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Planet Fitness (NYSE:PLNT) shares tumbled Thursday after The Bear Cave, a research newsletter, released a report on the gym franchise claiming the company has taken advantage of customers.
The newsletter states that while many investors believe Planet Fitness has room to grow, “The Bear Cave doesn’t.”
They state that via multiple Freedom of Information Act requests, it has uncovered hundreds of consumer complaints about overbilling, fraudulent transactions, excessive fees, and uncancellable memberships.
There is a pattern of misconduct, alleges TBC. These are said to include aspects such as Planet Fitness ignoring multiple customer cancellation letters, in-person cancellation attempts being ignored, billing being resumed post-cancelations, spurious fees, and the company preventing customers from canceling because they owe a back balance.
Furthermore, they claim Planet Fitness made a bogus investor presentation slide to “obscure franchisee saturation.”
“After reviewing the evidence, The Bear Cave is left wondering whether Planet Fitness is actually a thriving gym franchise or an illegal billing operation with gyms on the side,” the newsletter reads.
Planet Fitness shares are down around 3.3% at the time of writing.
