As of last week, everything is going fairly well for Chris Rondeau. Planet Fitness’s chief executive oversaw an expansion of the business; it has opened new locations, registered sales growth, and introduced significant new investments. Then, everything was put to rest the weekend of last week after the firm’s Board of Directors ordered Rondeau to quit as the CEO.
Chris Rondeau’s Career at Planet Fitness
The boss was the furniture element since the beginning of time: he started working for the company’s initial headquarters in New Hampshire 30 years ago before ascending to CEO in 2013.
However, despite his apparent unshakeable status within the company, Rondeau was ousted last week during what the company declared a “transition into a new leader.”
Craig R. Benson, one of the members of the firm’s present board of directors, has been named interim chief executive officer.
The following week, Rondeau said he was “seriously stunned” at the revelations and told Insider that he didn’t understand why he was told to resign.
He said in a letter to reporters: “I wasn’t finished. I had the most amazing team of franchisees and an incredible business.”
Rondeau’s separation contract prohibits him from discussing anyone except those in departments such as the Legal and Human Resources departments, who could be approached with concerns “about his employment, or after his work with the organization,” According to Insider.
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The Unexpected CEO Resignation
In the end, Rondeau could regain his corner office.
In the wake of the news of Rondeau’s resignation, Planet Fitness announced that Rondeau’s ousted CEO is expected to be elected during the 2024 annual gathering.
Rondeau is also expected to keep his pulse to the beat of the company even though he is no longer CEO. Planet Fitness revealed that the exec continues to assist the business as an “advisory function” to ensure an easy leadership transition. Planet Fitness referred Fortune to the same press release when they were contacted to respond.
Wall Street wobble
Investors still determining the company’s future withdrew their money from Planet Fitness stock as the announcement was made public. Planet Fitness’s price dropped 15 percent to $50, the lowest since the floor for pandemics in August of 2020.
“The management changes are not due to any major or sudden financial developments,” Planet Fitness said in the wake of Rondeau’s resignation.
And Rondeau was indeed in charge of pleasing results in its latest update for investors.
In its 2nd quarter 2023 earnings conference, the CEO, who was then in charge, revealed the chain’s fitness center was affordable and had greater than 18.4 million clients, as well as an 8.7 percent growth in sales at the same store.
The site has increased its global number by 26 percent to 2,472 in the second quarter. It increased membership to more than 300,000. Gen Z is leading the way for sign-ups. It signals that the company is already reaching out to future customers.
The good news is offset by a few economic woes that other retailers and service providers are struggling with. Rondeau said to analysts on the phone that the cost of building gyms is rising, which is up by 25% when compared with the epidemic.
Locations that are suitable for business have become increasingly difficult to locate. He said, “We’re seeing that 16 percent decrease in the vacant percentage of retail spaces compared to before the pandemic. It makes it more challenging for our franchisees to find the perfect place in the proper area.”
“An edgy workplace”
In 2021, Planet Fitness agreed to an agreement with an ex-X Planet Fitness manager, Casey Willard, who had filed a complaint against the business, claiming Planet Fitness was a “debaucherous” atmosphere filled with harassment.
In the course of a business trip in 2017. Willard stated that she was assaulted by a manager of the company and his close friends. She then reported the incident to the police as well as the business.
Rondeau’s Denial of Allegations
Willard also alleged a manager initiated a relationship with her and that a culture of drinking during work hours was encouraged–sometimes she was drunk, following her manager’s lead, by 11 a.m.
The time was when Planet Fitness said it had looked into the allegations, resulting in firing one of its employees for violating the corporate policy and removing the contract of Willard’s manager.
The company disputed the other claims by describing them as “baseless.”
Willard said that Rondeau also had connections with subordinates. Which the former president categorically disproves. He said to Insider: “Absolutely not on my child’s behalf.”