Let’s look at the data.
What’s up Gym World?
I was at the CrossFit Games for the first time since 2018 and was pleasantly surprised by the vibes.
According to Andrew Charlesworth, the Midwest Affiliate Representative, over 1,000 affiliate owners were in attendance.
I can attest the affiliate lounge was full of energy and excitement.
And why wouldn’t it be? There were appearances by Greg Glassman, Don Faul, Mike Burgener, and other legends within the community.
One noticeable difference from 2018 was that most affiliates were more interested in talking about business, and HQ did a great job of facilitating those conversations.
Your boy helping affiliate owners cash more checks.
Over the weekend, I spoke with HQ staff, CEOs of other large companies that serve the space, and influencers who shape the thoughts of the community.
One of the more interesting conversations I had was with Andrew Charlesworth, whose job is ensuring the 800 affiliates in the Midwest don’t go out of business.
During our chat, he said this:
Show me someone unhappy on a jet ski—can’t do it. Show me an unhappy CrossFit affiliate owner who pays themself $10k a month and isn’t coaching every single class—never seen it.
I agree.
But there’s a problem: our data shows that the median CrossFit affiliate pays themself $3,500 a month. That number includes add-backs like health insurance, car payments, and phone bills that are run through the business.
That’s substantially less than the median household income of $70,800 and nowhere near enough for the amount of work the median affiliate owner does—especially when you consider the positive impact they have on their communities.
Affiliate owners deserve a better life, and to do that something needs to change.
So the question is, how can more affiliates make $10k/mo without coaching every class?
To help answer this question, I enlisted the help of some friends in the industry.
It all boils down to three problems:
Problem 1: REVENUE
Our State of the Industry data shows that the median gym using PushPress makes $15,900/mo. If I had to guess, the dataset is mostly CrossFit gyms.
$15,900/mo isn’t enough revenue to pay owners $10k/mo, hire a talented team, and pay your rent.
I’m sure there are outliers in cheap markets that make $15k in topline and somehow manage to take home $100k+/yr, but we’re looking for solutions that work for the 15,000 CrossFit gyms around the world.
I think the minimum revenue necessary to run a gym that nets the owner $10k/mo, pays for decent staff, and covers rent in a nice location in most North American markets is $30k—which is about 2x the current median.
To get there, gym owners can:
- Make more per member
- Get more members
- Keep existing members longer
Solution 1: RAISE PRICES OR DECREASE OPEX
According to CrossFit CEO Don Faul, the biggest opportunity for affiliates is making more money per member.
I agree.
Our State of the Industry data shows that the median CrossFit gym charges $159/mo.
That’s equal to or less than what other high-intensity large-group training gyms charge:
- OrangeTheory → $159/mo
- F45 → $169/mo
- Fit Body Bootcamp → $199/mo
Mark Fisher pointed out that the problem with that is the CrossFit biz model is less efficient than other high-intensity large-group training chains for two reasons:
1. They require more space per member
OrangeTheory can run a 36-person class out of 2,000 sq ft of training space.
F45 can run a similar size class out of 1,600 usable sq ft.
Matt Wilbur said he was running 50-60 person weekend classes out of a 2,400 sq ft space when he was a Fit Body Franchise.
Conversely, Andrew said his CrossFit classes cap out around 24 people for his 4,500 sq ft facility.
I’ve seen better space utilization, but it’s at the expense of the client experience & safety. We ran 18-20 person classes out of a 2,000 sq ft space, but the spacing was TIGHT, and we couldn’t program workouts that required more than 2-3 pieces of equipment per member.
2. CrossFit requires more active coaching
OrangeTheory, F45, and FBBC all offer high-intensity workouts, but they use low-complexity movements.
I’ve spoken to franchisees for all of these concepts, and the word “cheerleader” pops up a lot when they explain what they’re looking for in a coach.
A well-coached CrossFit class requires an experienced coach who can not only teach multiple complex movements, but also help every person in the class appropriately scale them.
This is not easy for a 20+ person class.
If you agree that CrossFit requires more space and better coaching to be done right, you should also agree that this comes with more operational expenditure (i.e., rent & coaching) than other group models.
To maintain a similar margin, the average affiliate needs to:
- charge more than other group-based models, or
- bring down their opex by utilizing space more efficiently
Problem 2: POSITIONING
Our State of the Industry data from Wodify—which also skews heavily towards CrossFit gyms—shows that 92.13% of large group classes have six or fewer participants.
This would be considered small group training in almost every other corner of the gym world.
To compare, large group chains like F45 or Orangetheory average around 24-26 participants.
Solution 2: IF YOU’RE DOING SMALL GROUP TRAINING, DON’T CHARGE LARGE GROUP PRICES
We’ve interviewed a ton of people who run successful small-group training gyms across multiple locations. Here’s their monthly rate for a couple of 6-person sessions each week:
Also, the average footprint for these gyms is around 2,000 sq ft, and they offer serious training, and most of these concepts frequently use barbells.
These models prove that you can get 150 members who are willing to pay $300-$600/mo for a 6-person class in multiple markets throughout the US.
Meanwhile, the average affiliate is charging large group training prices but delivering small group training.
Repositioning their service as small group training and charging small group training prices would help a lot of affiliates get closer to that $30k revenue target.
Problem 3: GETTING BODIES IN THE DOOR
If affiliates stay with the traditional group-based model, priced at $150/mo, they’d need to maintain 200 members to hit around $30k/mo.
This was hard for me to do in the NYC metro area during a time when Facebook leads were <$5 and CrossFit was more popular. I’d imagine it is even harder to do that today.
While most affiliates have robust systems for maintaining members, the reality is that even if you offer the best service in the world, people will leave.
SOLUTION 3: HAVE A MARKETING PLAN
FIRST: Be clear on who you serve — if you try to serve everyone, you’ll be the right fit for no one. Stu Brauer says the average affiliate does a great job with retention but needs to focus more on their marketing. We both agree that affiliates would make more money if they were more specific about who they’re trying to help. Here’s a great example of that:
SECOND: Do 1-2 of these strategies well
- Paid ads — using lead magnets and challenges to get more sales
- Outbound — reaching out to warm and cold leads in a systematic way
- Content — posting content to your social or blog that consistently brings in leads
TL;DR: How more affiliates can make $10k/mo
The CEO of CrossFit says affiliates “could be doing a lot better financially.”
I agree.
The biggest opportunities are revenue, positioning, and marketing.
- Solution 1: Either increase prices to compensate for added opex.
- Solution 2: If you’re delivering small group training, charge small group training prices.
- Solution 3: Get clear on who you serve. In most cases, niching down makes marketing easier. Then, build 1-2 reliable marketing channels.
HQ is already taking steps to help affiliates make better business decisions, like the Affiliate Starter Kit, Affiliate Representatives, Affiliate Meet-Ups, and working closely with experts in the space.
To learn more, watch or listen to this week’s Gym World with Andrew Charlesworth.
Until next week,
j
