In this special guest post by Attorney Matthew Becker, founder of Gym Lawyers PLLC, we delve into the world of gym partnerships. With a unique blend of legal expertise and hands-on experience as a gym owner, Matthew brings valuable perspective to guide you through common challenges in gym partnerships, including:
- Vision alignment
- Financial management
- Workload distribution
- Communication
💡 About Matthew: Matthew’s journey in law began in 2009, and his career took a turn towards entrepreneurship when he opened his gym, Industrial Athletics, in 2013. His unique experiences in both fields have equipped him with valuable insights into the legal and practical aspects of running a gym. Now, he’s extending his legal expertise with gym owners. While others can help grow your business, Gym Lawyers PLLC teaches you how to protect it. You can contact Gym Lawyers PLLC for a free consultation where they’ll discuss your business, check for legal risks, review your paperwork, and explain the laws that apply to you.
This article is a must-read for anyone in or considering a gym partnership. Matthew addresses key challenges gym owners face when partnering in business and provides practical solutions rooted in both legal knowledge and real-world experience. His insights aim to empower gym owners to create strong, sustainable partnerships that thrive in the competitive fitness industry.
So, whether you’re contemplating a gym partnership or already in one, get ready to dive into Matthew’s expert advice to help you navigate the complexities and ensure your business’s success.
Take it away, Matthew!
Addressing Key Gym Partnership Challenges
When you decide to team up with someone to run a gym, it’s like getting married—you need to be in sync and ready to support each other. But just like being in a marriage, sometimes you face challenges.
Here, we cover the four biggest issues that can pop up in gym partnerships and how you can prevent them and overcome them.
Problem 1: Not Seeing Eye to Eye
Imagine you and your spouse are planning a road trip but can’t agree on the destination. One of you wants to hit the beach, and the other wants to go camping in the mountains. That’s what it’s like when partners don’t share the same vision for the gym.
It may sound like you are on the same page in the beginning. However, most partnerships talk in generalities or say things like, “we will worry about that later.” They never get really clear with their vision for this new adventure together. Two years later, they are butting heads trying to decide on the best route for moving the gym forward.
Solution
Sit down with your protein shakes and have a chat about what each of you dreams of for the gym. The more specific, the better. Ask yourselves:
- Do you want to focus on yoga and calm workouts, or are you all about loud music and heavy weights?
- Do you want to be a group-based facility or focus more on a personalized experience?
- How do each of you feel about open gym or open access to your facility?
💡 Make sure you agree on the big picture and how you'll make decisions together. Use legal documents like Operating Agreements (a/k/a Partnership Agreements) to determine how decisions will be made based on voting rights.
If there are only two of you, you’ll also want to think about things like what happens if there’s a stalemate or who casts the winning vote on buying the new Concept 2 rower next month. The more you can plan up front, the more likely you are to avoid disagreements in the long run.
Finally, talk to other gym owners and consulting companies who have experience. It is almost a guarantee they’ve seen something you aren’t thinking about.
Problem 2: Money Matters
Money can be a tricky thing. You and your spouse probably talk a lot about spending money. If you share a bank account, then you are almost certain to talk to the other person before buying something like a couch or a TV.
Now, imagine if your gym partner bought a $7,000.00 TrueForm Runner but didn’t ask you first. What if you wanted to pay yourself $2,000.00 at the end of the month, but your partner wanted to keep that money in the bank account for a rainy day? Even small money issues can lead to hurt feelings and potentially break-up sized arguments.
Solution
Think of your gym’s money like a cookie jar. You both need to agree on when to take cookies out and how many you get. Solid partners start with written agreements, like Operating Agreements (mentioned above).
It works like this: In the beginning, when everyone is happy and excited, they write down rules for how to spend money, when everyone needs to agree 100% on how much to spend, and how to divide up profits. All partners need to be on the same page with who gets paid for what. For instance, does one partner want to make sure there is always a floor of $5,000.00 in the company bank account before paying the partners?
💡 One of the biggest issues that come up around money is when one partner is the day-to-day operations partner and the other is just an advisory partner. Should both partners get paid the same from the Company?
Money, like excess carbs from those cookies, is the root of evil. And, just how you would figure out in the beginning how those cookies fit into your macros, spend time in the beginning deciding how money fits into your new partnership.
Problem 3: Unequal Effort
Sometimes, one partner might be doing all the heavy lifting, staying late to clean up or coming in early to open up, while the other partner isn’t doing as much. This can make the hardworking partner feel taken for granted, like when one friend does all the school project work while the other slacks off and both get full credit. Except this time, it’s money that is given equally to the partners because of one’s effort, not a simple grade on the paper. We mentioned this one above, and it is one of the leading killers in partnerships.
Solution
Teamwork makes the dream work. Be clear about who does what from the start.
Maybe one of you is great at teaching classes, and the other is a whiz at keeping the books. You write job descriptions for your staff, why not do it for your partnership as well? As the business grows and changes, so will your rolls. So, plan to sit down every 6 or 12 months and make sure you’re both happy with how things are going. What are the responsibilities of each partner for the next 6 months? Again, be as specific as possible.
One other thing to consider, what happens if one partner starts slacking on their duties? Should that partner still get all of the credit (money) when you did all of the work? Or, are you able to kick your partner out of the project (the Company) and keep it all for yourself?
💡 Think of it like a prenuptial agreement for your partnership. What happens when things go south?
Problem 4: Not Talking Things Through
Not talking about problems when they pop up can make things worse, like when you’re upset with your spouse but don’t tell them why. In a gym partnership, this can lead to misunderstandings and hurt feelings.
Partners don’t hold regular meetings and don’t create a healthy environment for sharing. All too often when asked if one partner talked with the other partner about a problem, the answer is, “No, I haven’t. I don’t think it will go over well.”
Unresolved problems lead to anger, and anger leads to resentment. Resentment will end a partnership, just like a marriage.
Solution
Make a plan to chat regularly, even when things are going well. In fact, chatting regularly while things are going well is the best time to chat.
💡 Give each partner the power to call a chat time to address emergency issues. This keeps you both on the same page and helps avoid surprises.
Determining a regular required chat time every month or quarter will help force hard conversations even when the partners don’t want to chat. Just like marriage counselors, there are professionals who help facilitate these conversations with partners. It helps avoid the awkward, “Hey partner, we need to talk…”
Plan Now for Success Later
Running a gym with a partner can be super rewarding. You get to share the highs and lows, just like a good marriage. By making sure you both:
- want the same things,
- deal with money fairly,
- share the workload, and
- keep the lines of communication open
you’ll be set up for success. It’s all about teamwork, in the gym and in the business.
Want to Run a Successful Gym?
At Kilo, we’re obsessed with making life easier for gym owners. Don’t believe us? Meet our customers.
Book a free call today to see if Kilo is right for you.
