Thread: Too much $$$
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Old 10-04-2011, 07:42 PM   #20
Katherine Derbyshire
Member Katherine Derbyshire is offline
 
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Join Date: Jan 2009
Location: Seattle  WA
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Re: Too much $$$

Rent
Utilities
Insurance
Equipment and fixtures (like rubber flooring)
Trainer salaries
Affiliate fees, additional training

Meanwhile, on the revenue side, a Crossfit box has a much lower revenue ceiling than a globo because of the nature of the workouts. Once you get more than 15-20 people per class, you need to either double-staff the classes or have more of them. A $150 member who comes to 5 classes per week consumes many more gym resources than a $40 member who either doesn't show up at all or just walks on the treadmill. Furthermore, because the membership is more expensive, you have to keep the members engaged: plenty of people will just let a $40 membership ride if they only use it a few times a month, but most people will question the value of a $150 membership that they don't use. Again, that drives up the cost/member.

Relative to a globo, I would guess that a Crossfit box has much lower equipment costs per square foot, but much higher training costs per member and much lower member head count. As a result, CF startup costs are low but operating expenses are high, while globos are the reverse.

Katherine
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