitness, Inc.

The Merger was effected on August 5, 2015, prior to the time our Class A common stock was registered under the Exchange Act and prior to the completion of the IPO.

Reclassification

The equity interests of Pla-Fit Holdings, LLC previously consisted of three different classes of limited liability company units (Class M, Class T and Class O). Prior to the completion of the IPO, the limited liability company agreement of Pla-Fit Holdings was amended and restated to, among other things, modify its capital structure to create a single new class of units, the Holdings Units. We refer to this capital structure modification as the “Reclassification.”

 

The Direct TSG Investors’ indirect interest in Pla-Fit Holdings was held through Planet Fitness Holdings, L.P. As a result, following the Merger, the Direct TSG Investors’ indirect interests in Pla-Fit Holdings are held through the Company. Therefore, the Holdings Units received in the Reclassification were allocated to: (1) the Continuing LLC Owners based on their existing interests in Pla-Fit Holdings; and (2) the Company to the extent of the Direct TSG Investors’ indirect interest in Pla-Fit Holdings. The number of Holdings Units allocated to the Company in the Reclassification was equal to the number of shares of Class A common stock that the Direct TSG Investors received in the Merger (on a one-for-one basis).

The Reclassification was effected on August 5, 2015, prior to the time our Class A common stock was registered under the Exchange Act and prior to the completion of the IPO.

Following the Merger and the Reclassification, the Company issued to Continuing LLC Owners 72,602,810 shares of Class B common stock, one share of Class B common stock for each Holdings Unit they held. The shares of Class B common stock have no rights to dividends or distributions, whether in cash or stock, but entitle the holder to one vote per share on matters presented to stockholders of the Company. The Continuing LLC Owners consist of investment funds affiliated with TSG and certain current and former employees and directors.

Pursuant to the LLC agreement that went into effect at the time of the Reclassification (“New LLC Agreement”), the Company was designated as the sole managing member of Pla-Fit Holdings. Accordingly, the Company has the right to determine when distributions will be made by Pla-Fit Holdings to its members and the amount of any such distributions (subject to the requirements with respect to the tax distributions described below). If the Company authorizes a distribution by Pla-Fit Holdings, the distribution will be made to the members of Pla-Fit Holdings, including the Company, pro rata in accordance with the percentages of their respective Holdings Units.

The holders of Holdings Units will incur U.S. federal, state and local income taxes on their allocable share of any taxable income of Pla-Fit Holdings (as calculated pursuant to the New LLC Agreement). Net profits and net losses of Pla-Fit Holdings will generally be allocated to its members pursuant to the New LLC Agreement pro rata in accordance with the percentages of their respective Holdings Units. The New LLC Agreement provides for cash distributions to the holders of Holdings Units for purposes of funding their tax obligations in respect of the income of Pla-Fit Holdings that is allocated to them, to the extent other distributions from Pla-Fit Holdings for the relevant year have been insufficient to cover such liability. Generally, these tax distributions are computed based on the estimated taxable income of Pla-Fit Holdings allocable to the holders of Holdings Units multiplied by an assumed, combined tax rate equal to the maximum rate applicable to an individual or corporation resident in San Francisco, California (taking into account the non-deductibility of certain expenses and the character of the Company’s income).

Exchange agreement

Following the Merger and the Reclassification, the Company and the Continuing LLC Owners entered into an exchange agreement under which the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. As a Continuing LLC Owner exchanges Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock, the number of Holdings Units held by the Company will be correspondingly increased as it acquires the exchanged Holdings Units and cancels a corresponding number of shares of Class B common stock.

Offering transactions

In connection with the completion of the IPO on August 11, 2015, in order to facilitate the disposition of equity interests in Pla-Fit Holdings held by Continuing LLC Owners affiliated with TSG, the Company used the net proceeds received to purchase issued and outstanding Holdings Units from these Continuing LLC Owners that they received in the Reclassification. In connection with the IPO, the Company purchased 10,491,055 issued and outstanding Holdings Units from these Continuing LLC Owners for an aggregate of $156,946. This is in addition to the 26,106,930 Holdings Units that the Company acquired in the Reclassification on a one-for-one basis in relation to the number of shares of Class A common stock issued to the Direct TSG Investors in the Merger. Accordingly, following the IPO, the Company holds 36,597,985 Holdings Units, which is equal to the number of shares of Class A common stock that were issued to the Direct TSG Investors and investors in the IPO. The Direct TSG Investors, who did not receive Holdings Units in the Reclassification but received shares of Class A common stock in the Merger, sold 5,033,945 shares of Class A common stock in the IPO as selling stockholders.

As a result of the recapitalization transactions and the offering transactions, upon completion of the IPO:

 

•  

the investors in the IPO collectively owned 15,525,000 shares of our Class A common, representing 15.7% of the voting power in the Company and, through the Company, 15.7% of the economic interest in Pla-Fit Holdings;
•  

the Direct TSG Investors own 21,072,985 shares of our Class A common stock, representing 21.4% of the voting power in the Company and, through the Company, 21.4% of the economic interest in Pla-Fit Holdings; and
•  

the Continuing LLC Owners collectively held 62,111,755 Holdings Units, representing 62.9% of the economic interest in Pla-Fit Holdings and 62,111,755 shares of our Class B common stock, representing 62.9% of the voting power in the Company.
Stockholder's equity

(13) Stockholder’s equity

The recapitalization transactions

The Company refers to the Merger, Reclassification and entry into the Exchange agreement, each as described below, as the “recapitalization transactions.” The Merger was effected pursuant to a merger agreement by and among the Company and Planet Fitness Holdings, L.P. (a predecessor entity to the Company) and the recapitalization transactions were effected pursuant to a recapitalization agreement by and among the Company, Pla-Fit Holdings, the Continuing LLC Owners and Direct TSG Investors.

Merger

Prior to the Merger, the Direct TSG Investors held interests in Planet Fitness Holdings, L.P., a predecessor entity to the Company that held indirect interests in Pla-Fit Holdings. Planet Fitness Holdings, L.P. was formed in October 2014 and had no material assets, liabilities or operations, other than as a holding company owning indirect interests in Pla-Fit Holdings. The Direct TSG Investors consist of investment funds affiliated with TSG. Pursuant to a merger agreement dated June 22, 2015, upon the pricing of the IPO, Planet Fitness Holdings, L.P. merged with and into the Company, and the interests in Planet Fitness Holdings, L.P. held by the Direct TSG Investors were converted into 26,106,930 shares of Class A common stock of the Company. The Company refers to this as the “Merger.” All shares of Class A common stock have both voting and economic rights in Planet Fitness, Inc.

The Merger was effected on August 5, 2015, prior to the time our Class A common stock was registered under the Exchange Act and prior to the completion of the IPO.

Reclassification

The equity interests of Pla-Fit Holdings previously consisted of three different classes of limited liability company units (Class M, Class T and Class O). Prior to the completion of the IPO, the limited liability company agreement of Pla-Fit Holdings was amended and restated to, among other things, modify its capital structure to create a single new class of units, the Holdings Units. The Company refers to this capital structure modification as the “Reclassification.”

 

The Direct TSG Investors’ indirect interest in Pla-Fit Holdings was held through Planet Fitness Holdings, L.P. As a result, following the Merger, in which Planet Fitness Holdings, L.P. merged with and into the Company, the Direct TSG Investors’ indirect interests in Pla-Fit Holdings are held through the Company. Therefore, the Holdings Units received in the Reclassification were allocated to: (1) the Continuing LLC Owners based on their existing interests in Pla-Fit Holdings; and (2) the Company to the extent of the Direct TSG Investors’ indirect interest in Pla-Fit Holdings. The number of Holdings Units allocated to the Company in the Reclassification was equal to the number of shares of Class A common stock that the Direct TSG Investors received in the Merger (on a one-for-one basis).

The Reclassification was effected on August 5, 2015, prior to the time our Class A common stock was registered under the Exchange Act and prior to the completion of the IPO.

Following the Merger and the Reclassification, the Company issued to Continuing LLC Owners 72,602,810 shares of Class B common stock, one share of Class B common stock for each Holdings Unit they held. The shares of Class B common stock have no rights to dividends or distributions, whether in cash or stock, but entitle the holder to one vote per share on matters presented to stockholders of the Company. The Continuing LLC Owners consist of investment funds affiliated with TSG and certain employees and directors.

Pursuant to the LLC agreement that went into effect at the time of the Reclassification (“New LLC Agreement”), the Company was designated as the sole managing member of Pla-Fit Holdings. Accordingly, the Company has the right to determine when distributions will be made by Pla-Fit Holdings to its members and the amount of any such distributions (subject to the requirements with respect to the tax distributions described below). If the Company authorizes a distribution by Pla-Fit Holdings, the distribution will be made to the members of Pla-Fit Holdings, including the Company, pro rata in accordance with the percentages of their respective Holdings Units.

The holders of Holdings Units will incur U.S. federal, state and local income taxes on their allocable share of any taxable income of Pla-Fit Holdings (as calculated pursuant to the New LLC Agreement). Net profits and net losses of Pla-Fit Holdings will generally be allocated to its members pursuant to the New LLC Agreement pro rata in accordance with the percentages of their respective Holdings Units. The New LLC Agreement provides for cash distributions to the holders of Holdings Units for purposes of funding their tax obligations in respect of the income of Pla-Fit Holdings that is allocated to them, to the extent other distributions from Pla-Fit Holdings for the relevant year have been insufficient to cover such liability. Generally, these tax distributions are computed based on the estimated taxable income of Pla-Fit Holdings allocable to the holders of Holdings Units multiplied by an assumed, combined tax rate equal to the maximum rate applicable to an individual or corporation resident in San Francisco, California (taking into account the non-deductibility of certain expenses and the character of the Company’s income).

Exchange agreement

Following the Merger and the Reclassification, the Company and the Continuing LLC Owners entered into an exchange agreement under which the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. As a Continuing LLC Owner exchanges Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock, the number of Holdings Units held by the Company will increase by a corresponding amount as it acquires the exchanged Holdings Units and cancels a corresponding number of shares of Class B common stock.

Offering transactions

In connection with the completion of the IPO on August 11, 2015, in order to facilitate the disposition of equity interests in Pla-Fit Holdings held by Continuing LLC Owners affiliated with TSG, the Company used the net proceeds received to purchase issued and outstanding Holdings Units from these Continuing LLC Owners that they received in the Reclassification. In connection with the IPO, the Company purchased 10,491,055 issued and outstanding Holdings Units from these Continuing LLC Owners for an aggregate of $156,946. This is in addition to the 26,106,930 Holdings Units that the Company acquired in the Reclassification on a one-for-one basis in relation to the number of shares of Class A common stock issued to the Direct TSG Investors in the Merger. Accordingly, following the IPO, the Company holds 36,597,985 Holdings Units, which is equal to the number of shares of Class A common stock that were issued to the Direct TSG Investors and investors in the IPO. The Direct TSG Investors, who did not receive Holdings Units in the Reclassification but received shares of Class A common stock in the Merger, sold 5,033,945 shares of Class A common stock in the IPO as selling stockholders. All expenses of the IPO, other than underwriter discounts and commissions, were borne by Pla-Fit Holdings or reimbursed by Pla-Fit Holdings to the Company and amounted to $7,697 for the year ended December 31, 2015. These amounts were recorded in selling, general, and administrative expense in the accompanying statements of operations and could not be capitalized and offset against the proceeds from the offering because the Company did not retain any of the proceeds from the IPO.

As a result of the recapitalization transactions and the offering transactions, upon completion of the IPO:

 

•  

the investors in the IPO collectively owned 15,525,000 shares of our Class A common, representing 15.7% of the voting power in the Company and, through the Company, 15.7% of the economic interest in Pla-Fit Holdings;
•  

the Direct TSG Investors own 21,072,985 shares of our Class A common stock, representing 21.4% of the voting power in the Company and, through the Company, 21.4% of the economic interest in Pla-Fit Holdings; and
•  

the Continuing LLC Owners collectively hold 62,111,755 Holdings Units, representing 62.9% of the economic interest in Pla-Fit Holdings and 62,111,755 shares of our Class B common stock, representing 62.9% of the voting power in the Company.
Equity-based compensation
Equity-based compensation

(14) Equity-based compensation

2013 Equity Incentive Plan

In 2013, the Company’s Board of Directors adopted the 2013 Equity Incentive Plan (the “2013 Plan”). Under the 2013 Plan, the Company has granted awards in the form of Class M Units to employees and directors of the Company and its subsidiaries. The Class M Units receive distributions (other than tax distributions) only upon a liquidity event, as defined, that exceeds a threshold equivalent to the fair value of the Company, as determined by the Company’s Board of Directors, at the grant date. Eighty percent of the awards vest over five years of continuous employment or service while the other twenty percent only vest in the event of an initial public offering of the Company’s common stock or that of its parent or one of its subsidiaries, subject to the holder of the Class M Units remaining employed or providing services on the date of such initial public offering. All awards include a repurchase option at the election of the Company for the vested portion upon termination of employment or service, and have a ten year contractual term. These awards are accounted for as equity at their fair value as of the grant date.

The fair value of each award was estimated on the date of grant using a Monte Carlo simulation model.

The weighted average assumptions for the grants are provided in the following table. Since the Company’s shares were not publicly traded, expected volatility was estimated based on the average historical volatility of similar entities with publicly traded shares. The term was based on the estimated time to a liquidity event. The risk-free rate for the expected term of the M Unit was is based on the U.S. Treasury yield curve at the date of grant.

Valuation assumptions:

 

      Year ended
December 31,		  
      2014      2013  

Expected term (years)

      1.70         3.70   

Expected volatility

      36.8%         39.4%   

Risk-free interest rate

      0.4%         0.8%   

Dividend yield

      —         —   

 

  

During the year ended December 31, 2015, the Company modified the vesting terms of 10.737 outstanding Class M Units such that those units are fully vested and eligible to receive distributions following a liquidity event. In connection with the IPO and related recapitalization transactions as described in Note 1, all of the outstanding Class M Units were converted into Holdings Units and Class B common shares of Planet Fitness, Inc. in accordance with the terms of the awards. The Company’s IPO constituted a qualifying event under the terms of the awards and as a result 4,238,338 Holdings Units and corresponding Class B Common shares were issued to the existing Class M Unit holders with a weighted-average grant date fair value of $1.52 per share. The Company recorded $4,731 of compensation expense in the year ended December 31, 2015 related to these awards. The amount of total unrecognized compensation cost related to all awards under this plan was $729 as of December 31, 2015, which is expected to be recognized over a weighted-average period of 2.4 years.

 

A summary of Class M Unit activity is presented below:

 

      Class M Units     Holdings Units      Weighted
average grant
date fair value		  

Outstanding at January 1, 2013

      —      $ —      

Units granted

      431.577        —      
  

 

 

    

 

 

     

Outstanding at December 31, 2013

      431.577        —      
  

 

 

    

 

 

     

Units granted

      121.051        —      

Units forfeited

      (47.368 )      —      
  

 

 

    

 

 

     

Outstanding at December 31, 2014

      505.260        —      
  

 

 

    

 

 

     

Units granted

      —        —      

Units forfeited

      (21.053 )      —      

Units converted upon IPO

      (484.207 )      4,238,338         1.52   
  

 

 

    

 

 

     

 

 

  

Outstanding at December 31, 2015

      —        4,238,338         1.52   
  

 

 

    

 

 

     

 

 

  

Vested or expected to vest at December 31, 2015

      —        4,238,338         1.52   
  

 

 

    

 

 

     

 

 

  

 

   

 

 

    

 

 

     

 

 

  

The weighted average grant-date fair value of the Class M Units vested during the years ended December 31, 2014 and 2013 was $10,047 and $10,656 per unit, respectively. During the years ended December 31, 2014 and 2013, 69.052 and 24.421 units vested, respectively, but were not yet exercisable due to the fact that exercisability was contingent on a liquidity event. No distributions were paid under these awards in 2013 or 2014 and no awards were forfeited in 2013.

2015 Omnibus Incentive Plan

Stock Options

In August 2015, the Company adopted the 2015 Omnibus Incentive Plan (the “2015 Plan”) under which the Company may grant options and other equity-based awards to purchase up to 7,896,800 shares to employees, directors and officers. In connection with the IPO, the Company granted options to purchase up to 106,030 shares to certain employees with an exercise price of $16.00 per share. Options to purchase an additional 10,660 shares were granted during the year ended December 31, 2015, with an exercise price of $17.50 per share. All stock options awarded vest annually, on a tranche by tranche basis, over a period of four years.

The fair value of stock option awards granted during the year ended December 31, 2015 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:

 

Expected term (years)(1)

      6.25   

Expected volatility(2)

      35.4%   

Risk-free interest rate(3)

      1.82%   

Dividend yield(4)

      —   

 

  

 

(1)   Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)   Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)   The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)   We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.

A summary of stock option activity for the year ended December 31, 2015:

 

      Stock Options     Weighted average
exercise price		      Weighted
average
remaining
contractual term
(years)		  

Outstanding at beginning of period

      —      $ —      

Granted

      116,690        16.14      

Exercised

      —        —      

Forfeited

      (8,420 )      16.00      
  

 

 

    

 

 

     

Outstanding at December 31, 2015

      108,270      $ 16.15         9.6   
  

 

 

    

 

 

     

 

 

  

Vested or expected to vest at December 31, 2015

      104,769      $ 16.15         9.6   
  

 

 

    

 

 

     

 

 

  

 

   

 

 

    

 

 

     

 

 

  

The weighted-average grant date fair value of stock options granted during the year ended December 31, 2015 was $6.14. During the year ended December 31, 2015, $131 was recorded to selling, general and administrative expense related to these stock options. As of December 31, 2015, there were 108,270 stock options outstanding none of which were exercisable. The aggregate intrinsic value of stock options outstanding as of December 31, 2015 was $0. As of December 31, 2015, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $514, which is expected to be recognized over a weighted-average period of 3.6 years.

Restricted stock units

During the year ended December 31, 2015, the Company granted 8,160 restricted Class A stock units (“RSUs”) to one member of its Board of Directors under the 2015 Plan. The RSUs granted vest in three equal annual installments beginning on first anniversary of the grant date, provided that the recipient continues to serve on the Board of Directors through the vesting dates.

The weighted-average grant date fair value of RSUs granted during the year ended December 31, 2015 was $18.38. During the year ended December 31, 2015, $26 was recorded to selling, general and administrative expense related to these RSUs. As of December 31, 2015, there were 8,160 RSUs outstanding none of which were exercisable. As of December 31, 2015, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures was $124, which is expected to be recognized over a weighted-average period of 2.7 years.

Earnings per share
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Earnings per share

(9) Earnings per share

Basic earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There were no shares of Class A or Class B common stock outstanding prior to August 6, 2015, therefore no earnings per share information has been presented for the three months ended March 31, 2015.

Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Planet Fitness, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Holdings Units, are exchangeable into shares of Class A common stock on a one-for-one basis.

The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A common stock:

 

Basic net income per share:    For the three months ended
March 31, 2016		  

Numerator

   

Net income

    $ 16,345   

Less: net income attributable to non-controlling interests

      12,977   
  

 

 

  

Net income attributable to Planet Fitness, Inc.

    $ 3,368   
  

 

 

  

Denominator

   

Weighted-average shares of Class A common stock outstanding—basic

      36,597,985   
  

 

 

  

Earnings per share of Class A common stock—basic & diluted

    $ 0.09   
  

 

 

  

 

  

Class B common stock was evaluated under the if-converted method for potential dilutive effects and were determined to be anti-dilutive. Stock options in the amount of 134,870 and 8,160 restricted stock units were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive.

Earnings per share

(15) Earnings per share

Basic earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. for the period from August 6, 2015 through December 31, 2015, the period following the recapitalization transactions and IPO, by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There were no shares of Class A or Class B common stock outstanding prior to August 6, 2015, therefore no earnings per share information has been presented for any period prior to that date.

Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Planet Fitness, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Holdings Units, are exchangeable into shares of Class A common stock on a one-for-one basis.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:

 

Basic net income per share:    August 6, 2015 through
December 31, 2015		  

Numerator

   

Net income

    $ 23,454   

Less: net income attributable to non-controlling interests

      19,348   
  

 

 

  

Net income attributable to Planet Fitness, Inc.

    $ 4,106   
  

 

 

  

Denominator

   

Weighted-average shares of Class A common stock outstanding—basic

      36,243,557   
  

 

 

  

Earnings per share of Class A common stock—basic

    $ 0.11   
  

 

 

  

 

  

Class B common stock was evaluated under the if-converted method for potential dilutive effects and were determined to be anti-dilutive. Stock options in the amount of 108,270 and restricted stock units in the amount of 8,160 were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive.

Income taxes
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Income taxes

(10) Income taxes

As a result of the recapitalization transactions, the Company became the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including the Company following the recapitalization transactions, on a pro rata basis. Planet Fitness Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings following the recapitalization transactions. The Company is also subject to taxes in foreign jurisdictions.

The Company incurs U.S. federal and state income taxes on its 37.1% share of income flowed through from Pla-Fit Holdings. Our effective tax rate on such income was approximately 39.4%. The provision for income taxes also reflects an effective state tax rate of 2.5% applied to non-controlling interests, representing the remaining 62.9% of income before taxes, excluding income from variable interest entities, related to Pla-Fit Holdings.

 

Net deferred tax assets of $115,523 and $117,358 as of March 31, 2016 and December 31, 2015, respectively, relate primarily to the tax effects of temporary differences in the book basis as compared to the tax basis of our investment in Pla-Fit Holdings as a result of the recapitalization transactions and IPO. The Company has net operating loss carryforwards related to its Canada operations of approximately $2,411, which begin to expire in 2034. It is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

As of March 31, 2016, the total liability related to uncertain tax positions is $300. The Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in income tax expense. Interest and penalties for the three months ended March 31, 2016 were not material.

Tax benefit arrangements

The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to the Continuing LLC Owners 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings. Also, pursuant to the exchange agreement (see Note 8), to the extent an exchange results in Pla-Fit Holdings, LLC incurring a current tax liability relating to the New Hampshire business profits tax, the Continuing LLC Owners have agreed that they will contribute to Pla-Fit Holdings, LLC an amount sufficient to pay such tax liability (up to 3.5% of the value received upon exchange). If and when the Company subsequently realizes a related tax benefit, Pla-Fit Holdings, LLC will distribute the amount of any such tax benefit to the relevant Continuing LLC Owner in respect of its contribution. As of March 31, 2016, the Company has a liability of $138,078 related to its projected obligations under the tax benefit arrangements. Projected future payments under the tax benefit arrangements are as follows:

 

      Amount  

Remainder of 2016

    $ 906   

2017

      7,389   

2018

      7,336   

2019

      7,389   

2020

      7,585   

Thereafter

      107,473   
  

 

 

  

Total

    $ 138,078   
  

 

 

  
Income taxes

(16) Income taxes

Income before the provision for income taxes as shown in the accompanying consolidated statements of operations is as follows:

 

      Year Ended December 31,  
      2015     2014     2013  

Domestic

    $ 48,716      $ 39,534      $ 26,432   

Foreign

      (1,438 )      (1,056 )      —   
  

 

 

    

 

 

    

 

 

  

Total current tax expense

      47,278        38,478        26,432   
  

 

 

    

 

 

    

 

 

  

 

   

 

 

    

 

 

    

 

 

  

The provision (benefit) for income taxes consists of the following:

 

      Year Ended December 31,  
      2015     2014     2013  

Current:

       

Federal

    $ 686      $ —      $ —   

State

      2,188        1,078        2,063   

Foreign

      139        168        —   
  

 

 

    

 

 

    

 

 

  

Total current tax expense

      3,013        1,246        2,063   
  

 

 

    

 

 

    

 

 

  

Deferred:

       

Federal

      5,636        —        —   

State

      935        217        (1,430 ) 

Foreign

      (436 )      (280 )      —   
  

 

 

    

 

 

    

 

 

  

Total deferred tax (benefit) expense

      6,135        (63 )      (1,430 ) 
  

 

 

    

 

 

    

 

 

  

Provision for income taxes

    $ 9,148      $ 1,183      $ 633   
  

 

 

    

 

 

    

 

 

  

 

   

 

 

    

 

 

    

 

 

  

As a result of the recapitalization transactions, the Company became the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including the Company following the recapitalization transactions, on a pro rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings following the recapitalization transactions. The Company is also subject to taxes in foreign jurisdictions.

 

A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:

 

      Year Ended
December 31,
2015		  

U.S. statutory tax rate

      35.0%   

State and local taxes, net of federal benefit

      6.2%   

Rate change on deferred tax asset from recapitalization

      6.9%   

Tax benefit arrangement liability adjustment

      (2.1)%   

Foreign tax rate differential

      0.3%   

Withholding taxes and other

      0.2%   

Income attributable to non-controlling interests

      (27.1)%   
  

 

 

  

Effective tax rate

      19.4%   
  

 

 

  

 

  

The Company incurs U.S. federal and state income taxes on its 37.1% share of income flowed through from Pla-Fit Holdings. Our effective tax rate on such income was approximately 39.4%. The provision for income taxes also reflects an effective state tax rate of 2.5% applied to non-controlling interests, representing the remaining 62.9% of income before taxes, excluding income from variable interest entities, related to Pla-Fit Holdings.

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the accompanying consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. Details of the Company’s deferred tax assets and liabilities are summarized as follows:

 

      Year Ended
December 31,		  
              2015             2014  

Deferred tax assets:

     

Accrued expense and reserves

    $ 353      $ 75   

Deferred revenue

      1,276        182   

Goodwill and intangible assets

      113,460        —   

Net operating loss

      716        280   

Other

      2,841        85   
  

 

 

    

 

 

  

Deferred tax assets

    $ 118,646      $ 622   
  

 

 

    

 

 

  

Deferred tax liabilities:

     

Prepaid expenses

      (674 )      (94 ) 

Goodwill and intangible assets

      —        (717 ) 

Property and equipment

      (614 )      (154 ) 
  

 

 

    

 

 

  

Total deferred tax liabilities

    $ (1,288 )    $ (965 ) 
  

 

 

    

 

 

  

Total deferred tax assets and liabilities

    $ 117,358      $ (343 ) 
  

 

 

    

 

 

  

 

  

 

The Company has net operating loss carryforwards related to its Canada operations of approximately $716, which begin to expire in 2034. It is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

As of December 31, 2015 and 2014, the total liability related to uncertain tax positions is $300. The amount of unrecognized tax benefit, if recognized, would reduce income tax expense by $300. The Company does not expect the amount of unrecognized tax benefits to change materially in the next twelve months. The Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in income tax expense. Interest and penalties for the year ended December 31, 2015 were not material.

Tax benefit arrangements

The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to the Continuing LLC Owners 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings. Also, pursuant to the exchange agreement (see Note 13), to the extent an exchange results in Pla-Fit Holdings, LLC incurring a current tax liability relating to the New Hampshire business profits tax, the Continuing LLC Owners have agreed that they will contribute to Pla-Fit Holdings, LLC an amount sufficient to pay such tax liability (up to 3.5% of the value received upon exchange). If and when the Company subsequently realizes a related tax benefit, Pla-Fit Holdings, LLC will distribute the amount of any such tax benefit to the relevant Continuing LLC Owner in respect of its contribution. The Company recorded other income of $2,549 in the year ended December 31, 2015 reflecting a reduction in the tax benefit obligation attributable to a reduction in the expected related tax benefits. The tax benefit obligation was $140,191 as of December 31, 2015.

Projected future payments under the tax benefit arrangements are as follows:

 

      Amount  

2016

    $ 3,019   

2017

      7,125   

2018

      7,072   

2019

      7,125   

2020

      7,321   

Thereafter

      108,529   
  

 

 

  

Total

    $ 140,191   
  

 

 

  
Commitments and contingencies
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Commitments and contingencies

(11) Commitments and contingencies

From time to time, and in the ordinary course of business, the Company is subject to various claims, charges, and litigation, such as employment-related claims and slip and fall cases. The Company is not currently aware of any legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position or result of operations.

Commitments and contingencies

(17) Commitments and contingencies

(a) Operating lease commitments

The Company rents equipment, office, and warehouse space at various locations in the United States and Canada under noncancelable operating leases. Rental expense was $18,186, $16,980, and $13,830 for the years ended December 31, 2015, 2014 and 2013, respectively. Approximate annual future commitments under noncancelable operating leases as of December 31, 2015 are as follows:

 

      Amount  

2016

    $ 13,272   

2017

      12,700   

2018

      11,738   

2019

      10,325   

2020

      9,245   

Thereafter

      44,802   
  

 

 

  

Total

    $ 102,082   
  

 

 

  

 

  

(b) Legal matters

From time to time, and in the ordinary course of business, the Company is subject to various claims, charges, and litigation, such as employment-related claims and slip and fall cases. The Company is not currently aware of any legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position or result of operations.

(c) Purchase commitments

As of December 31, 2015, the Company had advertising purchase commitments of approximately $15,530, including commitments made by the NAF. In addition, the Company had open purchase orders of approximately $14,361 primarily related to equipment to be sold to franchisees.

(d) Guarantees

The Company has guaranteed certain leases and debt agreements of entities that were previously related through common ownership. These guarantees relate to leases for operating space, equipment, and other operating costs of franchises operated by the related entities. The Company’s maximum obligation, as a result of its guarantees of leases and debt, is approximately $1,871 and $2,896 as of December 31, 2015 and 2014, respectively, and would only require payment upon default by the primary obligor. The Company has determined the fair value of these guarantees at inception is not material, and as of December 31, 2015 and 2014, no accrual has been recorded for the Company’s potential obligation under its guaranty arrangement.

(e) Performance incentive plan

During 2013, the Company adopted the 2013 Performance Incentive Plan, which called for pre-determined bonuses to be paid to employees of the Company upon a future liquidity event of the Company, including an initial public offering that exceeds a predetermined threshold. In connection with the IPO, the Company paid bonuses and recorded expense of $1,688 related to this plan, which are included in selling, general and administrative expense in the accompanying statement of operations.

Retirement Plan
Retirement Plan

(18) Retirement Plan

The Company maintains a 401(k) deferred tax savings plan (the Plan) for eligible employees. The Plan provides for the Company to make an employer matching contribution currently equal to 100% of employee deferrals up to a maximum of 4% of each eligible participating employees’ wages. Total employer matching contributions expensed in the consolidated statements of operations were approximately $384, $211, and $214 for the years ended December 31, 2015, 2014, and 2013, respectively.

Segments
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Segments

(12) Segments

The Company has three reportable segments: (i) Franchise; (ii) Corporate-owned stores; and (iii) Equipment.

The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments.

The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, Canada and the Dominican Republic. The Corporate-owned stores segment includes operations with respect to all Corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to franchisee-owned stores.

The accounting policies of the reportable segments are the same as those described in Note 2. The Company evaluates the performance of its segments and allocates resources to them based on revenue and earnings before interest, taxes, depreciation, and amortization, referred to as Segment EBITDA. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues.

The tables below summarize the financial information for the Company’s reportable segments for the three months ended March 31, 2016 and 2015. The “Corporate and other” category, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.

 

      Three months ended March 31,  
              2016              2015  

Revenue

      

Franchise segment revenue—U.S.

    $ 27,230       $ 21,757   

Franchise segment revenue—International

      447         —   
  

 

 

     

 

 

  

Franchise segment total

      27,677         21,757   

Corporate-owned stores—U.S.

      24,698         23,270   

Corporate-owned stores—International

      999         276   
  

 

 

     

 

 

  

Corporate-owned stores total

      25,697         23,546   

Equipment segment—U.S.

      29,969         31,619   
  

 

 

     

 

 

  

Equipment segment total

      29,969         31,619   
  

 

 

     

 

 

  

Total revenue

    $ 83,343       $ 76,922   
  

 

 

     

 

 

  

 

  

 

Franchise segment revenue includes franchise revenue and commission income.

Franchise revenue includes revenue generated from placement services of $2,075 and $1,974 for the three months ended March 31, 2016 and 2015, respectively.

 

      Three months ended March 31,  
              2016             2015  

Segment EBITDA

     

Franchise

    $ 23,813      $ 13,578   

Corporate-owned stores

      10,162        7,798   

Equipment

      6,318        6,763   

Corporate and other

      (6,587 )      (6,372 ) 
  

 

 

    

 

 

  

Total Segment EBITDA

    $ 33,706      $ 21,767   
  

 

 

    

 

 

  

 

  

The following table reconciles total Segment EBITDA to income before taxes:

 

      Three months ended March 31,  
              2016             2015  

Total Segment EBITDA

    $ 33,706      $ 21,767   

Less:

     

Depreciation and amortization

      7,703        8,201   

Other expense

      393        (736 ) 
  

 

 

    

 

 

  

Income from operations

      25,610        14,302   

Interest expense, net

      (6,367 )      (4,756 ) 

Other expense

      393        (736 ) 
  

 

 

    

 

 

  

Income before income taxes

    $ 19,636      $ 8,810   
  

 

 

    

 

 

  

 

  

The following table summarizes the Company’s assets by reportable segment:

 

      March 31,
2016		      December 31,
2015		  

Franchise

    $ 214,464       $ 206,997   

Corporate-owned stores

      151,470         151,620   

Equipment

      193,261         208,168   

Unallocated

      126,471         132,392   
  

 

 

     

 

 

  

Total consolidated assets

    $ 685,666       $ 699,177   
  

 

 

     

 

 

  

 

  

The table above includes $3,239 and $3,149 of long-lived assets located in the Company’s corporate-owned stores in Canada as of March 31, 2016 and December 31, 2015, respectively. All other assets are located in the U.S.

 

The following table summarizes the Company’s goodwill by reportable segment:

 

      March 31,
2016		      December 31,
2015		  

Franchise

    $ 16,938       $ 16,938   

Corporate-owned stores

      67,377         67,377   

Equipment

      92,666         92,666   
  

 

 

     

 

 

  

Consolidated goodwill

    $ 176,981       $ 176,981   
  

 

 

     

 

 

  
Segments

(19) Segments

The Company has three reportable segments: (i) Franchise; (ii) Corporate-owned stores; and (iii) Equipment.

The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments.

The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, Canada, and Dominican Republic. The Corporate-owned stores segment includes operations with respect to all Corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to franchisee-owned stores.

The accounting policies of the reportable segments are the same as those described in Note 2. The Company evaluates the performance of its segments and allocates resources to them based on revenue and earnings before interest, taxes, depreciation, and amortization, referred to as Segment EBITDA. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues.

The tables below summarize the financial information for the Company’s reportable segments for the years ended December 31, 2015, 2014 and 2013. The “Corporate and other” column, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.

 

      Year Ended December 31,  
              2015              2014              2013  

Revenue

         

Franchise segment revenue—U.S.

    $ 87,299       $ 71,806       $ 44,157   

Franchise segment revenue—International

      786         —         —   
  

 

 

     

 

 

     

 

 

  

Franchise segment total

      88,085         71,806         44,157   

Corporate-owned stores segment—U.S.

      95,459         85,022         67,364   

Corporate-owned stores segment—International

      2,931         19         —   
  

 

 

     

 

 

     

 

 

  

Corporate-owned stores segment total

      98,390         85,041         67,364   

Equipment segment—U.S.

      144,062         122,930         99,488   
  

 

 

     

 

 

     

 

 

  

Equipment segment total

      144,062         122,930         99,488   
  

 

 

     

 

 

     

 

 

  

Total revenue

    $ 330,537       $ 279,777       $ 211,009   
  

 

 

     

 

 

     

 

 

  

 

  

 

Franchise segment revenue includes franchise revenue and commission income.

Franchise revenue includes revenue generated from placement services of $9,806, $8,450, and $6,315 for the years ended December 31, 2015, 2014 and 2013, respectively.

 

      Year Ended December 31,  
      2015     2014     2013  

Segment EBITDA

       

Franchise

    $ 66,030      $ 53,109      $ 30,123   

Corporate-owned stores

      36,070        31,705        21,742   

Equipment

      31,936        26,447        19,791   

Corporate and other

      (30,051 )      (18,642 )      (7,504 ) 
  

 

 

    

 

 

    

 

 

  

Total Segment EBITDA

    $ 103,985      $ 92,619      $ 64,152   
  

 

 

    

 

 

    

 

 

  

 

  

The following table reconciles total Segment EBITDA to income before taxes:

 

      Year Ended December 31,  
      2015     2014     2013  

Total Segment EBITDA

    $ 103,985      $ 92,619      $ 64,152   

Less:

       

Depreciation and amortization

      32,158        32,341        28,808   

Other expense

      (275 )      (1,261 )      (694 ) 
  

 

 

    

 

 

    

 

 

  

Income from operations

      72,102        61,539        36,038   

Interest expense, net

      (24,549 )      (21,800 )      (8,912 ) 

Other expense

      (275 )      (1,261 )      (694 ) 
  

 

 

    

 

 

    

 

 

  

Income before income taxes

    $ 47,278      $ 38,478      $ 26,432   
  

 

 

    

 

 

    

 

 

  

 

  

The following table summarizes the Company’s assets by reportable segment:

 

     

December 31,

2015

     

December 31,

2014

  

Franchise

    $ 206,997       $ 216,985   

Corporate-owned stores

      151,620         157,868   

Equipment

      208,168         220,367   

Unallocated

      132,392         6,762   
  

 

 

     

 

 

  

Total consolidated assets

    $ 699,177       $ 601,982   
  

 

 

     

 

 

  

 

  

The table above includes $3,149 and $2,011 of long-lived assets located in the Company’s international corporate-owned stores as of December 31, 2015 and 2014, respectively. Assets by segment as of December 31, 2014 has been adjusted to be consistent with the Company’s current presentation of certain intercompany amounts by segment.

 

The following table summarizes the Company’s goodwill by reportable segment:

 

      December 31,
2015		      December 31,
2014		  

Franchise

    $ 16,938       $ 16,938   

Corporate-owned stores

      67,377         67,377   

Equipment

      92,666         92,666   
  

 

 

     

 

 

  

Total consolidated goodwill

    $ 176,981       $ 176,981   
  

 

 

     

 

 

  
Corporate-owned and franchisee-owned stores
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Corporate-owned and franchisee-owned stores

(13) Corporate-owned and franchisee-owned stores

The following table shows changes in our corporate-owned and franchisee-owned stores for the three months ended March 31, 2016 and 2015:

 

      For the three months
ended March 31,		  
              2016             2015  

Franchisee-owned stores:

     

Stores operated at beginning of period

      1,066        863   

New stores opened

      48        59   

Stores debranded or consolidated(1)

      (1 )      (3 ) 
  

 

 

    

 

 

  

Stores operated at end of period

      1,113        919   
  

 

 

    

 

 

  

Corporate-owned stores:

     

Stores operated at beginning of period

      58        55   

New stores opened

      —        2   
  

 

 

    

 

 

  

Stores operated at end of period

      58        57   
  

 

 

    

 

 

  

Total stores:

     

Stores operated at beginning of period

      1,124        918   

New stores opened

      48        61   

Stores debranded or consolidated(1)

      (1 )      (3 ) 
  

 

 

    

 

 

  

Stores operated at end of period

      1,171        976   
  

 

 

    

 

 

  

 

  

 

(1)   The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity, with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
Corporate-owned and franchisee-owned stores

(20) Corporate-owned and franchisee-owned stores

The following table shows changes in our corporate-owned and franchisee-owned stores for the years ended December 31, 2015, 2014 and 2013:

 

      Year Ended December 31,  
          2015         2014         2013  

Franchisee-owned stores:

       

Stores operated at beginning of period

      863        704        562   

New stores opened

      206        169        148   

Stores debranded, sold or consolidated(1)

      (3 )      (10 )      (6 ) 
  

 

 

    

 

 

    

 

 

  

Stores operated at end of period

      1,066        863        704   
  

 

 

    

 

 

    

 

 

  

Corporate-owned stores:

       

Stores operated at beginning of period

      55        45        44   

New stores opened

      3        2        1   

Stores acquired from franchisees

      —        8        —   
  

 

 

    

 

 

    

 

 

  

Stores operated at end of period

      58        55        45   
  

 

 

    

 

 

    

 

 

  

Total stores:

       

Stores operated at beginning of period

      918        749        606   

New stores opened

      209        171        149   

Stores debranded, sold or consolidated(1)

      (3 )      (2 )      (6 ) 
  

 

 

    

 

 

    

 

 

  

Stores operated at end of period

      1,124        918        749   
  

 

 

    

 

 

    

 

 

  

 

  

 

(1)   The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated due to non-compliance with brand standards in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
Quarterly financial data (unaudited)
Quarterly financial data (unaudited)

(21) Quarterly financial data (unaudited)

 

      For the quarter ended  
      March 31,
2015		      June 30,
2015		      September 30,
2015		      December 31,
2015		  

Total revenue

    $ 76,923       $ 78,952       $ 68,817       $ 105,845   

Income from operations

      14,304         18,667         10,338         28,793   

Net income

      8,541         11,612         737         17,240   

 

  

 

Earnings per share(1):    August 6 through
September 30,
2015		      For the quarter
ended December 31,
2015		  

Class A—Basic

    $ 0.05       $ 0.06   

Class A—Diluted

    $ 0.04       $ 0.06   

 

  

 

      For the quarter ended  
      March 31,
2014		      June 30,
2014		      September 30,
2014		      December 31,
2014		  

Total revenue

    $ 57,594       $ 62,697       $ 63,467       $ 96,019   

Income from operations

      13,539         14,706         13,956         19,338   

Net income

      6,259         8,950         8,303         13,783   

 

  

 

(1)   Represents earnings per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the periods from August 6, 2015 through September 30, 2015 and the quarter ended December 31, 2015, the periods following the recapitalization transactions and IPO (see Note 15).
Pro forma financial information (Pro Forma [Member])
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Pro forma financial information

(15) Pro forma financial information

The unaudited pro forma financial information reflects the effects of the recapitalization transactions and the IPO on the allocation of pro forma net income between noncontrolling interests and Planet Fitness, Inc. for the quarter ended March 31, 2015. After the recapitalization transactions and the IPO, Planet Fitness, Inc. held a 37.1% economic ownership in Pla-Fit Holdings, LLC, and as such, 62.9% of pro forma net income is attributable to the noncontrolling interests.

The unaudited pro forma financial information also reflects an adjustment to the provision for income taxes to reflect an effective tax rate of 39.4%, applied to the 37.1% portion of income before taxes, excluding income from variable interest entities, that represents the economic interest in Pla-Fit Holdings, LLC held by Planet Fitness Inc. upon completion of recapitalization transactions and the IPO. The unaudited pro forma financial information also reflects an effective tax rate of 2.5% applied to noncontrolling interests representing the remaining 62.9% portion of income before taxes, excluding income from variable interest entities, related to Pla-Fit Holdings, LLC. The sum of these amounts represents total pro forma provision for income taxes of $1,190 for the quarter ended March 31, 2015.

The unaudited pro forma net income per share has been prepared using pro forma net income, as set forth above, which reflects the pro forma effects on provision for income taxes and the allocation of pro forma net income between noncontrolling interests and Planet Fitness, Inc., resulting from the recapitalization transactions and the IPO divided by pro forma weighted average shares outstanding, which includes Class A common stock of Planet Fitness, Inc. outstanding after the recapitalization transactions and the IPO.

 

     

Quarter ended
March 31,

2015

  

Pro forma net income attributable to Planet Fitness, Inc.

    $                   1,415   
  

 

 

  

Pro forma weighted average shares of Class A common stock—basic and diluted

      36,598   
  

 

 

  

Pro forma net income per share—basic and diluted

    $ 0.04   

 

  
Pro forma financial information

(22) Pro forma financial information (unaudited)

The unaudited pro forma financial information reflects the effects of the recapitalization transactions and the IPO on the allocation of pro forma net income between noncontrolling interests and Planet Fitness, Inc. for the year ended December 31, 2015. After the recapitalization transactions and the IPO, Planet Fitness Inc. held a 37.1% economic ownership in Pla-Fit Holdings, LLC, and as such, 62.9% of pro forma net income is attributable to the noncontrolling interests.

The unaudited pro forma financial information also reflects an adjustment to the provision for income taxes to reflect an effective tax rate of 39.4%, applied to the 37.1% portion of income before taxes, excluding income from variable interest entities, that represents the economic interest in Pla-Fit Holdings, LLC held by Planet Fitness Inc. upon completion of recapitalization transactions and the IPO. The unaudited pro forma financial information also reflects an effective tax rate of 2.5% applied to noncontrolling interests representing the remaining 62.9% portion of income before taxes, excluding income from variable interest entities, related to Pla-Fit Holdings, LLC. The sum of these amounts represents total pro forma provision for income taxes of $10,036 for the year ended December 31, 2015.

 

The unaudited pro forma net income per share has been prepared using pro forma net income, as set forth above, which reflects the pro forma effects on provision for income taxes and the allocation of pro forma net income between noncontrolling interests and Planet Fitness, Inc., resulting from the recapitalization transactions and the IPO divided by pro forma weighted average shares outstanding which includes Class A common stock of Planet Fitness, Inc. outstanding after the recapitalization transactions and the IPO.

 

     

Year ended
December 31,

2015

  

Pro forma net income attributable to Planet Fitness, Inc.

    $                   6,405   
  

 

 

  

Pro forma weighted average shares of Class A common stock—basic and diluted

      36,598   
  

 

 

  

Pro forma net income per share—basic and diluted

    $ 0.17   

 

  
Subsequent events
Subsequent events

(14) Subsequent events

On May 10, 2016 the Company announced that its Board of Directors had authorized a stock buyback program to repurchase up to $20,000 of the Company’s Class A common shares from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares that may be repurchased will be determined by the Company’s management based on its evaluation of market conditions, such as current stock price, and other factors. The Company may elect to implement a 10b5-1 repurchase program, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The buyback program does not have a fixed expiration date but may be suspended or discontinued at any time. The buyback program will be funded using the Company’s existing working capital.

Summary of significant accounting policies (Policies)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Accounting Policies [Abstract]
 
 
Basis of presentation and consolidation
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Use of estimates
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Concentrations
 
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Cash and cash equivalents
 
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Revenue recognition
 
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Deferred revenue
 
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Cost of revenue
 
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Store operations
 
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Selling, general and administrative
 
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Accounts and notes receivable
 
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Leases and asset retirement obligations
 
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Property and equipment
 
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Advertising expenses
 
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Goodwill, long-lived assets, and other intangible assets
 
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Income taxes
 
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Tax benefit arrangements
 
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Fair Value
Text Block 
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Financial instruments
 
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Derivative instruments and hedging activities
 
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Equity-based compensation
 
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Guarantees
 
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Contingencies
 
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Reclassifications
 
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Recent accounting pronouncements
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Basis of presentation and consolidation 

(a) Basis of presentation and consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements as of and for the three months ended March 31, 2016 are unaudited. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “Annual Report”) filed with the SEC on March 4, 2016. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.

As discussed in Note 1, as a result of the recapitalization transactions, Planet Fitness, Inc. consolidates Pla-Fit Holdings and Pla-Fit Holdings is considered to be the predecessor to Planet Fitness, Inc. for accounting and reporting purposes. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.

The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”) and PF Melville LLC (“PF Melville”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs.

Basis of presentation and consolidation 

(a) Basis of presentation and consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany balances and transactions have been eliminated in consolidation.

As discussed in Note 1, as a result of the recapitalization transactions, Planet Fitness, Inc. consolidates Pla-Fit Holdings and Pla-Fit Holdings is considered to be the predecessor to Planet Fitness, Inc. for accounting and reporting purposes. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.

The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”) and PF Melville LLC (“PF Melville”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs.

Use of estimates 

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.

Use of estimates 

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.

Concentrations 

(c) Concentrations

Cash and cash equivalents are financial instruments, which potentially subject the Company to a concentration of credit risk. The Company invests its excess cash in several major financial institutions, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company maintains balances in excess of these limits, but does not believe that such deposits with its banks are subject to any unusual risk.

The credit risk associated with trade receivables is mitigated due to the large number of customers, generally our franchisees, and their broad dispersion over many different geographic areas. We do not have any concentrations with respect to our revenues.

The Company purchases equipment, both for corporate-owned stores and for sales to franchisee-owned stores, from two primary vendors. For the year ended December 31, 2015 purchases from these two vendors comprised 79% and 18%, respectively, for the year ended December 31, 2014 purchases from these two vendors comprised 66% and 25%, respectively, and for the year ended December 31, 2013 purchases from these two vendors comprised 66% and 27%, respectively, of total equipment purchases.

The Company, including Planet Fitness NAF, LLC (“NAF”) uses one primary vendor for advertising services. Purchases from this vendor totaled 49%, 61%, and 68% of total advertising purchases for the years ended December 31, 2015, 2014 and 2013, respectively (see Note 5 for further discussion of NAF).

Cash and cash equivalents 

(d) Cash and cash equivalents

The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash held within the NAF is recorded as a restricted asset (see Note 5).

Revenue recognition 

(e) Revenue recognition

Franchise revenue

The following revenues are generated as a result of transactions with or related to the Company’s franchisees.

Area development fees

Franchisees contractually enter into area development agreements (ADAs) to secure the exclusive right to open franchise stores within a defined geographical area. ADAs establish the timing and number of stores to be developed within the defined geographical area. Pursuant to an ADA, a franchisee is generally required to pay an initial nonrefundable development fee for a minimum number of stores to be developed, as outlined in the respective ADA. ADA fees collected in advance are deferred until the Company provides substantially all required obligations pursuant to the ADA. As the efforts and total cost relating to initial services are affected significantly by the number of stores opened in an area, the respective ADA is treated as a divisible contract. As each new site is accepted under an ADA, a franchisee signs a franchise operating agreement for the respective franchise location. As each store opened under an ADA typically has performance obligations associated with it, the Company recognizes ADA revenue as each individual franchise location is developed in proportion to the total number of stores to be developed under the ADA. These obligations are typically completed once the store is opened or the franchisee executes the individual property lease. As of December 31, 2015 and 2014, the deferred revenue for ADAs was $10,471 and $8,215, respectively. ADAs generally have an initial term equal to the number of years over which the franchisee is required to open franchise stores, which is typically 5 to 10 years. There is no right of refund for an executed ADA. Upon default, as defined in the agreement, the Company may reacquire the rights pursuant to an ADA, and all remaining deferred revenue is recognized at that time.

Franchise fees and performance fees

For stores opened without an ADA, the Company generally charges an initial upfront nonrefundable franchise fee. Nonrefundable franchise fees are typically deferred until the franchisee executes a lease and receives initial training for the location, which is the point at which the Company has determined it has provided all of its material obligations required to recognize revenue. As of December 31, 2015 and 2014, the Company has recorded deferred franchise fees of $473 and $205, respectively, relating to stores to be opened in future years. These amounts are included in deferred revenue as of December 31, 2015 and 2014.

The individual franchise agreements typically have a 10-year initial term, but provide the franchisee with an opportunity to enter into successive renewals subject to certain conditions.

Franchise agreements entered into prior to 2010 may include performance fees, which are fees earned by the Company upon each franchise store reaching a predetermined amount of total monthly membership billings. Performance fees are recognized when the related performance thresholds have been met.

Royalties

Royalties, which represent recurring fees paid by franchisees based on the franchisee-owned stores’ monthly membership billings, are recognized on a monthly basis over the term of the franchise agreement. As specified under certain franchise agreements, the Company recognizes additional royalty fees as the franchisee-owned stores attain contractual monthly membership billing threshold amounts. Beginning in 2010, for all new franchise agreements entered into, the Company began charging a fixed royalty percentage based upon gross membership billings.

Other fees

Online member join fees are paid to the Company by franchisees for processing new membership transactions when a new member signs up for a membership to a franchisee-owned store through the Company’s website.

 

Billing transaction fees are paid to the Company for the processing of franchisee membership dues and annual fees through the Company’s third-party hosted point-of-sale system.

Placement

The Company is generally responsible for assembly and placement of equipment it sells to franchisee-owned stores. Placements revenue is recognized upon completion and acceptance of the services at the franchise location.

Commission income

The Company recognizes commission income from its franchisees’ use of preferred vendor arrangements. Commissions are recognized when amounts have been earned and collectability from the vendor is reasonably assured.

Corporate-owned stores revenue

The following revenues are generated from stores owned and operated by the Company.

Membership dues revenue

Customers are offered multiple membership choices varying in length. Membership dues are earned and recognized over the membership term on a straight-line basis.

Enrollment fee revenue

Enrollment fees are charged to new members at the commencement of their membership. The Company recognizes enrollment fees ratably over the estimated duration of the membership life, which is generally two years.

Annual membership fee revenue

Annual membership fees are annual fees charged to members in addition to and in order to maintain low monthly membership dues. The Company recognizes annual membership fees ratably over the 12-month membership period.

Retail sales

The Company sells Planet Fitness branded apparel, food, beverages, and other accessories. The revenue for these items is recognized at the point of sale.

Equipment revenue

The Company sells and delivers equipment purchased from third-party equipment manufacturers to U.S. based franchisee-owned stores. Equipment revenue is recognized upon the equipment being delivered to and assembled at each store and accepted by the franchisee. Franchisees are charged for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment revenue and freight costs are recorded within cost of revenue. The Company recognizes revenue on a gross basis in these transactions as management has determined the Company to be the principal in these transactions. Management determined the Company to be the principal because the Company is the primary obligor in these transactions, the Company has latitude in establishing prices for the equipment sales to franchisees, the Company has supplier selection discretion and is involved in determination of product specifications, and the Company bears all credit risk associated with obligations to the equipment manufacturers.

Equipment deposits are recognized as a liability on the accompanying consolidated balance sheets until delivery, assembly (if required), and acceptance by the franchisee. As of December 31, 2015 and 2014, equipment deposits were $5,587 and $6,675, respectively.

Sales tax

All revenue amounts are recorded net of applicable sales tax.

Deferred revenue 

(f) Deferred revenue

Deferred revenue represents cash received from franchisees for ADAs and franchise fees for which revenue recognition criteria has not yet been met and cash received from members for enrollment fees, membership dues and annual fees for the portion not yet earned based on the membership period.

Cost of revenue 

(g) Cost of revenue

Cost of revenue consists of direct costs associated with equipment sales, including freight costs, direct costs related to the maintenance and support of the Company’s proprietary system-wide point-of-sale system, and the cost of retail merchandise sold in corporate-owned stores. Costs related to the point-of-sale system were $1,236, $3,385, and $1,107 for the years ended December 31, 2015, 2014 and 2013 respectively. Costs related to retail merchandise were immaterial in all periods presented. Rebates from equipment vendors where the Company has recognized the related equipment revenue and costs are recorded as a reduction to the cost of revenue.

Store operations 

(h) Store operations

Store operations consists of the direct costs related to operating corporate-owned stores, including our store management and staff, rent expense, utilities, supplies, maintenance, and local advertising.

Selling, general and administrative 

(i) Selling, general and administrative

Selling, general and administrative expenses consist of costs associated with administrative and franchisee support functions related to our existing business as well as growth and development activities. These costs primarily consist of payroll, IT related, marketing, legal and accounting expenses. These expenses include costs related to placement services of $3,452, $2,743, and $2,245, for the years ended December 31, 2015, 2014 and 2013, respectively.

Accounts and notes receivable 

(j) Accounts and notes receivable

Accounts receivable is primarily comprised of amounts owed to the Company resulting from equipment, placement, and commission revenue. Notes receivable arise primarily from financing activities with franchisees. The Company evaluates its accounts and notes receivable on an ongoing basis and may establish an allowance for doubtful accounts based on collections and current credit conditions. Accounts are written off as uncollectible when it is determined that further collection efforts will be unsuccessful. Notes receivable are generally secured by all property, assets, and rights owned by the franchisee. Historically, the Company has not had a significant amount of write-offs.

Leases and asset retirement obligations 

(k) Leases and asset retirement obligations

The Company recognizes rent expense related to leased office and operating space on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of escalation provisions and lease incentives, such as tenant improvements provided by lessors, and is recorded as deferred rent in the Company’s consolidated balance sheets.

In accordance with ASC Topic 410, Asset Retirement and Environmental Obligations, the Company establishes assets and liabilities for the present value of estimated future costs to return certain leased facilities to their original condition. Such assets are depreciated on a straight-line basis over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs.

Property and equipment 

(l) Property and equipment

Property and equipment is recorded at cost and depreciated using the straight-line method over its related estimated useful life. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset, whichever is shorter. Upon sale or retirement, the asset cost and related accumulated depreciation are removed from the respective accounts, and any related gain or loss is reflected in the consolidated statements of operations. Ordinary maintenance and repair costs are expensed as incurred. The estimated useful lives of the Company’s fixed assets by class of asset are as follows:

 

      Years

Buildings and building improvements

    20–40

Computers and equipment

    3

Furniture and fixtures

    5

Leasehold improvements

    Useful life or term of lease whichever is shorter

Fitness equipment

    5–7

Vehicles

    5

 
Advertising expenses 

(m) Advertising expenses

The Company expenses advertising costs as incurred. Advertising expenses, net of amounts reimbursed by franchisees, are included within selling, general and administrative expenses and totaled $9,349, $7,272, and $5,731 for the years ended December 31, 2015, 2014 and 2013, respectively. See Note 5 for discussion of the national advertising fund.

Goodwill, long-lived assets, and other intangible assets 

(n) Goodwill, long-lived assets, and other intangible assets

Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with ASC Topic 350, Intangibles—Goodwill and Other. In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; or (2) the intangible asset is separable. Intangibles are typically trade and brand names, customer relationships, noncompete agreements, reacquired franchise rights, and favorable or unfavorable leases. Transactions are evaluated to determine whether any gain or loss on reacquired franchise rights, based on their fair value, should be recognized separately from identified intangibles. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.

Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have an indefinite life are amortized over their estimated useful lives on either a straight-line or accelerated basis as deemed appropriate, and are reviewed for impairment when events or circumstances suggest that the assets may not be recoverable.

The Company performs its annual test for impairment of goodwill and indefinite lived intangible assets on December 31 of each year. For goodwill, the first step of the impairment test is to determine whether the carrying amount of a reporting unit exceeds the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, the Company would be required to perform a second step of the impairment test as this is an indication that the reporting unit’s goodwill may be impaired. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. Any impairment loss would be recognized in an amount equal to the excess of the carrying value of the goodwill over the implied fair value of the goodwill. The Company is also permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it need not perform the two-step impairment test.

For indefinite lived intangible assets, the impairment assessment consists of comparing the carrying value of the asset to its estimated fair value. To the extent that the carrying value exceeds the fair value of the asset, an impairment is recorded to reduce the carrying value to its fair value. The Company is also permitted to make a qualitative assessment of whether it is more likely than not an indefinite lived intangible asset’s fair value is less than its carrying value prior to applying the quantitative assessment. If based on the Company’s qualitative assessment it is not more likely than not that the carrying value of the asset is less than its fair value, then a quantitative assessment is not required.

The Company determined that no impairment charges were required during any periods presented.

The Company applies the provisions of ASC Topic 360, Property, Plant and Equipment, which requires that long-lived assets, including amortizable intangible assets, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment, then assets are required to be grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the undiscounted future net cash flows expected to be generated by the asset or asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no events or changes in circumstances that required the Company to test for impairment during any of the periods presented.

Income taxes 

(o) Income taxes

The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the expected future tax consequences attributable to temporary differences between the carrying amount of the existing tax assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied in the years in which temporary differences are expected to be recovered or settled. The principal items giving rise to temporary differences are the use of accelerated depreciation and certain basis differences resulting from acquisitions and the recapitalization transactions. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

As a result of the recapitalization transactions, Planet Fitness, Inc. became the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including Planet Fitness, Inc. following the recapitalization transactions, on a pro rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings following the recapitalization transactions. The Company is also subject to taxes in foreign jurisdictions.

The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see Note 16).

During 2013 the Company changed its position with respect to taxes due on interest and dividends to the state of New Hampshire that had previously been paid by the members. This resulted in the Company making tax payments in 2013 totaling $4,392 for periods prior to November 7, 2012. This amount is included within other income (expense) for the year ended December 31, 2013 and is fully offset by amounts received from the members as reimbursement for the taxes paid, also recorded within other income (expense) for the year ended December 31, 2013. This position is not available for periods subsequent to November 7, 2012 and therefore taxes on interest and dividends due and payable in the periods after 2012 are paid by the members of Pla-Fit Holdings.

Tax benefit arrangements 

(p) Tax benefit arrangements

The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to the Continuing LLC Owners 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings. Also, pursuant to the exchange agreement, to the extent an exchange results in Pla-Fit Holdings, LLC incurring a current tax liability relating to the New Hampshire business profits tax, the Continuing LLC Owners have agreed that they will contribute to Pla-Fit Holdings, LLC an amount sufficient to pay such tax liability (up to 3.5% of the value received upon exchange). If and when the Company subsequently realizes a related tax benefit, Pla-Fit Holdings, LLC will distribute the amount of any such tax benefit to the relevant Continuing LLC Owner in respect of its contribution.

Based on current projections, the Company anticipates having sufficient taxable income to utilize these tax attributes and receive corresponding tax deductions in future periods. Accordingly, at the completion of the Reorganization Transactions and the IPO, the Company has recorded an initial liability of $142.0 million payable to the Direct TSG Investors and the Continuing LLC Owners under the tax benefit obligations, representing approximately 85% of the calculated tax savings based on the original basis adjustments the Company anticipates being able to utilize in future years. Changes in the projected liability resulting from these tax benefit arrangements may occur based on changes in anticipated future taxable income, changes in applicable tax rates or other changes in tax attributes that may occur and impact the expected future tax benefits to be received by the Company. Changes in the projected liability under these tax benefit arrangements will be recorded as a component of other income (expense) each period. The projection of future taxable income involves significant judgment. Actual taxable income may differ from estimates, which could significantly impact the liability under the tax benefit arrangements and the Company’s consolidated results of operations.

Fair Value 

(c) Fair Value

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015:

 

      Total fair
value at
March 31,
2016		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 376       $ —       $ 376       $ —   

 

  

 

      Total fair
value at
December 31,
2015		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,147       $ —       $ 1,147       $ —   

 

  
Fair Value 

(q) Fair value

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 and December 31, 2014:

 

      Total fair
value at
December 31,
2015		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,147       $ —       $ 1,147       $ —   

 

  

 

      Total fair
value at
December 31,
2014		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,711       $ —       $ 1,711       $ —   

 

  
Financial instruments 

(r) Financial instruments

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying value of debt also approximates fair value as it is variable rate debt. The Company has determined that the determination of fair value of amounts due from related parties under long-term arrangements is impracticable given the related-party nature of these agreements.

Derivative instruments and hedging activities 

(s) Derivative instruments and hedging activities

The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income, to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings.

The Company only enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

 

The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the cash flow hedge is de-designated because a forecasted transaction is not probable of occurring, or management determines to remove the designation of the cash flow hedge.

In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and recognizes immediately in earnings gains and losses that were accumulated in other comprehensive income related to the hedging relationship. See Note 10 for further information.

Equity-based compensation 

(t) Equity-based compensation

The Company has an equity-based compensation plan under which it receives services from employees as consideration for equity instruments of the Company. The compensation expense is determined based on the fair value of the award as of the grant date. Compensation expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. See Note 14 for further information.

Guarantees 

(u) Guarantees

The Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Notes 3 and 17 for further discussion of such obligations guaranteed.

Contingencies 

(v) Contingencies

The Company records estimated future losses related to contingencies when such amounts are probable and estimable. The Company includes estimated legal fees related to such contingencies as part of the accrual for estimated future losses.

Reclassifications 

(w) Reclassifications

Certain amounts have been reclassified to conform to current year presentation, including deferred financing costs, which were previously classified in other assets, net and are now classified as a direct reduction of long-term debt, see Note 2(w).

Recent accounting pronouncements 

(d) Recent accounting pronouncements

The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 for public companies. In March 2016, the FASB issued ASU 2016-08, which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. This guidance is to be applied either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact, if any, the adoption of this guidance will have on its consolidated financial statements.

 

The FASB issued ASU No. 2015-02, Income Statement—Consolidation, in February 2015. This guidance affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the guidance 1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, 2) eliminates the presumption that a general partner should consolidate a limited partnership, 3) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and 4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-02 as of January 1, 2016, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2015-05: Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, in April 2015. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-05 as of January 1, 2016 on a prospective basis, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2016-02, Leases, in February 2016. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public companies. Early application of the amendments in this update is permitted for all entities. The Company is currently evaluating the effect that implementation of this guidance will have on its consolidated financial statements.

The FASB issued ASU No. 2016-09, Stock Compensation, in March 2016. This guidance is intended to simplify several aspects of the accounting for share-based payment award transactions. This guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is currently evaluating the effect of the standard on its consolidated financial statements.

Recent accounting pronouncements 

(x) Recent accounting pronouncements

The FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, in April 2015. This guidance requires reporting entities to present debt issuance costs as a direct deduction from the carrying amount of the related debt liability. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. A reporting entity must apply this guidance retrospectively to all prior periods presented in the financial statements. The Company has retrospectively adopted this guidance as of December 31, 2015 and accordingly has reclassified $7,294 of deferred financing costs from other assets to long-term debt on its consolidated balance sheet as of December 31, 2014.

 

The FASB issued ASU No. 2015-02, Income Statement—Consolidation, in February 2015. This guidance affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the guidance 1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, 2) eliminates the presumption that a general partner should consolidate a limited partnership, 3) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and 4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 for public companies. The Company is currently evaluating the impact, if any, the adoption of this guidance will have on its consolidated financial statements.

In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. This guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This guidance simplifies the presentation of deferred income taxes by requiring that deferred tax liabilities and assets all be classified as noncurrent in a classified statement of financial position. The guidance is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company has adopted this guidance as of December 31, 2015, with no impact to the previously reported amounts.

Summary of significant accounting policies (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Accounting Policies [Abstract]
 
 
Schedule of Estimated Useful Lives of Fixed Assets
 
Text Block 
Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis
Text Block 
Text Block 
Schedule of Estimated Useful Lives of Fixed Assets 

The estimated useful lives of the Company’s fixed assets by class of asset are as follows:

 

      Years

Buildings and building improvements

    20–40

Computers and equipment

    3

Furniture and fixtures

    5

Leasehold improvements

    Useful life or term of lease whichever is shorter

Fitness equipment

    5–7

Vehicles

    5

 
Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis 

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015:

 

      Total fair
value at
March 31,
2016		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 376       $ —       $ 376       $ —   

 

  

 

      Total fair
value at
December 31,
2015		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,147       $ —       $ 1,147       $ —   

 

  
Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis 

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 and December 31, 2014:

 

      Total fair
value at
December 31,
2015		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,147       $ —       $ 1,147       $ —   

 

  

 

      Total fair
value at
December 31,
2014		      Quoted
prices
in active
markets
(Level 1)		      Significant
other
observable
inputs
(Level 2)		      Significant
unobservable
inputs
(Level 3)		  

Interest rate caps

    $ 1,711       $ —       $ 1,711       $ —   

 

  
Variable interest entities (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Carrying Value of Variable Interest Entities of Consolidated Financial Statements

The carrying values of VIEs included in the consolidated financial statements as of March 31, 2016 and December 31, 2015 are as follows:

 

      March 31, 2016      December 31, 2015  
      Assets      Liabilities      Assets      Liabilities  

PF Melville

    $ 3,790       $ —       $ 3,728       $ —   

MMR

      3,025         —         2,953         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 6,815       $ —       $ 6,681       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

  
Carrying Value of Variable Interest Entities of Consolidated Financial Statements

The carrying values of VIEs included in the consolidated financial statements as of December 31, 2015 and December 31, 2014 are as follows:

 

      December 31, 2015      December 31, 2014  
      Assets      Liabilities      Assets      Liabilities  

PF Melville

    $ 3,728       $ —       $ 3,479       $ —   

MMR

      2,953         —         2,750         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 6,681       $ —       $ 6,229       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

  
Acquisition (Tables)
Schedule of Allocated Purchase Consideration

The Company financed the purchase through borrowings under its credit facility. The purchase consideration was allocated as follows:

 

      Amount  

Fixed assets

    $ 7,634   

Reacquired franchise rights

      8,950   

Membership relationships

      5,882   

Favorable leases, net

      700   

Other assets

      35   

Goodwill

      19,771   

Liabilities assumed, including deferred revenues

      (1,334 ) 
  

 

 

  
   $ 41,638   
  

 

 

  
Property and equipment (Tables)
Schedule of Property and Equipment

Property and equipment as of December 31, 2015 and 2014 consists of the following:

 

      December 31,
2015		     December 31,
2014		  

Land

    $ 910      $ 910   

Equipment

      27,391        22,137   

Leasehold improvements

      38,288        27,361   

Buildings and improvements

      5,107        5,119   

Furniture & fixtures

      3,030        2,309   

Other

      2,947        2,096   

Construction in progress

      1,991        5,375   
  

 

 

    

 

 

  
     79,664        65,307   

Accumulated Depreciation

      (23,525 )      (15,728 ) 
  

 

 

    

 

 

  

Total

    $ 56,139      $ 49,579   
  

 

 

    

 

 

  
Goodwill and intangible assets (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
Summary of Goodwill and Intangible Assets
Text Block 
Text Block 
Summary of Changes in Carrying Amount of Goodwill
 
Text Block 
Summary of Amortization expenses
Text Block 
Text Block 
Summary of Goodwill and Intangible Assets 

A summary of goodwill and intangible assets at March 31, 2016 and December 31, 2015 is as follows:

 

March 31, 2016    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782         (61,469 )    $ 110,313   

Noncompete agreements

      5.0         14,500         (9,852 )      4,648   

Favorable leases

      7.5         2,935         (1,354 )      1,581   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (3,113 )      5,837   
     

 

 

     

 

 

    

 

 

  
        201,567         (79,188 )      122,379   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (79,188 )    $ 268,679   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  

 

  

 

December 31, 2015    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782       $ (57,741 )    $ 114,041   

Noncompete agreements

      5.0         14,500         (9,127 )      5,373   

Favorable leases

      7.5         2,935         (1,256 )      1,679   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (2,724 )      6,226   
     

 

 

     

 

 

    

 

 

  
        201,567         (74,248 )      127,319   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (74,248 )    $ 273,619   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  
Summary of Goodwill and Intangible Assets 

A summary of goodwill and intangible assets at December 31, 2015 and 2014 is as follows:

 

December 31, 2015    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782       $ (57,741 )    $ 114,041   

Noncompete agreements

      5.0         14,500         (9,127 )      5,373   

Favorable leases

      7.5         2,935         (1,256 )      1,679   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (2,724 )      6,226   
     

 

 

     

 

 

    

 

 

  
        201,567         (74,248 )      127,319   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (74,248 )    $ 273,619   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  

 

  

 

December 31, 2014    Weighted
average
amortization
period
(years)		      Gross
carrying
amount		      Accumulated
amortization		     Net
carrying
Amount		  

Customer relationships

      11.1       $ 171,782       $ (41,130 )    $ 130,652   

Noncompete agreements

      5.0         14,500         (6,229 )      8,271   

Favorable leases

      7.5         2,935         (779 )      2,156   

Order backlog

      0.4         3,400         (3,400 )      —   

Reacquired franchise rights

      5.8         8,950         (1,167 )      7,783   
     

 

 

     

 

 

    

 

 

  
        201,567         (52,705 )      148,862   

Indefinite-lived intangible:

           

Trade and brand names

      N/A         146,300         —        146,300   
     

 

 

     

 

 

    

 

 

  

Total intangible assets

       $ 347,867       $ (52,705 )    $ 295,162   
     

 

 

     

 

 

    

 

 

  

Goodwill

       $ 176,981       $ —      $ 176,981   
     

 

 

     

 

 

    

 

 

  
Summary of Changes in Carrying Amount of Goodwill 

The changes in the carrying amount of goodwill are as follows:

 

      Franchise      Corporate-
owned stores		      Equipment      Total  

As of December 31, 2013

    $ 16,938       $ 47,606       $ 92,666       $ 157,210   

Acquisition of franchises

      —         19,771         —         19,771   
  

 

 

     

 

 

     

 

 

     

 

 

  

As of December 31, 2014

      16,938         67,377         92,666         176,981   

Additions

      —         —         —         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

As of December 31, 2015

    $ 16,938       $ 67,377       $ 92,666       $ 176,981   
  

 

 

     

 

 

     

 

 

     

 

 

  
Summary of Amortization expenses 

The anticipated annual amortization expense to be recognized in future years as of March 31, 2016 is as follows:

 

      Amount  

Remainder of 2016

    $ 14,816   

2017

      18,215   

2018

      14,583   

2019

      14,215   

2020

      12,517   

Thereafter

      48,033   
  

 

 

  

Total

    $ 122,379   
  

 

 

  
Summary of Amortization expenses 

The anticipated annual amortization expense to be recognized in future years as of December 31, 2015 is as follows:

 

      Amount  

2016

    $ 19,756   

2017

      18,215   

2018

      14,583   

2019

      14,215   

2020

      12,517   

Thereafter

      48,033   
  

 

 

  

Total

    $ 127,319   
  

 

 

  
Long-term debt (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Schedule of Long-term Debt 

Long-term debt as of March 31, 2016 and December 31, 2015 consists of the following:

 

      March 31,
2016		     December 31,
2015		  

Term loan B requires quarterly installments plus interest through the term of the loan, maturing March 31, 2021. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.50% at March 31, 2016 and 4.75% at December 31, 2015)

    $ 491,000      $ 492,275   

Revolving credit line, requires interest only payments through the term of the loan, maturing March 31, 2019. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.25% at March 31, 2016 and December 31, 2015)

      —        —   
  

 

 

    

 

 

  

Total debt, excluding deferred financing costs

      491,000        492,275   

Deferred financing costs, net of accumulated amortization

      (7,025 )      (7,396 ) 
  

 

 

    

 

 

  

Total debt

      483,975        484,879   

Current portion of long-term debt and line of credit

      5,100        5,100   
  

 

 

    

 

 

  

Long-term debt, net of current portion

    $ 478,875      $ 479,779   
  

 

 

    

 

 

  
Schedule of Long-term Debt 

Long-term debt as of December 31, 2015 and 2014 consists of the following:

 

      December 31,
2015		     December 31,
2014		  

Term loan B requires quarterly installments plus interest through the term of the loan, maturing March 31, 2021. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.75% at December 31, 2015 and 2014)

    $ 492,275      $ 387,075   

Revolving credit line, requires interest only payments through the term of the loan, maturing March 31, 2019. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (4.25% at December 31, 2015 and 2014)

      —        —   
  

 

 

    

 

 

  

Total debt, excluding deferred financing costs

      492,275        387,075   

Deferred financing costs, net of accumulated amortization

      (7,396 )      (7,294 ) 
  

 

 

    

 

 

  

Total debt

      484,879        379,781   

Current portion of long-term debt and line of credit

      5,100        3,900   
  

 

 

    

 

 

  

Long-term debt, net of current portion

    $ 479,779      $ 375,881   
  

 

 

    

 

 

  
Schedule of Future Annual Payments of Long-term Debt 

Future annual principal payments of long-term debt as of March 31, 2016 are as follows:

 

      Amount  

Remainder of 2016

    $ 3,825   

2017

      5,100   

2018

      5,100   

2019

      5,100   

2020

      5,100   

Thereafter

      466,775   
  

 

 

  

Total

    $ 491,000   
  

 

 

  
Schedule of Future Annual Payments of Long-term Debt 

Future annual principal payments of long-term debt as of December 31, 2015 are as follows:

 

      Amount  

2016

    $ 5,100   

2017

      5,100   

2018

      5,100   

2019

      5,100   

2020

      5,100   

Thereafter

      466,775   
  

 

 

  

Total

    $ 492,275   
  

 

 

  
Deferred revenue (Tables)
Schedule of Deferred Revenue

The summary set forth below represents the balances in deferred revenue as of December 31, 2015 and 2014:

 

      December 31,
2015		      December 31,
2014		  

Prepaid membership fees

    $ 5,134       $ 5,382   

Enrollment fees

      1,555         1,692   

Equipment discount

      2,968         2,689   

Annual membership fees

      6,132         5,696   

Area development and franchise fees

      10,944         8,420   
  

 

 

     

 

 

  

Total deferred revenue

      26,733         23,879   

Long-term portion of deferred revenue

      12,016         9,330   
  

 

 

     

 

 

  

Current portion of deferred revenue

    $ 14,717       $ 14,549   
  

 

 

     

 

 

  
Related party transactions (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Summary of Amounts Due From Stockholders/Members 

Amounts due from related parties consist of:

 

      March 31,
2016		      December 31,
2015		  

Accounts receivable—related entities

    $ 47       $ 39   

Accounts receivable—stockholders/members

      958         4,901   
  

 

 

     

 

 

  

Due from related parties

    $ 1,005       $ 4,940   
  

 

 

     

 

 

  
Summary of Amounts Due From Stockholders/Members 

Amounts due from stockholders/members as of December 31, 2015 and 2014 relate to reimbursements for certain taxes owed or paid by the Company.

 

      December 31,
2015		      December 31,
2014		  

Accounts receivable—related entities

    $ 39       $ 11   

Accounts receivable—stockholders/members

      4,901         1,130   
  

 

 

     

 

 

  
     4,940         1,141   

Due from related parties, current portion

      4,940         1,141   
  

 

 

     

 

 

  

Due from related parties, net of current portion

    $ —       $ —   
  

 

 

     

 

 

  
Schedule of Related Party Transactions 

Activity with entities considered to be related parties is summarized below:

 

      For the three months ended
March 31,		  
          2016          2015  

Franchise revenue

    $ 421       $ 262   

Equipment revenue

      593         55   
  

 

 

     

 

 

  

Total revenue from related parties

    $ 1,014       $ 317   
  

 

 

     

 

 

  
Schedule of Related Party Transactions 

Activity with entities considered to be related parties is summarized below.

 

      For the Year Ended December 31,  
              2015              2014              2013  

Franchise revenue

    $ 1,232       $ 733       $ 1,620   

Equipment revenue

      1,686         3,711         855   
  

 

 

     

 

 

     

 

 

  

Total revenue from related parties

    $ 2,918       $ 4,444       $ 2,475   
  

 

 

     

 

 

     

 

 

  
Equity-based compensation (Tables)
Schedule of Grant Date Weighted-average Fair Value Assumptions 

The fair value of stock option awards granted during the year ended December 31, 2015 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:

 

Expected term (years)(1)

      6.25   

Expected volatility(2)

      35.4%   

Risk-free interest rate(3)

      1.82%   

Dividend yield(4)

      —   

 

  

 

(1)   Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)   Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)   The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)   We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.
Summary of Class M Unit Activity 

A summary of Class M Unit activity is presented below:

 

      Class M Units     Holdings Units      Weighted
average grant
date fair value		  

Outstanding at January 1, 2013

      —      $ —      

Units granted

      431.577        —      
  

 

 

    

 

 

     

Outstanding at December 31, 2013

      431.577        —      
  

 

 

    

 

 

     

Units granted

      121.051        —      

Units forfeited

      (47.368 )      —      
  

 

 

    

 

 

     

Outstanding at December 31, 2014

      505.260        —      
  

 

 

    

 

 

     

Units granted

      —        —      

Units forfeited

      (21.053 )      —      

Units converted upon IPO

      (484.207 )      4,238,338         1.52   
  

 

 

    

 

 

     

 

 

  

Outstanding at December 31, 2015

      —        4,238,338         1.52   
  

 

 

    

 

 

     

 

 

  

Vested or expected to vest at December 31, 2015

      —        4,238,338         1.52   
  

 

 

    

 

 

     

 

 

  
Summary of stock option activity 

A summary of stock option activity for the year ended December 31, 2015:

 

      Stock Options     Weighted average
exercise price		      Weighted
average
remaining
contractual term
(years)		  

Outstanding at beginning of period

      —      $ —      

Granted

      116,690        16.14      

Exercised

      —        —      

Forfeited

      (8,420 )      16.00      
  

 

 

    

 

 

     

Outstanding at December 31, 2015

      108,270      $ 16.15         9.6   
  

 

 

    

 

 

     

 

 

  

Vested or expected to vest at December 31, 2015

      104,769      $ 16.15         9.6   
  

 

 

    

 

 

     

 

 

  
Schedule of Grant Date Weighted-average Fair Value Assumptions 

Valuation assumptions:

 

      Year ended
December 31,		  
      2014      2013  

Expected term (years)

      1.70         3.70   

Expected volatility

      36.8%         39.4%   

Risk-free interest rate

      0.4%         0.8%   

Dividend yield

      —         —   

 

  
Earnings per share (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share 

The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A common stock:

 

Basic net income per share:    For the three months ended
March 31, 2016		  

Numerator

   

Net income

    $ 16,345   

Less: net income attributable to non-controlling interests

      12,977   
  

 

 

  

Net income attributable to Planet Fitness, Inc.

    $ 3,368   
  

 

 

  

Denominator

   

Weighted-average shares of Class A common stock outstanding—basic

      36,597,985   
  

 

 

  

Earnings per share of Class A common stock—basic & diluted

    $ 0.09   
  

 

 

  
Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share 

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:

 

Basic net income per share:    August 6, 2015 through
December 31, 2015		  

Numerator

   

Net income

    $ 23,454   

Less: net income attributable to non-controlling interests

      19,348   
  

 

 

  

Net income attributable to Planet Fitness, Inc.

    $ 4,106   
  

 

 

  

Denominator

   

Weighted-average shares of Class A common stock outstanding—basic

      36,243,557   
  

 

 

  

Earnings per share of Class A common stock—basic

    $ 0.11   
  

 

 

  
Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share 

The unaudited pro forma net income per share has been prepared using pro forma net income, as set forth above, which reflects the pro forma effects on provision for income taxes and the allocation of pro forma net income between noncontrolling interests and Planet Fitness, Inc., resulting from the recapitalization transactions and the IPO divided by pro forma weighted average shares outstanding, which includes Class A common stock of Planet Fitness, Inc. outstanding after the recapitalization transactions and the IPO.

 

     

Quarter ended
March 31,

2015

  

Pro forma net income attributable to Planet Fitness, Inc.

    $                   1,415   
  

 

 

  

Pro forma weighted average shares of Class A common stock—basic and diluted

      36,598   
  

 

 

  

Pro forma net income per share—basic and diluted

    $ 0.04   

 

  
Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share 

The unaudited pro forma net income per share has been prepared using pro forma net income, as set forth above, which reflects the pro forma effects on provision for income taxes and the allocation of pro forma net income between noncontrolling interests and Planet Fitness, Inc., resulting from the recapitalization transactions and the IPO divided by pro forma weighted average shares outstanding which includes Class A common stock of Planet Fitness, Inc. outstanding after the recapitalization transactions and the IPO.

 

     

Year ended
December 31,

2015

  

Pro forma net income attributable to Planet Fitness, Inc.

    $                   6,405   
  

 

 

  

Pro forma weighted average shares of Class A common stock—basic and diluted

      36,598   
  

 

 

  

Pro forma net income per share—basic and diluted

    $ 0.17   

 

  
Income taxes (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
Schedule of Income Before Provision for Income Taxes
 
Text Block 
Schedule of Provision (Benefit) for Income Taxes
 
Text Block 
Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Tax Rate
 
Text Block 
Schedule of Deferred Tax Assets and Liabilities
 
Text Block 
Schedule of Future Payments Under Tax Benefit Arrangements
Text Block 
Text Block 
Schedule of Income Before Provision for Income Taxes 

Income before the provision for income taxes as shown in the accompanying consolidated statements of operations is as follows:

 

      Year Ended December 31,  
      2015     2014     2013  

Domestic

    $ 48,716      $ 39,534      $ 26,432   

Foreign

      (1,438 )      (1,056 )      —   
  

 

 

    

 

 

    

 

 

  

Total current tax expense

      47,278        38,478        26,432   
  

 

 

    

 

 

    

 

 

  
Schedule of Provision (Benefit) for Income Taxes 

The provision (benefit) for income taxes consists of the following:

 

      Year Ended December 31,  
      2015     2014     2013  

Current:

       

Federal

    $ 686      $ —      $ —   

State

      2,188        1,078        2,063   

Foreign

      139        168        —   
  

 

 

    

 

 

    

 

 

  

Total current tax expense

      3,013        1,246        2,063   
  

 

 

    

 

 

    

 

 

  

Deferred:

       

Federal

      5,636        —        —   

State

      935        217        (1,430 ) 

Foreign

      (436 )      (280 )      —   
  

 

 

    

 

 

    

 

 

  

Total deferred tax (benefit) expense

      6,135        (63 )      (1,430 ) 
  

 

 

    

 

 

    

 

 

  

Provision for income taxes

    $ 9,148      $ 1,183      $ 633   
  

 

 

    

 

 

    

 

 

  
Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Tax Rate 

A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:

 

      Year Ended
December 31,
2015		  

U.S. statutory tax rate

      35.0%   

State and local taxes, net of federal benefit

      6.2%   

Rate change on deferred tax asset from recapitalization

      6.9%   

Tax benefit arrangement liability adjustment

      (2.1)%   

Foreign tax rate differential

      0.3%   

Withholding taxes and other

      0.2%   

Income attributable to non-controlling interests

      (27.1)%   
  

 

 

  

Effective tax rate

      19.4%   
  

 

 

  
Schedule of Deferred Tax Assets and Liabilities 

Details of the Company’s deferred tax assets and liabilities are summarized as follows:

 

      Year Ended
December 31,		  
              2015             2014  

Deferred tax assets:

     

Accrued expense and reserves

    $ 353      $ 75   

Deferred revenue

      1,276        182   

Goodwill and intangible assets

      113,460        —   

Net operating loss

      716        280   

Other

      2,841        85   
  

 

 

    

 

 

  

Deferred tax assets

    $ 118,646      $ 622   
  

 

 

    

 

 

  

Deferred tax liabilities:

     

Prepaid expenses

      (674 )      (94 ) 

Goodwill and intangible assets

      —        (717 ) 

Property and equipment

      (614 )      (154 ) 
  

 

 

    

 

 

  

Total deferred tax liabilities

    $ (1,288 )    $ (965 ) 
  

 

 

    

 

 

  

Total deferred tax assets and liabilities

    $ 117,358      $ (343 ) 
  

 

 

    

 

 

  
Schedule of Future Payments Under Tax Benefit Arrangements 

Projected future payments under the tax benefit arrangements are as follows:

 

      Amount  

Remainder of 2016

    $ 906   

2017

      7,389   

2018

      7,336   

2019

      7,389   

2020

      7,585   

Thereafter

      107,473   
  

 

 

  

Total

    $ 138,078   
  

 

 

  
Schedule of Future Payments Under Tax Benefit Arrangements 

Projected future payments under the tax benefit arrangements are as follows:

 

      Amount  

2016

    $ 3,019   

2017

      7,125   

2018

      7,072   

2019

      7,125   

2020

      7,321   

Thereafter

      108,529   
  

 

 

  

Total

    $ 140,191   
  

 

 

  
Commitments and contingencies (Tables)
Schedule of Future Commitments Under Noncancelable Operating Leases

Approximate annual future commitments under noncancelable operating leases as of December 31, 2015 are as follows:

 

      Amount  

2016

    $ 13,272   

2017

      12,700   

2018

      11,738   

2019

      10,325   

2020

      9,245   

Thereafter

      44,802   
  

 

 

  

Total

    $ 102,082   
  

 

 

  
Segments (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Summary of Financial Information for the Company's Reportable Segments 

The tables below summarize the financial information for the Company’s reportable segments for the three months ended March 31, 2016 and 2015.  

      Three months ended March 31,  
              2016              2015  

Revenue

      

Franchise segment revenue—U.S.

    $ 27,230       $ 21,757   

Franchise segment revenue—International

      447         —   
  

 

 

     

 

 

  

Franchise segment total

      27,677         21,757   

Corporate-owned stores—U.S.

      24,698         23,270   

Corporate-owned stores—International

      999         276   
  

 

 

     

 

 

  

Corporate-owned stores total

      25,697         23,546   

Equipment segment—U.S.

      29,969         31,619   
  

 

 

     

 

 

  

Equipment segment total

      29,969         31,619   
  

 

 

     

 

 

  

Total revenue

    $ 83,343       $ 76,922   
  

 

 

     

 

 

  

 

  

 

 

      Three months ended March 31,  
              2016             2015  

Segment EBITDA

     

Franchise

    $ 23,813      $ 13,578   

Corporate-owned stores

      10,162        7,798   

Equipment

      6,318        6,763   

Corporate and other

      (6,587 )      (6,372 ) 
  

 

 

    

 

 

  

Total Segment EBITDA

    $ 33,706      $ 21,767   
  

 

 

    

 

 

  
Summary of Financial Information for the Company's Reportable Segments 

The “Corporate and other” column, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.

 

      Year Ended December 31,  
              2015              2014              2013  

Revenue

         

Franchise segment revenue—U.S.

    $ 87,299       $ 71,806       $ 44,157   

Franchise segment revenue—International

      786         —         —   
  

 

 

     

 

 

     

 

 

  

Franchise segment total

      88,085         71,806         44,157   

Corporate-owned stores segment—U.S.

      95,459         85,022         67,364   

Corporate-owned stores segment—International

      2,931         19         —   
  

 

 

     

 

 

     

 

 

  

Corporate-owned stores segment total

      98,390         85,041         67,364   

Equipment segment—U.S.

      144,062         122,930         99,488   
  

 

 

     

 

 

     

 

 

  

Equipment segment total

      144,062         122,930         99,488   
  

 

 

     

 

 

     

 

 

  

Total revenue

    $ 330,537       $ 279,777       $ 211,009   
  

 

 

     

 

 

     

 

 

  

 

  

 

      Year Ended December 31,  
      2015     2014     2013  

Segment EBITDA

       

Franchise

    $ 66,030      $ 53,109      $ 30,123   

Corporate-owned stores

      36,070        31,705        21,742   

Equipment

      31,936        26,447        19,791   

Corporate and other

      (30,051 )      (18,642 )      (7,504 ) 
  

 

 

    

 

 

    

 

 

  

Total Segment EBITDA

    $ 103,985      $ 92,619      $ 64,152   
  

 

 

    

 

 

    

 

 

  
Reconciliation of Total Segment EBITDA to Income Before Taxes 

The following table reconciles total Segment EBITDA to income before taxes:

 

      Three months ended March 31,  
              2016             2015  

Total Segment EBITDA

    $ 33,706      $ 21,767   

Less:

     

Depreciation and amortization

      7,703        8,201   

Other expense

      393        (736 ) 
  

 

 

    

 

 

  

Income from operations

      25,610        14,302   

Interest expense, net

      (6,367 )      (4,756 ) 

Other expense

      393        (736 ) 
  

 

 

    

 

 

  

Income before income taxes

    $ 19,636      $ 8,810   
  

 

 

    

 

 

  
Reconciliation of Total Segment EBITDA to Income Before Taxes 

The following table reconciles total Segment EBITDA to income before taxes:

 

      Year Ended December 31,  
      2015     2014     2013  

Total Segment EBITDA

    $ 103,985      $ 92,619      $ 64,152   

Less:

       

Depreciation and amortization

      32,158        32,341        28,808   

Other expense

      (275 )      (1,261 )      (694 ) 
  

 

 

    

 

 

    

 

 

  

Income from operations

      72,102        61,539        36,038   

Interest expense, net

      (24,549 )      (21,800 )      (8,912 ) 

Other expense

      (275 )      (1,261 )      (694 ) 
  

 

 

    

 

 

    

 

 

  

Income before income taxes

    $ 47,278      $ 38,478      $ 26,432   
  

 

 

    

 

 

    

 

 

  
Summary of Company's Assets by Reportable Segment 

The following table summarizes the Company’s assets by reportable segment:

 

      March 31,
2016		      December 31,
2015		  

Franchise

    $ 214,464       $ 206,997   

Corporate-owned stores

      151,470         151,620   

Equipment

      193,261         208,168   

Unallocated

      126,471         132,392   
  

 

 

     

 

 

  

Total consolidated assets

    $ 685,666       $ 699,177   
  

 

 

     

 

 

  
Summary of Company's Assets by Reportable Segment 

The following table summarizes the Company’s assets by reportable segment:

 

     

December 31,

2015

     

December 31,

2014

  

Franchise

    $ 206,997       $ 216,985   

Corporate-owned stores

      151,620         157,868   

Equipment

      208,168         220,367   

Unallocated

      132,392         6,762   
  

 

 

     

 

 

  

Total consolidated assets

    $ 699,177       $ 601,982   
  

 

 

     

 

 

  
Summary of Company's Goodwill by Reportable Segment 

The following table summarizes the Company’s goodwill by reportable segment:

 

      March 31,
2016		      December 31,
2015		  

Franchise

    $ 16,938       $ 16,938   

Corporate-owned stores

      67,377         67,377   

Equipment

      92,666         92,666   
  

 

 

     

 

 

  

Consolidated goodwill

    $ 176,981       $ 176,981   
  

 

 

     

 

 

  
Summary of Company's Goodwill by Reportable Segment 

The following table summarizes the Company’s goodwill by reportable segment:

 

      December 31,
2015		      December 31,
2014		  

Franchise

    $ 16,938       $ 16,938   

Corporate-owned stores

      67,377         67,377   

Equipment

      92,666         92,666   
  

 

 

     

 

 

  

Total consolidated goodwill

    $ 176,981       $ 176,981   
  

 

 

     

 

 

  
Corporate-owned and franchisee-owned stores (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Schedule of Changes in Corporate-owned and Franchisee-owned Stores

The following table shows changes in our corporate-owned and franchisee-owned stores for the three months ended March 31, 2016 and 2015:

 

      For the three months
ended March 31,		  
              2016             2015  

Franchisee-owned stores:

     

Stores operated at beginning of period

      1,066        863   

New stores opened

      48        59   

Stores debranded or consolidated(1)

      (1 )      (3 ) 
  

 

 

    

 

 

  

Stores operated at end of period

      1,113        919   
  

 

 

    

 

 

  

Corporate-owned stores:

     

Stores operated at beginning of period

      58        55   

New stores opened

      —        2   
  

 

 

    

 

 

  

Stores operated at end of period

      58        57   
  

 

 

    

 

 

  

Total stores:

     

Stores operated at beginning of period

      1,124        918   

New stores opened

      48        61   

Stores debranded or consolidated(1)

      (1 )      (3 ) 
  

 

 

    

 

 

  

Stores operated at end of period

      1,171        976   
  

 

 

    

 

 

  

 

  

 

(1)   The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity, with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
Schedule of Changes in Corporate-owned and Franchisee-owned Stores

The following table shows changes in our corporate-owned and franchisee-owned stores for the years ended December 31, 2015, 2014 and 2013:

 

      Year Ended December 31,  
          2015         2014         2013  

Franchisee-owned stores:

       

Stores operated at beginning of period

      863        704        562   

New stores opened

      206        169        148   

Stores debranded, sold or consolidated(1)

      (3 )      (10 )      (6 ) 
  

 

 

    

 

 

    

 

 

  

Stores operated at end of period

      1,066        863        704   
  

 

 

    

 

 

    

 

 

  

Corporate-owned stores:

       

Stores operated at beginning of period

      55        45        44   

New stores opened

      3        2        1   

Stores acquired from franchisees

      —        8        —   
  

 

 

    

 

 

    

 

 

  

Stores operated at end of period

      58        55        45   
  

 

 

    

 

 

    

 

 

  

Total stores:

       

Stores operated at beginning of period

      918        749        606   

New stores opened

      209        171        149   

Stores debranded, sold or consolidated(1)

      (3 )      (2 )      (6 ) 
  

 

 

    

 

 

    

 

 

  

Stores operated at end of period

      1,124        918        749   
  

 

 

    

 

 

    

 

 

  

 

  

 

(1)   The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated due to non-compliance with brand standards in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
Quarterly financial data (unaudited) (Tables)
Schedule of Quarterly Financial Data
      For the quarter ended  
      March 31,
2015		      June 30,
2015		      September 30,
2015		      December 31,
2015		  

Total revenue

    $ 76,923       $ 78,952       $ 68,817       $ 105,845   

Income from operations

      14,304         18,667         10,338         28,793   

Net income

      8,541         11,612         737         17,240   

 

  

 

Earnings per share(1):    August 6 through
September 30,
2015		      For the quarter
ended December 31,
2015		  

Class A—Basic

    $ 0.05       $ 0.06   

Class A—Diluted

    $ 0.04       $ 0.06   

 

  

 

      For the quarter ended  
      March 31,
2014		      June 30,
2014		      September 30,
2014		      December 31,
2014		  

Total revenue

    $ 57,594       $ 62,697       $ 63,467       $ 96,019   

Income from operations

      13,539         14,706         13,956         19,338   

Net income

      6,259         8,950         8,303         13,783   

 

  

 

(1)   Represents earnings per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the periods from August 6, 2015 through September 30, 2015 and the quarter ended December 31, 2015, the periods following the recapitalization transactions and IPO (see Note 15).
Business Organization - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Mar. 31, 2016
Members
State
Store
Dec. 31, 2015
Members
State
Store
Mar. 31, 2015
Store
Dec. 31, 2014
Store
Dec. 31, 2013
Store
Dec. 31, 2012
Store
Dec. 31, 2015
Class A Common Stock [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
Jun. 22, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
Aug. 11, 2015
Class A Common Stock [Member]
IPO [Member]
Direct TSG Investors [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Aug. 5, 2015
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Mar. 31, 2016
Pla-Fit Holdings, LLC [Member]
Dec. 31, 2015
Pla-Fit Holdings, LLC [Member]
Aug. 5, 2015
Pla-Fit Holdings, LLC [Member]
Aug. 11, 2015
Pla-Fit Holdings, LLC [Member]
Class A Common Stock [Member]
IPO [Member]
Aug. 11, 2015
Pla-Fit Holdings, LLC [Member]
Class A Common Stock [Member]
IPO [Member]
Aug. 11, 2015
Pla-Fit Holdings, LLC [Member]
Class A Common Stock [Member]
IPO [Member]
Continuing LLC Owners [Member]
Aug. 5, 2015
Pla-Fit Holdings, LLC [Member]
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Aug. 5, 2015
Planet Intermediate, LLC [Member]
Aug. 5, 2015
Planet Fitness Holdings, LLC [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of members
8,300,000 
7,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of owned and franchised locations
1,171 
1,124 
976 
918 
749 
606 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of states in which entity operates
47 
47 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of ownership
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
100.00% 
100.00% 
 
 
 
 
100.00% 
100.00% 
Percentage of economic interest
 
 
 
 
 
 
 
 
 
 
 
 
37.10% 
37.10% 
37.10% 
 
 
 
 
 
 
Number of stock issued during period
 
 
 
 
 
 
10,491,000 
5,033,945 
 
21,072,985 
(10,491,000)
72,602,810 
 
 
 
15,525,000 
 
10,491,055 
72,602,810 
 
 
Initial public offering price per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 16.00 
 
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
 
$ 156,946,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 156,946 
 
 
 
Number of shares converted
 
 
 
 
 
 
 
 
26,106,930 
 
 
 
 
 
 
 
 
 
 
 
 
Date of formation
Mar. 16, 2015 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Agreement
Mar. 31, 2015
Dec. 31, 2015
Vendor
Agreement
Dec. 31, 2014
Vendor
Dec. 31, 2013
Vendor
Significant Accounting Policies [Line Items]
 
 
 
 
 
Number of vendors
 
 
2 
2 
2 
Deferred revenue
 
 
$ 26,733,000 
$ 23,879,000 
 
Membership enrollment fees recognition period
 
 
2 years 
 
 
Membership fees recognition period
 
 
12 months 
 
 
Equipment deposits
5,253,000 
 
5,587,000 
6,675,000 
 
Cost of revenue
23,639,000 
25,946,000 
113,492,000 
100,306,000 
81,353,000 
Selling, general and administrative
11,845,000 
14,138,000 
55,573,000 
35,121,000 
23,118,000 
Advertising expenses
 
 
9,349,000 
7,272,000 
5,731,000 
Income tax positions
 
 
Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. 
 
 
Net cash paid for income taxes
4,336,000 
211,000 
2,834,000 
1,604,000 
1,826,000 
Number of tax receivable agreements
2 
 
2 
 
 
Applicable tax savings
 
 
85.00% 
 
 
Percentage of remaining tax savings
 
 
15.00% 
 
 
Income tax rate maximum tax liability
3.50% 
 
3.50% 
 
 
Adjustments for New Accounting Principle, Early Adoption |
Restatement Adjustment
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Reclassification of deferred financing cost from other assets to long-term debt
 
 
 
7,294,000 
 
Direct TSG Investors and the Continuing LLC Owners
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Liability payable under tax benefit obligations
 
 
142,000,000 
 
 
Prior to November 7, 2012
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Net cash paid for income taxes
 
 
 
 
4,392,000 
Point Of Sale System [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Cost of revenue
 
 
1,236,000 
3,385,000 
1,107,000 
Placement Services [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Selling, general and administrative
 
 
3,452,000 
2,743,000 
2,245,000 
Area Development Agreements [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Deferred revenue
 
 
10,471,000 
8,215,000 
 
Franchise Fees [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Deferred revenue
 
 
473,000 
205,000 
 
Individual Franchise Agreements [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Franchisee initial term
 
 
10 years 
 
 
Primary vendor for advertising services
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Number of vendors
 
 
1 
1 
1 
Cost of Goods, Product Line [Member] |
Supplier Concentration Risk [Member] |
Vendor One [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Purchases from vendor
 
 
79.00% 
66.00% 
66.00% 
Cost of Goods, Product Line [Member] |
Supplier Concentration Risk [Member] |
Vendor Two [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Purchases from vendor
 
 
18.00% 
25.00% 
27.00% 
Cost of Goods, Product Line [Member] |
Supplier Concentration Risk [Member] |
Primary vendor for advertising services
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Advertising purchases from vendor
 
 
49.00% 
61.00% 
68.00% 
Maximum [Member]
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Insured amount
 
 
$ 250,000,000 
 
 
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Company's Fixed assets (Detail)
12 Months Ended
Dec. 31, 2015
Buildings and Improvements [Member] |
Minimum [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
20 years 
Buildings and Improvements [Member] |
Maximum [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
40 years 
Computer and Equipment [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
3 years 
Furniture and Fixtures [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
5 years 
Leasehold Improvements [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
Useful life or term of lease whichever is shorter 
Equipment [Member] |
Minimum [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
5 years 
Equipment [Member] |
Maximum [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
7 years 
Vehicles [Member]
 
Significant Accounting Policies [Line Items]
 
Property, plant and equipment, estimated useful lives
5 years 
Summary of Significant Accounting Policies - Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring [Member], Interest Rate Cap [Member], USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
 
Interest rate caps
$ 376 
$ 1,147 
$ 1,711 
Significant Other Observable Inputs (Level 2) [Member]
 
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
 
Interest rate caps
$ 376 
$ 1,147 
$ 1,711 
Variable Interest Entities - Carrying Value of Variable Interest Entities of Consolidated Financial Statements (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Variable Interest Entity [Line Items]
 
 
 
Assets
$ 6,815 
$ 6,681 
$ 6,229 
PF Melville [Member]
 
 
 
Variable Interest Entity [Line Items]
 
 
 
Assets
3,790 
3,728 
3,479 
MMR [Member]
 
 
 
Variable Interest Entity [Line Items]
 
 
 
Assets
$ 3,025 
$ 2,953 
$ 2,750 
Variable Interest Entities - Additional Information (Detail) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Variable Interest Entity Consolidated Carrying Amount Assets And Liabilities [Abstract]
 
 
 
Maximum obligation of guarantees of leases and debt
$ 1,730,000 
$ 1,871,000 
$ 2,896,000 
Maximum loss exposure Involvement of estimated value
$ 0 
$ 0 
 
Acquisition - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
0 Months Ended
Mar. 31, 2014
Mar. 31, 2016
Store
Dec. 31, 2015
Store
Mar. 31, 2015
Store
Dec. 31, 2014
Store
Dec. 31, 2013
Store
Dec. 31, 2012
Store
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Number of franchise owned stores
 
1,171 
1,124 
976 
918 
749 
606 
Purchase price consideration before loss incurred
$ 42,931 
 
 
 
 
 
 
Business combination, cash payment
39,931 
 
 
 
 
 
 
Deferred revenue
 
 
26,733 
 
23,879 
 
 
Business combination, purchase price
41,638 
 
 
 
 
 
 
New York [Member]
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Number of franchise owned stores
8 
 
 
 
 
 
 
Equipment Discount [Member]
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Deferred revenue
3,000 
 
2,968 
 
2,689 
 
 
Reacquired Franchise Rights [Member]
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Loss on unfavorable reacquisition of franchise rights
$ 1,293 
 
 
 
 
 
 
Acquisition - Schedule of Allocated Purchase Consideration (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Mar. 31, 2014
Franchisee Acquisition [Member]
Mar. 31, 2014
Franchisee Acquisition [Member]
Reacquired Franchise Rights [Member]
Mar. 31, 2014
Franchisee Acquisition [Member]
Membership Relationships [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Fixed assets
 
 
 
 
$ 7,634 
 
 
Intangible assets
 
 
 
 
 
8,950 
5,882 
Favorable leases, net
 
 
 
 
700 
 
 
Other assets
 
 
 
 
35 
 
 
Goodwill
176,981 
176,981 
176,981 
157,210 
19,771 
 
 
Liabilities assumed, including deferred revenues
 
 
 
 
(1,334)
 
 
Total
 
 
 
 
$ 41,638 
 
 
National Advertising Fund - Additional Information (Detail) (Planet Fitness NAF, LLC [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Planet Fitness NAF, LLC [Member]
 
 
 
Related Party Transaction [Line Items]
 
 
 
Percentage of franchise membership billing revenue
2.00% 
 
 
Initial administrative fees charged
$ 1,340 
$ 1,010 
$ 865 
Notes Receivable - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Receivables
Receivables [Abstract]
 
 
Number of notes receivable
 
2 
Notes receivable maturity date, Start
Jul. 01, 2015 
 
Notes receivable maturity date, End
Feb. 01, 2018 
 
Notes Receivable, Net
$ 0 
 
Property and Equipment - Schedule of Property and Equipments (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
$ 79,664 
$ 65,307 
Accumulated Depreciation
(25,197)
(23,525)
(15,728)
Total
54,302 
56,139 
49,579 
Land [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
910 
910 
Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
27,391 
22,137 
Leasehold Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
38,288 
27,361 
Buildings and Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
5,107 
5,119 
Furniture and Fixtures [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
3,030 
2,309 
Other [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
2,947 
2,096 
Construction in Progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
 
$ 1,991 
$ 5,375 
Property and Equipment - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment [Abstract]
 
 
 
Depreciation expense
$ 11,088 
$ 9,138 
$ 6,171 
Goodwill and Intangible Assets - Summary of Goodwill and Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Mar. 31, 2016
Trade and Brand Names [Member]
Dec. 31, 2015
Trade and Brand Names [Member]
Dec. 31, 2014
Trade and Brand Names [Member]
Mar. 31, 2016
Customer Relationships [Member]
Dec. 31, 2015
Customer Relationships [Member]
Dec. 31, 2014
Customer Relationships [Member]
Mar. 31, 2016
Noncompete Agreements [Member]
Dec. 31, 2015
Noncompete Agreements [Member]
Dec. 31, 2014
Noncompete Agreements [Member]
Mar. 31, 2016
Favorable Leases [Member]
Dec. 31, 2015
Favorable Leases [Member]
Dec. 31, 2014
Favorable Leases [Member]
Mar. 31, 2016
Order Backlog [Member]
Dec. 31, 2015
Order Backlog [Member]
Dec. 31, 2014
Order Backlog [Member]
Mar. 31, 2016
Reacquired Franchise Rights [Member]
Dec. 31, 2015
Reacquired Franchise Rights [Member]
Dec. 31, 2014
Reacquired Franchise Rights [Member]
Goodwill And Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indefinite-lived intangible, Net carrying Amount
 
 
 
 
$ 146,300 
$ 146,300 
$ 146,300 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total intangible assets, Gross carrying amount
347,867 
347,867 
347,867 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average amortization period (years)
 
 
 
 
 
 
 
11 years 1 month 6 days 
11 years 1 month 6 days 
11 years 1 month 6 days 
5 years 
5 years 
5 years 
7 years 6 months 
7 years 6 months 
7 years 6 months 
4 months 24 days 
4 months 24 days 
4 months 24 days 
5 years 9 months 18 days 
5 years 9 months 18 days 
5 years 9 months 18 days 
Total intangible assets, Net carrying Amount
268,679 
273,619 
295,162 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross carrying amount
201,567 
201,567 
201,567 
 
 
 
 
171,782 
171,782 
171,782 
14,500 
14,500 
14,500 
2,935 
2,935 
2,935 
3,400 
3,400 
3,400 
8,950 
8,950 
8,950 
Accumulated amortization
(79,188)
(74,248)
(52,705)
 
 
 
 
(61,469)
(57,741)
(41,130)
(9,852)
(9,127)
(6,229)
(1,354)
(1,256)
(779)
(3,400)
(3,400)
(3,400)
(3,113)
(2,724)
(1,167)
Net carrying Amount
122,379 
127,319 
148,862 
 
 
 
 
110,313 
114,041 
130,652 
4,648 
5,373 
8,271 
1,581 
1,679 
2,156 
 
 
 
5,837 
6,226 
7,783 
Goodwill, Gross carrying amount
176,981 
176,981 
176,981 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill, Net carrying Amount
$ 176,981 
$ 176,981 
$ 176,981 
$ 157,210 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and Intangible Assets - Summary of Changes in Carrying Amount of Goodwill (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Mar. 31, 2016
Dec. 31, 2015
Franchise [Member]
Mar. 31, 2016
Franchise [Member]
Dec. 31, 2013
Franchise [Member]
Dec. 31, 2015
Corporate-owned Stores [Member]
Dec. 31, 2014
Corporate-owned Stores [Member]
Mar. 31, 2016
Corporate-owned Stores [Member]
Dec. 31, 2015
Equipment [Member]
Mar. 31, 2016
Equipment [Member]
Dec. 31, 2013
Equipment [Member]
Goodwill [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
$ 176,981 
$ 157,210 
$ 176,981 
$ 16,938 
$ 16,938 
$ 16,938 
$ 67,377 
$ 47,606 
$ 67,377 
$ 92,666 
$ 92,666 
$ 92,666 
Additions
0 
 
 
0 
 
 
0 
 
 
0 
 
 
Acquisition of franchises
 
19,771 
 
 
 
 
 
19,771 
 
 
 
 
Goodwill
$ 176,981 
$ 176,981 
$ 176,981 
$ 16,938 
$ 16,938 
$ 16,938 
$ 67,377 
$ 67,377 
$ 67,377 
$ 92,666 
$ 92,666 
$ 92,666 
Goodwill and Intangible Assets - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Goodwill And Intangible Assets [Line Items]
 
 
 
 
 
Impairment charges
$ 0 
$ 0 
$ 0 
$ 0 
 
Amortization of intangible assets
4,940,000 
5,383,000 
21,543,000 
23,698,000 
22,883,000 
Favorable And Unfavorable Leases [Member]
 
 
 
 
 
Goodwill And Intangible Assets [Line Items]
 
 
 
 
 
Amortization of intangible assets
$ 99,000 
$ 113,000 
$ 473,000 
$ 495,000 
$ 246,000 
Goodwill and Intangible Assets - Summary of Amortization expenses (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
 
 
 
2016
 
$ 19,756 
 
2017
18,215 
18,215 
 
2018
14,583 
14,583 
 
2019
14,215 
14,215 
 
2020
12,517 
12,517 
 
Thereafter
48,033 
48,033 
 
Net carrying Amount
122,379 
127,319 
148,862 
Remainder of 2016
$ 14,816 
 
 
Long-term Debt - Schedule of Long-term Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Debt Instrument [Line Items]
 
 
 
Total debt, excluding deferred financing costs
$ 491,000 
$ 492,275 
$ 387,075 
Deferred financing costs, net of accumulated amortization
(7,025)
(7,396)
(7,294)
Total debt
483,975 
484,879 
379,781 
Current portion of long-term debt and line of credit
5,100 
5,100 
3,900 
Long-term debt, net of current portion
478,875 
479,779 
375,881 
Term Loan B [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total debt, excluding deferred financing costs
$ 491,000 
$ 492,275 
$ 387,075 
Long-term Debt - Schedule of Long-term Debt (Parenthetical) (Detail)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Term Loan B [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt instrument maturity date
Mar. 31, 2021 
Mar. 31, 2021 
Mar. 31, 2021 
Total rate - base plus spread
4.50% 
4.75% 
4.75% 
Revolving Credit Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt instrument maturity date
Mar. 31, 2019 
Mar. 31, 2019 
Mar. 31, 2019 
Total rate - base plus spread
4.25% 
4.25% 
4.25% 
Long-term Debt - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Mar. 31, 2016
Term Loan B [Member]
Dec. 31, 2015
Term Loan B [Member]
Dec. 31, 2014
Term Loan B [Member]
Mar. 31, 2015
Term Loan B [Member]
Mar. 31, 2014
Term Loan B [Member]
Mar. 31, 2016
Revolving Credit Facility [Member]
Dec. 31, 2015
Revolving Credit Facility [Member]
Dec. 31, 2014
Revolving Credit Facility [Member]
Mar. 31, 2014
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Credit facility expiration period
 
5 years 
 
 
 
 
 
 
 
 
 
Credit facility maximum borrowing capacity
 
$ 430,000,000 
 
 
 
$ 510,000,000 
$ 390,000,000 
 
 
 
$ 40,000,000 
Funds used to pay dividend
140,000,000 
173,900,000 
 
 
 
 
 
 
 
 
 
Credit facility quarterly principal installment payment
 
 
 
1,275,000 
 
 
 
 
 
 
 
Debt instrument maturity date
 
 
Mar. 31, 2021 
Mar. 31, 2021 
Mar. 31, 2021 
 
 
Mar. 31, 2019 
Mar. 31, 2019 
Mar. 31, 2019 
 
Unused portion of credit facility
 
 
 
 
 
 
 
 
$ 40,000,000 
 
 
Long-term Debt - Schedule of Future Annual Payments of Long-term Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Debt Disclosure [Abstract]
 
 
 
2016
 
$ 5,100 
 
Remainder of 2016
3,825 
 
 
2017
5,100 
5,100 
 
2018
5,100 
5,100 
 
2019
5,100 
5,100 
 
2020
5,100 
5,100 
 
Thereafter
466,775 
466,775 
 
Total
$ 491,000 
$ 492,275 
$ 387,075 
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Mar. 31, 2014
Interest Rate Swap Agreements [Member]
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member]
Reclassification out of Accumulated Other Comprehensive Income [Member]
Dec. 31, 2014
Interest Rate Swap Agreements [Member]
Interest Expense [Member]
Sep. 30, 2015
Interest Rate Cap [Member]
Cap
Sep. 30, 2014
Interest Rate Cap [Member]
Mar. 31, 2016
Interest Rate Cap [Member]
Dec. 31, 2015
Interest Rate Cap [Member]
Dec. 31, 2014
Interest Rate Cap [Member]
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
$ 92,000 
 
 
 
 
 
 
Loss related to terminated swap agreements
 
 
 
 
 
248,000 
 
 
 
 
 
Derivative, premium payments
 
 
 
 
 
 
880,000 
2,373,000 
 
 
 
Derivative, notional amount
 
 
 
 
 
 
 
194,000,000 
224,000,000 
238,000,000 
 
Derivative, inception date
 
 
 
 
 
 
Sep. 30, 2015 
Sep. 30, 2014 
 
 
 
Derivative, maturity date
 
 
 
 
 
 
Sep. 30, 2018 
Sep. 29, 2017 
 
 
 
Number of additional caps
 
 
 
 
 
 
2 
 
 
 
 
Derivative, interest rate cap floor
1.50% 
 
1.50% 
 
 
 
 
 
 
 
 
Interest rate caps
 
 
 
 
 
 
 
 
376,000 
1,147,000 
1,711,000 
Unrealized loss on interest rate caps, net of tax
(583,000)
(779,000)
(1,388,000)
(662,000)
 
 
 
 
(583,000)
(1,388,000)
(662,000)
Unrealized loss on interest rate caps, tax
 
 
 
 
 
 
 
 
$ (113,000)
$ (28,000)
 
Deferred Revenue - Schedule of Deferred Revenue (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Prepaid Membership Fees [Member]
Dec. 31, 2014
Prepaid Membership Fees [Member]
Dec. 31, 2015
Enrollment Fees [Member]
Dec. 31, 2014
Enrollment Fees [Member]
Dec. 31, 2015
Equipment Discount [Member]
Dec. 31, 2014
Equipment Discount [Member]
Mar. 31, 2014
Equipment Discount [Member]
Dec. 31, 2015
Annual Membership Fees [Member]
Dec. 31, 2014
Annual Membership Fees [Member]
Dec. 31, 2015
Area Development and Franchise Fees [Member]
Dec. 31, 2014
Area Development and Franchise Fees [Member]
Deferred Revenue Arrangement [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred revenue
 
$ 26,733 
$ 23,879 
$ 5,134 
$ 5,382 
$ 1,555 
$ 1,692 
$ 2,968 
$ 2,689 
$ 3,000 
$ 6,132 
$ 5,696 
$ 10,944 
$ 8,420 
Deferred revenue, long-term portion
10,277 
12,016 
9,330 
 
 
 
 
 
 
 
 
 
 
 
Deferred revenue, current portion
$ 15,477 
$ 14,717 
$ 14,549 
 
 
 
 
 
 
 
 
 
 
 
Deferred Revenue - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Mar. 31, 2016
Dec. 31, 2014
Deferred Revenue Disclosure [Abstract]
 
 
 
Equipment deposits
$ 5,587 
$ 5,253 
$ 6,675 
Deferred revenue expected recognition period
12 months 
 
 
Related Party Transactions - Summary of Amounts Due From Stockholders/Members (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Related Party Transactions [Abstract]
 
 
 
Accounts receivable - related entities
$ 47 
$ 39 
$ 11 
Accounts receivable - stockholders/members
958 
4,901 
1,130 
Due from related parties
1,005 
4,940 
1,141 
Due from related parties, current portion
1,005 
4,940 
1,141 
Due from related parties, net of current portion
 
$ 0 
$ 0 
Related Party Transactions - Schedule of Related Party Transactions (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Related Party Transaction [Line Items]
 
 
 
 
 
Total revenue from related parties
$ 1,014 
$ 317 
$ 2,918 
$ 4,444 
$ 2,475 
Franchise [Member]
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Total revenue from related parties
421 
262 
1,232 
733 
1,620 
Equipment [Member]
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Total revenue from related parties
$ 593 
$ 55 
$ 1,686 
$ 3,711 
$ 855 
Related Party Transactions - Additional Information (Detail) (Direct TSG Investors [Member], USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Related Party Transaction [Line Items]
 
 
 
 
 
Payment for management fee
$ 0 
$ 265 
$ 1,899 
$ 1,211 
$ 1,136 
Liability payable under tax benefit obligations
 
 
140,191 
 
 
Management Agreement Termination
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Management agreement termination fee
 
 
$ 1,000 
 
 
Stockholder's Equity - Additional Information (Detail) (USD $)
3 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
Mar. 31, 2016
Aug. 11, 2015
Continuing LLC Owners [Member]
IPO [Member]
Aug. 11, 2015
Continuing LLC Owners [Member]
IPO [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Mar. 31, 2016
Class A Common Stock [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Aug. 6, 2015
Class A Common Stock [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
Jun. 22, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
IPO [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
IPO [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Investor [Member]
IPO [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Investor [Member]
IPO [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Mar. 31, 2016
Class B Common Stock [Member]
Aug. 6, 2015
Class B Common Stock [Member]
Aug. 5, 2015
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Mar. 31, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Aug. 11, 2015
Class B Common Stock [Member]
Continuing LLC Owners [Member]
IPO [Member]
Jun. 22, 2015
Merger Agreement [Member]
Class A Common Stock [Member]
Direct TSG Investors [Member]
Dec. 31, 2015
Pla-Fit Holdings, LLC [Member]
Class A Common Stock [Member]
Aug. 11, 2015
Pla-Fit Holdings, LLC [Member]
Class A Common Stock [Member]
IPO [Member]
Aug. 11, 2015
Pla-Fit Holdings, LLC [Member]
Class A Common Stock [Member]
Continuing LLC Owners [Member]
IPO [Member]
Aug. 5, 2015
Pla-Fit Holdings, LLC [Member]
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Class Of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares converted
 
 
 
 
 
 
 
 
26,106,930 
 
 
 
 
 
 
 
 
 
 
 
26,106,930 
 
 
 
 
Number of stock issued during period
 
 
 
10,491,000 
 
 
 
5,033,945 
 
21,072,985 
 
15,525,000 
 
(10,491,000)
 
 
72,602,810 
 
 
 
 
 
15,525,000 
10,491,055 
72,602,810 
Common stock dividend and voting rights description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The shares of Class B common stock have no rights to dividends or distributions, whether in cash or stock, but entitle the holder to one vote per share on matters presented to stockholders of the Company. 
The shares of Class B common stock have no rights to dividends or distributions, whether in cash or stock, but entitle the holder to one vote per share on matters presented to stockholders of the Company. 
 
 
 
 
 
 
Convertible stock, conversion description
Following the Merger and the Reclassification, the Company and the Continuing LLC Owners entered into an exchange agreement under which the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate amount of units issued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 156,946,000 
 
Common stock, shares outstanding
 
 
 
36,597,985 
36,597,985 
36,597,985 
0 
 
 
 
 
 
 
62,112,000 
62,067,000 
0 
 
 
 
 
 
 
 
 
 
Reimbursement of IPO expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 7,697 
 
 
 
Percentage of voting power
 
 
 
 
 
 
 
 
 
 
21.40% 
 
15.70% 
 
 
 
 
 
 
62.90% 
 
 
 
 
 
Percentage of economic interest
 
62.90% 
 
 
 
 
 
 
 
21.40% 
 
15.70% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of units held by owners
 
 
62,111,755 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
62,111,755 
 
 
 
 
 
Equity-Based Compensation - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Restricted Stock Units [Member]
Dec. 31, 2015
Stock Options [Member]
Dec. 31, 2015
Class M Units [Member]
Dec. 31, 2014
Class M Units [Member]
Dec. 31, 2013
Class M Units [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Restricted Stock Units [Member]
Dec. 31, 2015
2013 Equity Incentive Plan [Member]
Class M Units [Member]
Dec. 31, 2014
2013 Equity Incentive Plan [Member]
Class M Units [Member]
Dec. 31, 2013
2013 Equity Incentive Plan [Member]
Class M Units [Member]
Dec. 31, 2015
2013 Equity Incentive Plan [Member]
Class M Units [Member]
Tranche One [Member]
Dec. 31, 2015
2013 Equity Incentive Plan [Member]
Class M Units [Member]
IPO [Member]
Tranche One [Member]
Aug. 31, 2015
2015 Omnibus Incentive Plan [Member]
Maximum [Member]
Dec. 31, 2015
2015 Omnibus Incentive Plan [Member]
IPO [Member]
Aug. 31, 2015
2015 Omnibus Incentive Plan [Member]
IPO [Member]
Aug. 31, 2015
2015 Omnibus Incentive Plan [Member]
IPO [Member]
Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation, vest equally over a period
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
 
 
 
 
 
4 years 
 
 
Contractual term in years of stock option awards
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
 
 
 
 
 
 
 
 
Award vesting rights, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
80.00% 
20.00% 
 
 
 
 
Share based compensation, shares vested
 
 
 
 
 
 
 
10.737 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation, shares issued
 
 
 
 
 
 
 
 
 
 
4,238,338 
 
 
 
 
 
 
 
 
 
 
Share based compensation, weighted-average grant date fair value
 
 
 
 
 
 
 
$ 1.52 
 
 
$ 1.52 
 
 
 
 
 
 
 
 
 
 
Stock options, expected recognition, weighted-average period
 
 
 
 
 
2 years 8 months 12 days 
3 years 7 months 6 days 
2 years 4 months 24 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation, compensation expense
 
 
$ 4,731,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation, total unrecognized compensation
 
 
729,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant-date fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
10,047,000 
10,656,000 
 
 
 
 
 
 
Weighted average grant-date fair value of units vested
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 69.052 
$ 24.421 
 
 
 
 
 
 
Share based compensation, options granted to purchase up to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,896,800 
 
 
 
Share based compensation, shares granted to purchase up to
 
 
116,690 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
106,030 
Share based compensation, exercise price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 16.00 
 
Share based compensation, options to purchase additional shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,660 
 
 
Share based compensation, exercise price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 17.50 
 
 
Weighted-average grant date fair value of stock options granted
 
 
$ 6.14 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative
11,845,000 
14,138,000 
55,573,000 
35,121,000 
23,118,000 
26,000 
131,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options outstanding
 
 
108,270 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options, exercisable, number
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate intrinsic value of stock options outstanding
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures
 
 
514,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation, shares granted
 
 
 
 
 
 
 
 
121.051 
431.577 
 
8,160 
 
 
 
 
 
 
 
 
 
Weighted-average grant date fair value of restricted stock granted
 
 
 
 
 
$ 18.38 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RSUs outstanding
 
 
 
 
 
8,160 
 
 
505.260 
431.577 
 
 
 
 
 
 
 
 
 
 
 
RSUs, exercisable, number
 
 
 
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures
 
 
 
 
 
$ 124 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-Based Compensation - Fair Value of Stock Option Awards Determined on Grant Date Using Monte Carlo Valuation Model (Detail)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Class M Units [Member]
Dec. 31, 2013
Class M Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
Expected term (years)
6 years 3 months 
1 year 8 months 12 days 
3 years 8 months 12 days 
Expected volatility
35.40% 
36.80% 
39.40% 
Risk-free interest rate
1.82% 
0.40% 
0.80% 
Equity-Based Compensation - Summary of Class M Unit Activity (Detail) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Class M Units [Member]
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
Units Outstanding at beginning of period
505.260 
431.577 
 
Units granted
 
121.051 
431.577 
Units forfeited
(21.053)
(47.368)
 
Units converted upon IPO
(484.207)
 
 
Units Outstanding at end of period
 
505.260 
431.577 
Units Outstanding at end of period
 
505.260 
431.577 
Weighted average grant date fair value, Units converted upon IPO
$ 1.52 
 
 
Weighted average grant date fair value, Outstanding at end of period
$ 1.52 
 
 
Weighted average grant date fair value, Vested or expected to vest
$ 1.52 
 
 
Holdings Units [Member]
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
Units converted upon IPO
4,238,338 
 
 
Units Outstanding at end of period
4,238,338 
 
 
Units Outstanding at end of period
4,238,338 
 
 
Units Vested or expected to vest
4,238,338 
 
 
Equity-Based Compensation - Fair Value of Stock Option Awards Determined on Grant Date Using Black-Scholes Valuation Model (Detail)
12 Months Ended
Dec. 31, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
 
Expected term (years)
6 years 3 months 
Expected volatility
35.40% 
Risk-free interest rate
1.82% 
Equity-Based Compensation - Summary of Stock Option Activity (Detail) (USD $)
12 Months Ended
Dec. 31, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
 
Stock Options, Granted
116,690 
Stock Options, Forfeited
(8,420)
Stock Options, Outstanding at end of period
108,270 
Stock Options, Vested or expected to vest
104,769 
Weighted average exercise price, Granted
$ 16.14 
Weighted average exercise price, Forfeited
$ 16.00 
Weighted average exercise price, Outstanding at end of period
$ 16.15 
Weighted average exercise price, Vested or expected to vest
$ 16.15 
Weighted average remaining contractual term (years), Outstanding at end of period
9 years 7 months 6 days 
Weighted average remaining contractual term (years), Vested or expected to vest
9 years 7 months 6 days 
Earnings per share - Additional Information (Detail)
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Stock Options [Member]
Dec. 31, 2015
Stock Options [Member]
Mar. 31, 2016
Restricted Stock Units [Member]
Dec. 31, 2015
Restricted Stock Units [Member]
Mar. 31, 2016
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Aug. 6, 2015
Class A Common Stock [Member]
Mar. 31, 2016
Class B Common Stock [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Aug. 6, 2015
Class B Common Stock [Member]
Earnings Per Share Diluted [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares outstanding
 
 
 
 
36,597,985 
36,597,985 
36,597,985 
0 
62,067,000 
62,112,000 
0 
Anti-dilutive securities excluded from the calculation of earnings per share
134,870 
108,270 
8,160 
8,160 
 
 
 
 
 
 
 
Earnings per share - Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 5 Months Ended 12 Months Ended 2 Months Ended 3 Months Ended 5 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Sep. 30, 2015
Class A Common Stock [Member]
Mar. 31, 2016
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$ 16,345 
$ 17,240 
$ 737 
$ 11,612 
$ 8,538 
 
 
 
 
$ 23,454 
$ 38,130 
$ 37,295 
$ 25,799 
 
 
 
 
 
Less: net income attributable to non-controlling interests
12,977 
 
 
 
113 
 
 
 
 
19,348 
19,612 
487 
361 
 
 
 
 
 
Net income attributable to Planet Fitness, Inc.
$ 3,368 
 
 
 
$ 8,425 
$ 13,783 
$ 8,303 
$ 8,950 
$ 6,259 
$ 4,106 
$ 18,518 
$ 36,808 
$ 25,438 
 
 
 
 
 
Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding-basic
 
 
 
 
 
 
 
 
 
 
 
 
 
 
36,597,985 
 
36,243,557 
 
Earnings per share of Class A common stock-basic
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.05 
 
$ 0.06 
$ 0.11 
 
Earnings per share of Class A common stock-basic & diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.09 1
 
 
$ 0.11 2
Income Taxes - Schedule of Income Before Provision for Income Taxes (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
Domestic
$ 48,716 
$ 39,534 
$ 26,432 
Foreign
(1,438)
(1,056)
 
Total current tax expense
$ 47,278 
$ 38,478 
$ 26,432 
Income Taxes - Schedule of Provision (Benefit) for Income Taxes Expenses (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Current:
 
 
 
 
 
Federal
 
 
$ 686 
 
 
State
 
 
2,188 
1,078 
2,063 
Foreign
 
 
139 
168 
 
Total current tax expense
 
 
3,013 
1,246 
2,063 
Deferred:
 
 
 
 
 
Federal
 
 
5,636 
 
 
State
 
 
935 
217 
(1,430)
Foreign
 
 
(436)
(280)
 
Total deferred tax (benefit) expense
1,354 
7 
6,135 
(63)
(1,430)
Provision for income taxes
$ 3,291 
$ 272 
$ 9,148 
$ 1,183 
$ 633 
Income Taxes - Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Tax Rate (Detail)
12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
U.S. statutory tax rate
35.00% 
State and local taxes, net of federal benefit
6.20% 
Rate change on deferred tax asset from recapitalization
6.90% 
Tax benefit arrangement liability adjustment
(2.10%)
Foreign tax rate differential
0.30% 
Withholding taxes and other
0.20% 
Income attributable to non-controlling interests
(27.10%)
Effective tax rate
19.40% 
Income Taxes - Additional information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Agreement
Dec. 31, 2015
Agreement
Dec. 31, 2014
Tax Credit Carryforward [Line Items]
 
 
 
Effective income tax rate
39.40% 
39.40% 
 
Effective income tax rate reconciliation at U.S. federal and state income tax
37.10% 
37.10% 
 
Effective income tax rate reconciliation noncontrolling interest
2.50% 
2.50% 
 
Effective income tax rate income before taxes excluding variable interest
62.90% 
62.90% 
 
Total liability related to uncertain tax positions
$ 300 
$ 300 
$ 300 
Portion of unrecognized tax benefit, if recognized would reduce income tax expense
 
300 
 
Number of tax receivable agreements
2 
2 
 
Applicable percentage of cash savings
85.00% 
85.00% 
 
Percentage of remaining tax savings
15.00% 
15.00% 
 
Income tax rate maximum tax liability
3.50% 
3.50% 
 
Other income reflecting reduction in tax benefit obligation
 
2,549 
 
Tax benefit obligation
138,078 
140,191 
 
Net deferred tax assets
115,523 
117,358 
 
Canada [Member]
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Net operating loss carryforwards
$ 2,411 
$ 716 
 
Operating loss carryforwards, expiration date
2034 
2034 
 
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Deferred tax assets:
 
 
 
Accrued expense and reserves
 
$ 353 
$ 75 
Deferred revenue
 
1,276 
182 
Goodwill and intangible assets
 
113,460 
 
Net operating loss
 
716 
280 
Other
 
2,841 
85 
Deferred tax assets
 
118,646 
622 
Deferred tax liabilities:
 
 
 
Prepaid expenses
 
(674)
(94)
Goodwill and intangible assets
 
 
(717)
Property and equipment
 
(614)
(154)
Total deferred tax liabilities
 
(1,288)
(965)
Total deferred tax assets
115,523 
117,358 
 
Total deferred tax (liabilities)
 
 
$ (343)
Income Taxes - Schedule of Future Payments Under Tax Benefit Arrangements (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Income Tax Contingency [Line Items]
 
 
Total
$ 138,078 
$ 140,191 
IPO [Member]
 
 
Income Tax Contingency [Line Items]
 
 
2016
 
3,019 
Remainder of 2016
906 
 
2017
7,389 
7,125 
2018
7,336 
7,072 
2019
7,389 
7,125 
2020
7,585 
7,321 
Thereafter
107,473 
108,529 
Total
$ 138,078 
$ 140,191 
Commitments and Contingencies - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Mar. 31, 2016
Commitment And Contingencies [Line Items]
 
 
 
 
Rental expense
$ 18,186,000 
$ 16,980,000 
$ 13,830,000 
 
Maximum obligation of guarantees of leases and debt
1,871,000 
2,896,000 
 
1,730,000 
Accrued potential obligation recorded under guaranty arrangement
0 
0 
 
 
2013 Performance Incentive Plan [Member]
 
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
 
Bonuses and recorded expense
 
 
1,688,000 
 
Advertising Purchase Commitment [Member]
 
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
 
Purchase commitments
15,530,000 
 
 
 
Equipment Purchase Commitment [Member]
 
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
 
Purchase commitments
$ 14,361,000 
 
 
 
Commitments and Contingencies - Schedule of Future Commitments Under Noncancelable Operating Leases (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
 
2016
$ 13,272 
2017
12,700 
2018
11,738 
2019
10,325 
2020
9,245 
Thereafter
44,802 
Total
$ 102,082 
Retirement Plan - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]
 
 
 
Percentage of employer matching contribution
100.00% 
 
 
Maximum percentage of employee contribution
4.00% 
 
 
Total employer matching contributions expense
$ 384 
$ 211 
$ 214 
Segments - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Segment
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Segments
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Number of reportable segments
3 
 
 
 
 
 
 
 
 
3 
 
 
Number of operating segments
0 
 
 
 
 
 
 
 
 
0 
 
 
Description of factors used to identify entity's reportable segments
No operating segments aggregated to arrive at the Company’s reportable segments. 
 
 
 
 
 
 
 
 
No operating segments aggregated to arrive at the Company's reportable segments. 
 
 
Revenue
$ 83,343,000 
$ 105,845,000 
$ 68,817,000 
$ 78,952,000 
$ 76,922,000 
$ 96,019,000 
$ 63,467,000 
$ 62,697,000 
$ 57,594,000 
$ 330,537,000 
$ 279,777,000 
$ 211,009,000 
Intersegment Eliminations [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
0 
 
 
 
 
 
 
 
 
 
 
 
Corporate-owned Stores [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
25,697,000 
 
 
 
23,546,000 
 
 
 
 
98,390,000 
85,041,000 
67,364,000 
Corporate-owned Stores [Member] |
Canada [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Long-lived assets
3,239,000 
3,149,000 
 
 
 
2,011,000 
 
 
 
3,149,000 
2,011,000 
 
Franchise [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
27,677,000 
 
 
 
21,757,000 
 
 
 
 
88,085,000 
71,806,000 
44,157,000 
Franchise [Member] |
Placement Services [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 2,075,000 
 
 
 
$ 1,974,000 
 
 
 
 
$ 9,806,000 
$ 8,450,000 
$ 6,315,000 
Segments - Summary of Financial Information for the Company's Reportable Segments (Detail) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 83,343,000 
$ 105,845,000 
$ 68,817,000 
$ 78,952,000 
$ 76,922,000 
$ 96,019,000 
$ 63,467,000 
$ 62,697,000 
$ 57,594,000 
$ 330,537,000 
$ 279,777,000 
$ 211,009,000 
Total Segment EBITDA
33,706,000 
 
 
 
21,767,000 
 
 
 
 
103,985,000 
92,619,000 
64,152,000 
Franchise [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
27,677,000 
 
 
 
21,757,000 
 
 
 
 
88,085,000 
71,806,000 
44,157,000 
Franchise [Member] |
US [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
27,230,000 
 
 
 
21,757,000 
 
 
 
 
87,299,000 
71,806,000 
44,157,000 
Franchise [Member] |
International [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
447,000 
 
 
 
 
 
 
 
 
786,000 
 
 
Corporate-owned Stores [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
25,697,000 
 
 
 
23,546,000 
 
 
 
 
98,390,000 
85,041,000 
67,364,000 
Corporate-owned Stores [Member] |
US [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
24,698,000 
 
 
 
23,270,000 
 
 
 
 
95,459,000 
85,022,000 
67,364,000 
Corporate-owned Stores [Member] |
International [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
999,000 
 
 
 
276,000 
 
 
 
 
2,931,000 
19,000 
 
Equipment [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
83,343,000 
 
 
 
76,922,000 
 
 
 
 
330,537,000 
279,777,000 
211,009,000 
Equipment [Member] |
US [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
29,969,000 
 
 
 
31,619,000 
 
 
 
 
144,062,000 
122,930,000 
99,488,000 
Equipment [Member] |
International [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
29,969,000 
 
 
 
31,619,000 
 
 
 
 
144,062,000 
122,930,000 
99,488,000 
Operating Segments [Member] |
Franchise [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment EBITDA
23,813,000 
 
 
 
13,578,000 
 
 
 
 
66,030,000 
53,109,000 
30,123,000 
Operating Segments [Member] |
Corporate-owned Stores [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment EBITDA
10,162,000 
 
 
 
7,798,000 
 
 
 
 
36,070,000 
31,705,000 
21,742,000 
Operating Segments [Member] |
Equipment [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment EBITDA
6,318,000 
 
 
 
6,763,000 
 
 
 
 
31,936,000 
26,447,000 
19,791,000 
Corporate And Other Non Segment [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment EBITDA
$ (6,587,000)
 
 
 
$ (6,372,000)
 
 
 
 
$ (30,051,000)
$ (18,642,000)
$ (7,504,000)
Segments - Reconciliation of Total Segment EBITDA to Income Before Taxes (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment EBITDA
$ 33,706 
 
 
 
$ 21,767 
 
 
 
 
$ 103,985 
$ 92,619 
$ 64,152 
Depreciation and amortization
7,703 
 
 
 
8,201 
 
 
 
 
32,158 
32,341 
28,808 
Other expense
393 
 
 
 
(736)
 
 
 
 
(275)
(1,261)
(694)
Income from operations
25,610 
28,793 
10,338 
18,667 
14,302 
19,338 
13,956 
14,706 
13,539 
72,102 
61,539 
36,038 
Interest expense, net
(6,367)
 
 
 
(4,756)
 
 
 
 
(24,549)
(21,800)
(8,912)
Income before income taxes
$ 19,636 
 
 
 
$ 8,810 
 
 
 
 
$ 47,278 
$ 38,478 
$ 26,432 
Segments - Summary of Company's Assets by Reportable Segment (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total consolidated assets
$ 685,666 
$ 699,177 
$ 601,982 
Unallocated [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total consolidated assets
126,471 
132,392 
6,762 
Franchise [Member] |
Operating Segments [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total consolidated assets
214,464 
206,997 
216,985 
Corporate-owned Stores [Member] |
Operating Segments [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total consolidated assets
151,470 
151,620 
157,868 
Equipment [Member] |
Operating Segments [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total consolidated assets
$ 193,261 
$ 208,168 
$ 220,367 
Segments - Summary of Company's Goodwill by Reportable Segment (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting, Other Significant Reconciling Item [Line Items]
 
 
 
 
Goodwill, Net carrying Amount
$ 176,981 
$ 176,981 
$ 176,981 
$ 157,210 
Franchise [Member]
 
 
 
 
Segment Reporting, Other Significant Reconciling Item [Line Items]
 
 
 
 
Goodwill, Net carrying Amount
16,938 
16,938 
16,938 
16,938 
Corporate-owned Stores [Member]
 
 
 
 
Segment Reporting, Other Significant Reconciling Item [Line Items]
 
 
 
 
Goodwill, Net carrying Amount
67,377 
67,377 
67,377 
47,606 
Equipment [Member]
 
 
 
 
Segment Reporting, Other Significant Reconciling Item [Line Items]
 
 
 
 
Goodwill, Net carrying Amount
$ 92,666 
$ 92,666 
$ 92,666 
$ 92,666 
Corporate-owned and Franchisee-owned Stores - Schedule of Changes in Corporate-owned and Franchisee-owned Stores (Detail)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Store
Mar. 31, 2015
Store
Dec. 31, 2015
Store
Dec. 31, 2014
Store
Dec. 31, 2013
Store
Franchisor Disclosure [Line Items]
 
 
 
 
 
Stores operated at beginning of period
1,124 
918 
918 
749 
606 
New stores opened
48 
61 
209 
171 
149 
Stores debranded or consolidated
(1)1
(3)1
(3)2
(2)2
(6)2
Stores operated at end of period
1,171 
976 
1,124 
918 
749 
Franchisee-Owned Stores [Member]
 
 
 
 
 
Franchisor Disclosure [Line Items]
 
 
 
 
 
Stores operated at beginning of period
1,066 
863 
863 
704 
562 
New stores opened
48 
59 
206 
169 
148 
Stores debranded or consolidated
(1)1
(3)1
(3)2
(10)2
(6)2
Stores operated at end of period
1,113 
919 
1,066 
863 
704 
Corporate-Owned Stores [Member]
 
 
 
 
 
Franchisor Disclosure [Line Items]
 
 
 
 
 
Stores operated at beginning of period
 
55 
55 
45 
44 
New stores opened
 
2 
3 
2 
1 
Stores acquired from franchisees
 
 
 
8 
 
Stores operated at end of period
58 
57 
58 
55 
45 
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data (Detail) (USD $)
3 Months Ended 5 Months Ended 12 Months Ended 3 Months Ended 2 Months Ended 3 Months Ended 5 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Mar. 31, 2015
Scenario, Previously Reported [Member]
Sep. 30, 2015
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Quarterly Financial Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 83,343,000 
$ 105,845,000 
$ 68,817,000 
$ 78,952,000 
$ 76,922,000 
$ 96,019,000 
$ 63,467,000 
$ 62,697,000 
$ 57,594,000 
 
$ 330,537,000 
$ 279,777,000 
$ 211,009,000 
$ 76,923,000 
 
 
 
Income from operations
25,610,000 
28,793,000 
10,338,000 
18,667,000 
14,302,000 
19,338,000 
13,956,000 
14,706,000 
13,539,000 
 
72,102,000 
61,539,000 
36,038,000 
14,304,000 
 
 
 
Net income
16,345,000 
17,240,000 
737,000 
11,612,000 
8,538,000 
 
 
 
 
23,454,000 
38,130,000 
37,295,000 
25,799,000 
8,541,000 
 
 
 
Net income
$ 3,368,000 
 
 
 
$ 8,425,000 
$ 13,783,000 
$ 8,303,000 
$ 8,950,000 
$ 6,259,000 
$ 4,106,000 
$ 18,518,000 
$ 36,808,000 
$ 25,438,000 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class A - Basic
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.05 
$ 0.06 
$ 0.11 
Class A - Diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.04 
$ 0.06 
 
Supplemental pro Forma (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 5 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Pro Forma Financial Information [Line Items]
 
 
 
 
 
 
 
 
 
 
Pro forma net income attributable to Planet Fitness, Inc.
$ 3,368 
$ 8,425 
$ 13,783 
$ 8,303 
$ 8,950 
$ 6,259 
$ 4,106 
$ 18,518 
$ 36,808 
$ 25,438 
Class A Common Stock [Member]
 
 
 
 
 
 
 
 
 
 
Pro forma weighted average shares of Class A common stock-basic and diluted (thousands)
 
 
 
 
 
 
 
 
 
 
Pro forma net income per share-basic and diluted
$ 0.09 1
 
 
 
 
 
 
$ 0.11 2
 
 
Weighted-average shares of Class A common stock outstanding:
 
 
 
 
 
 
 
 
 
 
Pro forma weighted average shares of Class A common stock - basic and diluted
36,598 1
 
 
 
 
 
 
36,244 2
 
 
Pro Forma [Member]
 
 
 
 
 
 
 
 
 
 
Pro Forma Financial Information [Line Items]
 
 
 
 
 
 
 
 
 
 
Pro forma net income attributable to Planet Fitness, Inc.
 
$ 1,415 
 
 
 
 
 
$ 6,405 
 
 
Pro Forma [Member] |
Class A Common Stock [Member]
 
 
 
 
 
 
 
 
 
 
Pro forma weighted average shares of Class A common stock-basic and diluted (thousands)
 
 
 
 
 
 
 
 
 
 
Pro forma net income per share-basic and diluted
 
$ 0.04 
 
 
 
 
 
$ 0.17 
 
 
Weighted-average shares of Class A common stock outstanding:
 
 
 
 
 
 
 
 
 
 
Pro forma weighted average shares of Class A common stock - basic and diluted
 
36,598 
 
 
 
 
 
36,598 
 
 
Proforma Financial Information - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Mar. 31, 2016
Pla-Fit Holdings, LLC [Member]
Dec. 31, 2015
Pla-Fit Holdings, LLC [Member]
Aug. 5, 2015
Pla-Fit Holdings, LLC [Member]
Mar. 31, 2015
Pro Forma [Member]
Dec. 31, 2015
Pro Forma [Member]
Mar. 31, 2015
Pro Forma [Member]
Pla-Fit Holdings, LLC [Member]
Dec. 31, 2015
Pro Forma [Member]
Pla-Fit Holdings, LLC [Member]
Mar. 31, 2015
Minority Interest [Member]
Pro Forma [Member]
Dec. 31, 2015
Minority Interest [Member]
Pro Forma [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Pro Forma [Member]
Mar. 31, 2015
Class A Common Stock [Member]
Pro Forma [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Pro Forma [Member]
Pla-Fit Holdings, LLC [Member]
Mar. 31, 2015
Class A Common Stock [Member]
Pro Forma [Member]
Pla-Fit Holdings, LLC [Member]
Economic Ownership ratio, percentage
 
 
 
 
 
100.00% 
100.00% 
100.00% 
 
 
 
 
 
 
 
 
37.10% 
37.10% 
Non controlling Income ratio, Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
62.90% 
62.90% 
 
 
Effective tax rate
 
 
19.40% 
 
 
 
 
 
39.40% 
39.40% 
 
 
2.50% 
2.50% 
 
 
 
 
Percentage of tax application
 
 
 
 
 
 
 
 
 
 
37.10% 
37.10% 
62.90% 
62.90% 
 
 
 
 
Provision for income taxes
$ 3,291 
$ 272 
$ 9,148 
$ 1,183 
$ 633 
 
 
 
$ 1,190 
$ 10,036 
 
 
 
 
 
 
 
 
Subsequent Events - Additional Information (Detail) (Subsequent Event [Member], Class A Common Stock [Member], Maximum [Member], USD $)
May 10, 2016
Subsequent Event [Member] |
Class A Common Stock [Member] |
Maximum [Member]
 
Subsequent Event [Line Items]
 
Stock buyback program, authorized amount
$ 20,000,000