Hopefully, we can get things back on track and get this franchisees, take care of them and make sure that the staff and members are all happy with all our cleaning and things we're doing. As the third quarter got under way and consumer settlement begin to shift with the uptick of COVID-19 cases across the country, we are seeing a pent-up demand taper off and joint starting to stabilize as clubs have been open longer. They walked around. So after that June 17 billing, we begin to see that spike. I want to just ask, firstly, the recent trend you highlighted in the membership, with more of the headlines impacting the business in July here. And I think the only other thing I'd add, as we've talked about before, we've been in touch with lenders and through these franchise business reviews to the extent that a franchisee had really a modest amount of debt from a leverage standpoint. We are open 24/7. Yes. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Are these more rural stores? The overall health of our franchisees remains a top priority for us. Canada has had increased joint less cancels and lack of a lot more usage up there than the U.S. stores. I think, Sharon, what I'd add to that is that it's Tom makes a good point in states like California, where clubs are shut down or even states where we haven't been able to open again, like in North Carolina, as an example, those franchisees are being very cautious about going out and either reequipping the club or certainly starting construction on a brand-new site, because we're really not knowing kind of what the potential end game would look like. Your line is open. And so when you throw the pandemic during a time period of where you're in the middle of a presale, and you maybe can't even finish it, close down, then you open back up, you didn't really get kind of that initial bump. These are fees received from online new member sign-ups and the recognition of fees paid to us for franchise agreements, area development agreement and the transfer of existing stores and fees received from processing dues. Sure. What I'd say is that, we don't disclose like how many leases are signed and at what stages they're at in the construction phase. So I think that's probably more of it is just getting them in the initial the first time. Yes. Sure. When stores are closed and we don't draft monthly membership dues or don't execute a full draft upon reopening because members have credits to utilize from prior periods, they are not included in the comparable store base and therefore, are not included in the same-store sales calculation for that month. Your next question comes from the line of John Ivankoe of JPMorgan. I think the ads question, I think the bigger question now is back to what I just mentioned here is from an acquisition standpoint, are we going to be able to drive a lot of high acquisition join on exploration dates, for example, is it just more rebranding and reassurance messaging, which is yet to be seen. I'll talk about joining the cancels and Tamica fill in on the part there. While the near-term operating environment is likely to remain volatile and negatively affect our near-term revenue and profitability, I'm confident in the long run, once the pandemic is behind us, that Planet Fitness will be able to significantly widen our competitive moat for several reasons. Planet 13's mission is to build a recognizable global brand known for world-class dispensary operations and a creator of innovative cannabis products. Now this situation is even worse, right? I mean, if you go through a period of three, four months or longer for close to 600 stores are closed, they're going to take a time period to try to build back some of their cash reserves before they start really plowing back into it in a big way. I mean the reason be cancellations, generally, people are using the workouts or facilities. So we've got some good financials and updates there. So if we look at as we've always talked about, we take us and LA Fitness and 24 Hour Fitness and put them all together, you're lucky if you get to 3,000 or 4,000 stores. So we want to make sure that people begin to work out and take get some benefit there for sure. So I think there's definitely some opportunity there for us from a Planet Fitness system for sure in that world. Some of that is, to my last comment, is literally in timing and that their site setting out there that franchisees are waiting until they know that their clubs are going to be able to be open, and they'll be able to continue the construction side and get it closed. But based on what we see, we definitely think that there's more to do with billing cycles and the kicking in and restarting of the billing of the members. So I think more or less is going to be just how can we drive the messaging and the marketing because not only is it reassuring potential members. So a lot of noise is going on. When the gym opens, and then it starts to ramp up for that. I mean, cancels, first and foremost, we got to make sure people not using the club. Planet Fitness Inc (NYSE:PLNT)Q2 2020 Earnings CallAug 4, 2020, 4:30 p.m. We also recently released new features of functionality, including in-app messaging, allowing us to communicate to our members via the app. Yes. So there's definitely a key piece is the longer they've been open. So they might not have all their stores open, but they've got half their portfolio open. We've talked to them directly, as I said, and the franchisees are obviously in touch with them. And they took a hard look at their kind of their headquarter's SG&A and started cutting expenses there. Included in the equipment revenues for the quarter was a decrease of $1.8 million related to the additional discount. I'll start. In the second quarter, we had 14 new store equipment placements, which was down 41 from the prior year period. The lenders across the board have said they will they are being accommodating. 0, nothing at all. The other factor in there is that the last time we had billed the annual fee was on March 1. Tom Fitzgerald -- Chief Financial Officer. Also within the franchise segment revenue was our placement revenue, which was $0.9 million in the second quarter compared to $5.1 million a year ago. It's I think it's still going to take a little bit of time to get kind of to the other side of this to see how fast they might try to get their development schedule back opening. And I think we're fortunate in as Chris said, in his prepared remarks, 75% of our stores our franchise stores our owned by franchisees who operate in more than one state. That is all the questions we have time for today. and how you're thinking about that trajectory? For some context, we reported 53 consecutive quarters of positive same-store sales before COVID-19 hit in March and shut down all of our stores. Any perspective on whether what you've seen in July? Of the decline in growth in June from Q1 levels, approximately 85% was due to a drop in net member growth and the balance being a decrease in rate growth. Yes, Ray, this is Dorvin. Since the majority of our corporate stores were still closed in Q2, the $9.4 million of revenue includes the recognition of annual dues previously collected and $1.8 million of revenue deferrals from stores closed after the March draft due to COVID-19 and recognized in the second quarter. You mentioned that the average across the store base that's open is about 60%. First, royalty revenue, which consists of royalties on monthly membership dues and annual membership fees, was $14.9 million compared to $48.9 million in the same quarter of last year. But and I think Tom may have made a comment in his remarks a little bit ago that one of the issues, at the moment, is that landlords are spending a lot of their time dealing with franchisees in our business and other businesses that pushed them hard on abatements and deferrals, etc. Replacement equipment sales in Q2 were $2.7 million compared to $42.5 million in Q2 last year. I mean, it's one quarter. Cision Distribution 888-776-0942 Market data powered by FactSet and Web Financial Group. So I think as long as our promotional windows can line up, based on what's going on in the world, then we should it should not follow the same trend that we just discussed, but it's just a matter of what the marketing calendar what makes sense from a marketing calendar based on what's going on. When you think of your system, and we can see the pressure on your own company segment, just any perspective on the pressure that your franchisee base is feeling today? So we got a lot of people trading down from higher-priced clubs, but the sophistication in our system at that point was a very it was a lot a lot harder to weather that kind of storm. When you say profitable, do you mean across the stores that are reopened? But I think driving demand is definitely going to be a big piece of what we need to do. And in most cases, the longer ones have been opened, is also the ones that the states are less. At this time, I would like to welcome everyone to the Planet Fitness Second Quarter 2020 Earnings Call. Our systemwide Black Card penetration rate in Q2 was 61.1%, a 40 basis point decrease compared to the prior year period. I mean, what are you seeing in terms of any uptick in planned replacements or new club openings in the back half?

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