What’s it like to be the owner of a CrossFit gym? Interview with an Affiliate Part 1

As CrossFit has grown, so has the number of folks securing “CrossFit Anytown” domain names and rushing to open their doors.  I have had a few frustrating consultations with folks who have been training CF (as in themselves doing the main page workouts) for less than 6 months, yet they were ready to open an affiliate…NOW!

I get the sense of urgency…let’s face it, the microgym trend is burgeoning.  And I get that folks want on the bandwagon sooner than later.  But I’m not convinced folks are doing their due diligence and as a consequence many are suffering more than they should.  A friend of mine in a small Oregon community commented to me on the phone that there have been 2 or 3 well funded (in his estimation to the tune of $100K each) CF affiliates open in his town that have survived less than a year.

There are also numerous examples of urban areas with upwards of 15 affiliates within a 15 mile radius with new gyms opening sometimes 800 yards from an existing gym. Inevitably the new folks (usually with very little experience working with clients) get the “brilliant” idea to offer unlimited group training for $80/month (or something significantly less expensive than the current market to try to snake clients from existing gyms.  These “brilliant” folks are brand spanking new to the industry and have done back of the envelope calculations at best…which by the way are NEVER sufficient, and don’t realize the true margins (skinny margins) involved with running a service based business.

A year later they have a gym full of folks, but are barely covering their overhead let alone are they able to have a reasonable standard of living…this is when the light bulb goes off and they realize their brilliant pricing plan wasn’t so fab afterall. Not only did their pricing plan affect their own bottom line, but the bottom line of those around them.

Now it is not my intention to dissuade ambitious would-be entrepreneurs from opening their dream gym. Instead I am wanting to shed some light on what is really involved in running a successful microgym and encourage you to take your time, gain the necessary experience and do it right.

I have asked 5 microgym owners, all current CrossFit affiliates, to respond to a series of questions about being in the microgym business. I am purposely not revealing the identities of these folks for a number of reasons.  First, I want you all to benefit from honest, tell-it-like-it-is, unfiltered responses.  And second, I wanted to provide these folks the opportunity to be as thorough and candid as they liked without having to answer to any questions that may arise from clients, staff, or HQ members that may read this.  We all know that the internet can be a crazy place.  So with the spirit of anonymity 5 prominent CF gym owners are allowing you into their minds, hearts, and their businesses.

This first interview is an affiliate owned and operated by a husband and wife team.  I would surmise that somewhere between 30-50% of all microgyms are comprised of husband/wife or boyfriend/girlfriend teams, which from personal experience I can say can be both rewarding and frustrating at times  :)

As they each have different roles in the business and different viewpoints, both have generously offered their responses. Read on.

How long have you been “open for business?”

Wife:

4.5 years

Hubby:

We affiliated in 2007. Doors officially opened to the public a few months later once we had worked out a few bugs and continued to get the space ready. We had a lot of personal stress unrelated to the business at the time as well, so it was a bit more hectic than normal.

How many hours do you typically work per week in/on your business?

Wife:

For the first 3 years about 60-80, now about 40-50.

Hubby:

When aren’t we working in some capacity we are either sitting in front of the TV in the evening, doing back end computer work, working in the office at one of the gyms or running classes on the floor. If you were to add up actual work, I’d say between 60-80 hours a week, just depending on what is going on.  The good part is that it is not a set 9-5 job. We work when we need to work, and play when we want to play. IMO, the hard work is worth the freedom that comes with owning your own business.

Did you leave another job to open your gym?  Are you making more or less money now?

Wife:

No, was already in the fitness business, finally making the same amount – took about 4 years.

Hubby:

I had always dreamed of “dropping out” of my corporate gig, but didn’t see it as realistic as it was a steady stream of great income and the gym just wouldn’t support us. My perspective on things changed after a serious illness, so it really became a goal of mine to drop out. Finally, in June of 09 it was time. So, I walked away from the money and the perks to help the gym grow. Definitely making less money now.

Is owning and running a gym different than you imagined? How so?

Wife:

No, I already had a pretty good idea of what I was getting into as I was already in the business.  Only thing I didn’t expect was the stress from the growth of CrossFit.  I decided to go with CF because the program exuded honor, integrity and always doing the right thing.  It was also something different.  The business I was in was turning into step-aerobics with one on every corner.  I never imagined CF would become similar.

Hubby:

I don’t think it is much different than what we thought. Maybe the amount of work it takes to keep it well oiled was a bit more than expected.

Knowing what you know now, would you choose to do it again? Why or why not?

Wife:

Probably not.  The stress of worrying another CF could and does open down the street from you is really tough.  I am all for the open market, but not having some territory restrictions is really tough when you sink your life savings into something.  Please keep in mind I am a little jaded as I answer these questions because a 4th CF gym just opened within 1/2 mile of our location.  It just makes your stomach sink.

Hubby:

Yes, I would consider doing it again. The pros have outweighed the cons.

If so what would you do differently?

Wife:

To do it again I would have more training in backend system operations so our backend was set up right from the beginning.  We started out using a basic excel sheet to track clients.  Nightmare.

Hubby:

Different knowing what we know now? I think we’d definitely have started things out on our own with no partners- or at least spent the $ and gotten lawyers involved to set up the operating agreement and exit plan. I think we would have also started things out with a tight structure like we have now. In the early days, we had no real sign in system, class times were just a “suggestion”, etc. When you are small, it is easy to get away with that stuff. But, as you grow and need to make changes those changes are much harder to make later. I enjoy sitting back and watching all the new CF affiliates that are opening on every corner in our town make the same mistakes. It amuses me.

What about your business frustrates you the most?

Wife:

When clients cancel over a $10 savings from the new CF down the street.

Hubby:

What frustrates me the most is probably the disloyalty and entitled nature of so many people. Finding things like broken equipment hidden in the corner, folks not paying the honor box for their tape and the constant stream of folks trying to beat us up on our price and not respecting our time.  That is a constant battle. Especially now that CF is so well known now and there are probably 10 affiliates within a 3 mile radius.  I find that a good number of our new clients are folks that are shopping CF gyms and trying to leverage one against the other. We don’t budge. The new guys do.

What about your business brings you the most joy?

Wife:

I love business, so I really enjoy watching our business grow and become a success.  I love simplifying and improving systems so our clients have a better experience.  Happy clients = happy business.

Hubby:

Getting that low maintenance client that actually complies with the advice they are given and watching them succeed. I really like working with the new folks and those who have never done anything athletic in their life. It makes me happy when folks are doing things they never thought they could do.

Reflecting back to when you opened would you consider yourself well-prepared for owning a business? What were your strengths and weaknesses?

Wife:

Strengths: Good & motivating trainer, got great results with clients.  Clients liked me and came back for more.  Good at thinking of all the details necessary to open and run a gym.Good project manager.  Eventually good at delegating! Weaknesses: no clue on how to run backend systems, poor accounting skills.

Hubby:

I think we were well prepared. Before starting, we worked with a group (former partners) that had been in the business for some time learning the ropes. They turned out to be very poor friends & partners, but still a good learning experience. I studied business in college and had been running kind of a business inside of a business for years- so I already knew the basics of business, which I think has been a huge advantage for us. Most folks I see opening gyms these days are 24 year old dummies who just want to be able to hang around a gym all day.

Did you have experience coaching prior to opening?

Wife:

Yes.

Hubby:

Yes, we both had a couple years of training before starting our gym. We also had a year of CrossFitting under another affiliate. At that time, that existing affiliate was a tiny hole in the wall and the owner there really groomed us to be CF trainers. So, yes, we had good experience coming into it.

Do you feel you are sufficiently financially rewarded for the amount of time you’ve invested in your business?

Wife:

Now, yes, but not initially.

Hubby:

Sometimes. I’m always honored when someone is willing to use their disposable income using our services- but at the end of a super long week or month I always wonder if it is worth it. Sometimes it seems like it would be easier to go back to my old job. But, that thought quickly fades. :o )

Do you see yourself doing this (owning/operating a microgym) 10 years from now?

Wife:

Perhaps a minority owner, reaping the rewards of what we have built.  But not involved in day to day operations – definitely not.

Hubby:

In 10 years I’ll be 51 years old. I certainly don’t see myself working in this capacity then. I won’t be surprised if I am associated with this type of thing in some capacity- but doubt I’ll have the energy and drive to deal with all the individuals like I do now. I’ll be bitter if I do.

As a current CrossFit affiliate, what are the benefits of affiliation as you see them? In your estimation and in your particular circumstance are they worth the price?

Wife:

Price-wise I don’t mind the affiliation fee.  The CrossFit name is certainly helpful for bringing in clients, but we have never benefited from our listing on the CrossFit main page.  All of our clients come from our local marketing efforts or word of mouth, especially initially.  No one knew what CF was around here until a couple of years ago. They came because our clients were walking billboards.

Hubby:

Hmmm- this is an interesting one. For us, yes, I think it is worth the $. We only pay $500/year for our affiliation. With the word “Crossfit” becoming so popular, it is worth it for us being able to use that term. That being said, not very many folks find us from the main page. The vast majority of our business is word of mouth and those in the local area who Google search for “Crossfit in our city”. For new folks, I think it would be a tough decision. I believe it is $3000/year now to affiliate?  I’m a true believer in what Glassman has put together as a program and I have no problem being affiliated with it. But, I don’t really care for where “the scene” has gone. We are one of the quiet affiliates and do our own thing.

How close is the nearest affiliate to your place of business.  How has this affected your business?  

Wife:

We have 4 that have opened after us within 1/4-1/2 mile.  We initially lose people because every new affiliate thinks it is a good idea to undercut our price. It is hilarious to look at their websites.  Not only do they copy our pricing structures, they copy the language and sometimes even the look of our site. Eventually the affiliate learns they cannot survive on their pricing structure, flip out and charge more than we do.  We get all our folks back then.  Sometimes we don’t let them back depending on how they left.  We put a lot into our clients, we like loyalty.

Hubby:

We have MULTIPLE affiliates within a very small area in our city. At last count there are 11 other affiliates within a 3 mile radius from our location. I wouldn’t say it has affected our business too terribly much- just extremely frustrating. Usually, when a new affiliate opens up nearby, we’ll see a slowdown in new clients for a bit because of the new kid’s pricing. We will sometimes lose just a handful of current clients. After a few months, some of those clients will be back. Being one of the original affiliates in this city helps us out. Also, we have a good reputation in the community. I’d say there is a benefit of nearby competition though. It keeps everyone on their toes.

What if any trends do you see among new affiliates?

Wife:

Undercutting the going rate.  They are almost always young guys with no clue on how to run a business.  They don’t make $$ initially and make every mistake in the book.  It is almost comical to watch anymore.  They either reach out to us by coming in unannounced and ask us every question in the book on our gym (usually about equipment) while we are trying to work, or they open unannounced and aren’t friendly the way the early affiliates used to be.  Folks wanting to open an affiliate: if you want to ask a current owner questions, do something for them.  Don’t just drain them dry with your questions and waste their time.  They are BUSY.  Take them out to eat, get them a gift certificate, clean their gym.  You are more likely to learn something if you are respectful of their time and are courteous.  Make an appt!!

Hubby:

The trends I see with new affiliates are the same trends I am seeing with CF big picture. For every new affiliate I’ve seen open up, it is all about The Games, constant CF competitions in the area, Loads of vanity. Another trend I’m seeing is with the seemingly under the radar way these new affiliates are popping up. We have had 2 within 3/4 of a mile open up from our location and we have absolutely no clue who the owners are. They have never been in our gym. Which is fine by me. We are just seeing more and more of this and it leads to mistrust and some funky biz practices.  The other trend I see in the not too distant future with CrossFit is its further commoditization. Right now, it is all micro gyms who for the most part have true owner involvement and take pride in their clients and their training. At some point, at least in large metropolitan areas like where we are, someone will come in who is SUPER well funded and lease out a closed down grocery store or something and just run a CF mill at a rock bottom price.  There are already two big box type gyms with CF programs within them now here. It’s just a matter of time.  

Would you consider yourself an introvert (you gain energy from having time alone) or extrovert (you gain energy from being around others)?

Wife:

Both.  I need both.  In the beginning, I leaned more towards extrovert.  As I have gotten into this, clients do wear on me and I need my alone time.  As an owner you wear many hats, one of the heaviest is therapist.

Hubby:

Both. I thrive on being around folks with good energy and love getting in the mix. However, I have become more and more a private person so I really like my alone time and when I want to be there- I don’t really enjoy people- especially semi strangers. I’m over the small talk thing.  I’d say when we first started out, I was a full on extrovert.

What advice or words of wisdom would you give to someone considering opening a microgym or similar fitness studio?

Wife:

Make sure you fully understand what it will cost to run your gym.  Believe it or not, chalk is expensive.  So is water, electricity, equipment, janitorial services, build-out, gas, water, rent, city licenses, city, county and federal taxes, ADA compliance, water fountain or water bottles, toilet paper, paper towels, cleaning supplies, training your instructors – very expensive from a financial and time standpoint, bringing in new clients – from marketing, training and retaining them – incredibly expensive.

Hubby:

Buckle up. It ain’t all roses. Be prepared to spend double the time on the back end that you do training. No matter the temptation, stick to your guns. Don’t let yourself get slim shady.

What is the hardest lesson you’ve had to learn?

Wife:

Get all contracts in writing with a lawyer’s help.  Even with friends….especially with friends.

Hubby:

We had partners without lawyer written operating and exit plans. Many times these relationships end badly and it is best to figure out how you are going to walk away from it while everyone is friendly and civil.

 

 

 

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19 Responses to What’s it like to be the owner of a CrossFit gym? Interview with an Affiliate Part 1

  1. Sean says:

    What an excellent and very candid report. I look forward to the next installment.

  2. Nick Kirkes says:

    Great post. Lots to think about.

  3. Matt D says:

    Just another invaluable piece posted for the general public to digest and learn from. Thank you for sharing. This series hits close to home for me, as i am building a 400 sq ft area in my backyard to workout in, and possibly make the transition to training clients. We’ll see where the journey takes me.

  4. Adam says:

    Genius – this is fantastic information.

    I’ve reached out to a number of affiliate owners in the time I’ve been planning to open my own gym, and this definitely confirms (and builds upon) what I’ve been hearing. And while I’m no spring chicken, I think most of us start out in the rose-colored-glasses, “24 year old dummies” stage, right?

    Looking forward to the next ones!

  5. Paul says:

    Excellent article. I am the longest-tenured CrossFit trainer in my region; since 2006 actually. Looking back in hindsight, I should have affiliated back then while the affiliation fee was only $500, but I was sub-contracted by another facility who promised me they would find a spot for me to properly perform CrossFit. They didn’t. Since my contract expired and I did not re-new, I have opened my own facility with all of my clients following me and them bringing in new clients, as well. The reason I have not formerly affiliated is that at $3000/year, the R.O.I. just isn’t there. I have kept a friendly, professional relationship with the owner’s of nearby CF facilities and have attended several events at their locations. I even have a few records at those facilities. Anyways, out-of-the-blue I receive an e-mail from an affiliate about thirty miles away asking me if I am a legit affiliate or if I am just using the CrossFit name for profit. This is how I perceive the community progressing. A lot more ego and a lot more ruthlessness for profit. I agree with the ‘hubby’ in the article that Mr. Glassman has re-invented the way people work out and that CrossFit is a legitimate training tool. But it has become all about the games. Who cares? I just want me and my clients to be able to ‘do it’ when we’re ninety and have a long-lasting quality of life. Isn’t that what it’s all about?

  6. Joanna says:

    Thank you to the respondents. I look forward to the rest in the series.

  7. Jackal says:

    Oh, this is sooo good. Can’t wait for next installment. Thank you!

  8. chrissy says:

    Awesome post! Very informative and insightful. Thanks!

  9. Gerilyn says:

    Great content. Hits every angle. Can’t wait to read the rest!

  10. Hollis says:

    Thanks for this. As a newb Crossfit athlete, I appreciate this perspective. I love love love my coaches and my new found community, and this interview has given me much to think about in terms of how to be a good client, and be supportive of what they are trying to do. Our area has 3 affiliates, and I am not even a little bit curious about the others- my coaches’ investment in me makes me very loyal.

  11. Steven B says:

    Holy crap. Right on point. Every single sentence. I swear this is me in the interview and I had no idea I was interviewed. Im actually freaked out about this because its happening the same exact way down here in South Florida.

  12. Liz says:

    I agree Steven, we’re a few years behind the affiliated married couple and their story is almost word for word ours. I can absolutely relate to the first and second stories. And having read the 3rd interview today – it saddens me to know that most affiliate owners are as exhausted as the next. We all go into this business to share what we whole heartedly believe in, the rewards are intrinsic, rarely physical or monetary. We work our selves to the bone and if I be as candid as the interviewees – I can say that I often feel beaten down by the un-realising members who deliberately take the piss, and make unreasonable requests; for the most part I’m sure many don’t realise when they see you for 60-90 in a visit that you’ve just worked 14 hours putting up with the same shit. My biggest gripe is that when life is built around paying for goods and services, why in the gym/fitness industry do people expect ‘free’. Why do they turn up to workout without a wallet or c-card, why is everything a request for an IOU, why do people register for events and workshops and make you chase them for money for weeks and months. You don’t walk into a supermarket, fill your trolley and walk out without paying. Why do they expect credit from us?

    For the love of God, we’re small business owners working hard to make a modest living people, when you go out to buy a bottle of milk – you pay at the counter, please give us the same respect. We are clubs – “for the people” who are the community of that club. We are not commercial gyms. If we can’t pay our bills, we close the doors. We work for love. If you don’t believe me, read the interviews.

  13. All the affilate stories have really hit home. It is good to know that my husband and I are not alone – being a fairly new to CrossFit (2 years) we have experienced so many of the same things as these folks have. Thank you

  14. Dr B. says:

    I am reading these posts in order and this is the first one so far…GREAT stuff. I am glad to see there are other Affiliates with the same frustrations with the community and clients.

    Help enough people get what they want (FITNESS) and you will get you what you want!

    Liz…they don’t pay they don’t play in my box! Get paid FIRST! It will take the stress off and no one gets a FREE meal, unless you give it to them! It changed my mindset.

  15. kirby says:

    My coaches/affiliate owners are my hero’s. Seriously, they could make 4-10x what they do if they went back to work and used their expensive advanced degrees. They decided to follow their passions and create a business from it, and build a facility. I applaud all of you for making this life commitment, and I will gladly pay you $200+/month, and do now. If I still bicycle raced or chased a 100 day a ski year I would be paying $10K+ to compete, so this is a steal for me. And for the level of coaching and accountability, and equipment, camaraderie, friends, I am a loyal and very satisfied client.

    I dropped in a Crossfit gym this week that looked like it was run for profit not performance. Cheap old equipment, sloppy unorganized look and feel, etc. This isnt Crossfit. If you are opening a gym because you read The Four Hour Work Week and your initial math shows your profit margin will increase with a crappy strung together facility with a killer website and young inexperienced coaches, with their only real athletic experience a level 1 cert and participation in the regionals, please find another avenue for income. Crossfit HQ was immaculate, good equipment, coaching, clean, a crap website, and was the model for a facility, but if you’ve come along in the last few years, you would not know this.

    However this shakes out, there will be a lot of great facilities run by very experienced coaches who have figured out the business model over years and provide great facilities and services. The d bags will die off quickly. And again, thank you to the overworked stressed coaches/owners who make all of this possible.

  16. The H/W affiliate is right on the money about gyms being run like a commodity. If you can’t differentiate your box from the one down the street, people are going to go to the lowest priced one. The wife said it best: “All of our clients come from our local marketing efforts or word of mouth, especially initially. No one knew what CF was around here until a couple of years ago. They came because our clients were walking billboards.”

    For me, if another box opened across the street from the one that I currently go to, I wouldn’t switch, even if they were $100/month cheaper, because the trainers at my gym actually care about me and I like the other gym members.

  17. Christophe says:

    I recently switched from the CrossFit ox I first started at to my current CrossFit box. The reason? It wasn’t $. It was location. I was driving 2o mins compared to driving 5 mins. I loved my trainers and the friends I made, but I have kids, a mortgage and running a car isn’t free! So I moved to a brand new box which has not much equipment to a box that had everything. From little things big things grow.

  18. bruck says:

    very helpful

  19. KAMSON Emmanuel says:

    am a trainer in Nigeria,dont know is the same in the globe,whereby client expect goods and services to be free.
    not paying for bottle water after hydrating.thanks a lot,your write up good for upcoming trainers and owners.

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