CrossFit Discussion Board  

Go Back   CrossFit Discussion Board > Community > Running a CrossFit Facility
CrossFit Home Forum Site Rules CrossFit FAQ Search Today's Posts Mark Forums Read

Running a CrossFit Facility Tips and guidance on how to open and operate a CrossFit gym.

Reply
 
Thread Tools
Old 05-11-2014, 01:08 PM   #1
Tricia Grunwaldt
Member Tricia Grunwaldt is offline
 
Profile:
Join Date: Jun 2013
Location: Lebanon  MO
Posts: 65
Contracts, $ and an ex partner questions

We are a new box- opened 8 months now. When we opened there were 3 of us, but only one was certified, this the affiliate application has his name on it. Long story short, he decided 4 months in that running a CF was not nearly as fun as DOING CF, demanded his half of the investment (which we were not and still are not even remotely close to being able to pay him) and walked out. Because we have not yet paid him- and honest to God, we literally cannot: there is NO profit being made, not even close- he won't sign the affiliate over to us. We have until Sept, then it is time to renew. But we won't be able to since it's in his name. So what then? Let it expire and reapply for the name? Honestly have no idea what the best plan is. and hq has their hands tied- why should they believe or side of the story over his, ya know? It's in his name, that makes it his, right? Gah! Please advise!

Question 2- we aren't doing contracts. It seemed like the right way to go- a nice enticement, because we knew everyone would love cf so much they'd just stick w it anyway. Well, mostly true but the uncertainty is near wracking and the people who skip a month out of convenience for their schedule is irritating. So how do we implement contracts. With a discount incentive? We are already 1/2 the price of the nearest box (which is 30 min away) and people won't even come to a free class when they find out the price! 😕 small town mentality. Actually had someone try to barter with us yesterday! It is my husband and myself running the box with no employees. And no $ to hire any. He does a 5:30 am class, works his "main" job from 7-5, I do all the office work at the box, homeschool our kids and do a 4:30 class and we both do evening classes. We are exhausted. It's a good day if we eat 3 meals. 😦 And need more $ to come in- not want, NEED, but we have such tightwads idk how to make it happen. Help! I'd like to think some of you have been in our shoes and can offer advice.
  Reply With Quote
Old 05-11-2014, 02:14 PM   #2
Brian Strump
Affiliate Brian Strump is offline
 
Brian Strump's Avatar
 
Profile:
Join Date: Sep 2009
Location: Charlotte  NC
Posts: 2,619
Re: Contracts, $ and an ex partner questions

All this, and at 8 months?

My 2c; start looking for help. Not in terms of money, but coaching to get you headed in the right direction before you need to close your doors.

My recommendation is to look into 321goproject.com.


Quote:
Originally Posted by Tricia Grunwaldt View Post
We are a new box- opened 8 months now. When we opened there were 3 of us, but only one was certified, this the affiliate application has his name on it. Long story short, he decided 4 months in that running a CF was not nearly as fun as DOING CF, demanded his half of the investment (which we were not and still are not even remotely close to being able to pay him) and walked out. Because we have not yet paid him- and honest to God, we literally cannot: there is NO profit being made, not even close- he won't sign the affiliate over to us. We have until Sept, then it is time to renew. But we won't be able to since it's in his name. So what then? Let it expire and reapply for the name? Honestly have no idea what the best plan is. and hq has their hands tied- why should they believe or side of the story over his, ya know? It's in his name, that makes it his, right? Gah! Please advise!

Question 2- we aren't doing contracts. It seemed like the right way to go- a nice enticement, because we knew everyone would love cf so much they'd just stick w it anyway. Well, mostly true but the uncertainty is near wracking and the people who skip a month out of convenience for their schedule is irritating. So how do we implement contracts. With a discount incentive? We are already 1/2 the price of the nearest box (which is 30 min away) and people won't even come to a free class when they find out the price! 😕 small town mentality. Actually had someone try to barter with us yesterday! It is my husband and myself running the box with no employees. And no $ to hire any. He does a 5:30 am class, works his "main" job from 7-5, I do all the office work at the box, homeschool our kids and do a 4:30 class and we both do evening classes. We are exhausted. It's a good day if we eat 3 meals. 😦 And need more $ to come in- not want, NEED, but we have such tightwads idk how to make it happen. Help! I'd like to think some of you have been in our shoes and can offer advice.
__________________
Brian Strump, D.C., FMS, NKT
www.crossfitsteelecreek.com/
  Reply With Quote
Old 05-12-2014, 07:14 AM   #3
Josh Groves
Member Josh Groves is offline
 
Josh Groves's Avatar
 
Profile:
Join Date: Nov 2009
Location: The Woodlands  TX
Posts: 134
Re: Contracts, $ and an ex partner questions

What are the terms (on paper) of his investment? What legal options does he have to reclaim? If the business he is invested into is not profitable, he cannot just ask for his money back and expect to get it. You should seek the advice of a lawyer, not this forum on this topic.

There are many ways that this could go, but I'm guessing that the options will be:

1. Close the gym
2. Sit down with estranged partner and a lawyer and figure out terms that are agreeable about repayment if the gym stays open. If he truly made an investment and not a loan, it's in his best interest to see the doors stay open and that the gym becomes profitable, because that's the only way he's going to earn his money back. If he just tried to walk away and demand his money and the business fails, he not only will lose his money - he could potentially owe you for neglect (not a lawyer, so not sure how true this is, but it sounds reasonable to me).
  Reply With Quote
Old 05-19-2014, 08:02 AM   #4
Joey Dussel
Affiliate Joey Dussel is offline
 
Joey Dussel's Avatar
 
Profile:
Join Date: Jun 2012
Location: Corvallis  OR
Posts: 196
Re: Contracts, $ and an ex partner questions

PM sent.

-Joey
__________________
Head Coach at CrossFit R3 www.crossfitr3.com Bachelors of Science in Applied EXSS, CF-L1, CF Gymnastics, CF Oly. Participant in Tough Mudder and GORUCK Challenge.
  Reply With Quote
Old 05-20-2014, 06:40 AM   #5
Brendan McNamar
Affiliate Brendan McNamar is offline
 
Brendan McNamar's Avatar
 
Profile:
Join Date: Mar 2010
Location: Glendale  AZ
Posts: 2,216
Re: Contracts, $ and an ex partner questions

Couple of thoughts:

1) Get the ownership issue resolved right away. If you fix the gym your "partner" will show back up and want a cut of the profits or cash. If he walked on his investment and isn't contributing then you need him legal separated and the ownership 100% in you and your husbands name. You may have to give him half the equipment or something but what ever you do get a lawyer to make it clean, official and in writing.

Don't worry about the Affiliate issue with HQ so long as you don't break any of the rules. Keep your insurance in place, have a correct website and so on. The day your renewal is due I would submit an application with your affiliate fee and proof of insurance to get the name. Your partner isn't going to pay for another year. When he doesn't pay the name becomes available. (This assumes you decide it is best to stay an affiliate)

2) I just got back from a long weekend in Sedalia, MO. Lebanon is even smaller. You have a very tough market which I'm not sure is worth the effort. Didn't see many people remotely interested in health and fitness when I was there. Almost no one had extra income to spend on a gym. You will have to decide for yourself but is it really worth being an official affiliate in a small town like Lebanon? Consider redesigning your business so it works with your life.

There are 3 groups of affiliates in the world. Group 1 big highly profitable gyms. Combination of location and ownership skill. Group 2 are like the one I sold. 80 to 100 members, profitable but the owner works a lot can't make the jump to Group 1 for a lot of different reasons. Group 3 like yours struggling.

In my opinion there is not enough talk and help for the Group 2 & 3 folks. There are a lot of good owners in this situation. I would encourage anyone in this situation think carefully about your options. I was lucky and had good young coaches who wanted to be owners and had the ability to pay me.

Don't let your affiliate hurt your families fiances or relationships. A happy family, marriage and a closed affiliate is far better then a miserable family, a failed relationship and a business sucking the life out of you.

You are not the only owners in this position. I recently talked to an owner who at 1 point in time almost shut his doors and liquidated a positive cash flow gym to get his life back. I'm happy to report he found a better solution bringing in management help. He will keep far less of the profits but it was never about money in the first place.

Today I got up at 4:30 AM to help my 41 year old girlfriend (from Sedalia, who was the first person in her family to get a college degree and raised two kids with little or no help from the fathers) get ready for her second day of work following her dream to become a police officer. If I still owned my gym I would never be able to support her following her dream.

Life is short, make it good.
__________________
Nomadic CrossFit Coach
  Reply With Quote
Old 05-20-2014, 11:58 AM   #6
Brian Strump
Affiliate Brian Strump is offline
 
Brian Strump's Avatar
 
Profile:
Join Date: Sep 2009
Location: Charlotte  NC
Posts: 2,619
Re: Contracts, $ and an ex partner questions

Some people think that because no one is nearby, that it's a great place to open a business; ANY business.
When it's much more likely no similar businesses are there because the population/demographics cannot support it.
__________________
Brian Strump, D.C., FMS, NKT
www.crossfitsteelecreek.com/
  Reply With Quote
Old 05-22-2014, 09:28 AM   #7
Brian Diez
Member Brian Diez is offline
 
Profile:
Join Date: May 2007
Location: East Meadow  NY
Posts: 217
Re: Contracts, $ and an ex partner questions

This sounds like a blessing in disguise. I would close the gym and start over.

1. Your partnership is a nightmare. Best bet is to end it as amicably as possible. Split up the assets as best you can and go your separate ways.

2. You're attracting the wrong type of members. If they're coming to you because you're cheaper and they aren't even locked into a contract, then your business is built on the worst business model ever. I wouldn't be fighting to save it.

You two need to get certified and spend some time working at a successful box or attend a seminar. Spend your free time learning how to run a business. Read some books like, "The E-Myth", and anything by Dan Kennedy.

You may be in business to serve the community, but the goal of the business is to provide you with financial security.

Be the better box, not the cheaper box. For every K-Mart there's a Walmart coming to put them out of business. Be Nordstroms instead. Give them a reason to want to pay more.
  Reply With Quote
Old 05-22-2014, 10:25 AM   #8
Tricia Grunwaldt
Member Tricia Grunwaldt is offline
 
Profile:
Join Date: Jun 2013
Location: Lebanon  MO
Posts: 65
Re: Contracts, $ and an ex partner questions

I appreciate all the feedback. Gotta at least finish the year w our already paid affiliate. Maybe re-analyze the situation after that. I know starting a biz isn't easy, but it's hard to tell if it is just a bump In the road or if we need to turn around and go the other way.
  Reply With Quote
Old 05-22-2014, 12:45 PM   #9
Greg Spaight
Member Greg Spaight is offline
 
Profile:
Join Date: Aug 2013
Location: Centennial  CO
Posts: 176
Re: Contracts, $ and an ex partner questions

If you shut it down now you lose 33% of your affiliate fees. Split between the 2 owner groups that isn't much $. You will lose more than that in time suck and aggravation by staying open.

A partnership should never be started without finalizing the dissolution of said partnership first. I know, Capt. Obvious.

Tell the other partner you will sell him your half for what you have in it and see what he says.
  Reply With Quote
Old 05-23-2014, 07:41 AM   #10
Wil Vicinus
Affiliate Wil Vicinus is offline
 
Wil Vicinus's Avatar
 
Profile:
Join Date: Nov 2007
Location: Philadelphia  PA
Posts: 173
Re: Contracts, $ and an ex partner questions

I separated from a partner two years ago; luckily the affiliate was in my name so it went a bit easier than what you seem to be experiencing.

If you or your husband don't have your L1 yet, get it right away. If the partner with the rights to the affiliate name is officially separated from the company you will need to re-affiliate and that will not be approved by HQ unless you're certified.

Per the affiliate agreement, the partner who affiliated has full rights to the name. Operating as "CrossFit XYZ" after he leaves will be a violation of the affiliate agreement so if you're terminating the partnership you will need to re-apply for affiliation; I'd suggest starting on that at the same time as you start negotiations for partnership separation. If he really wants out, he'd likely be amenable to a payment plan based on his share of the initial investment; get it in writing and make sure that part of that includes him waiving all rights to the business as of the date of signing. Since he's the one who wants to leave you actually have the negotiating power, so stand firm on what you can offer and what your terms are. I'd recommend you accept the probability that you'll need to find a new affiliate name.

Re: contracts - they are not necessarily a requirement, but monthly recurring billing is. We operate very successfully on a month-to-month membership structure; billing happens automatically every month unless the member cancels before the bill date. It works very well for us.

What is your value proposition? How do you demonstrate that what you do is worth every penny and more? Talk to your best members - the ones who have been with you since the beginning and have brought their friends - and find out what it is that keeps them coming back. Use that to refine your message when talking to prospects. Do you have a member referral program? If not, consider implementing one - reward your members for being loyal and they'll bring in the business for you. What's your member retention like? While you're still small you should be speaking with every member who leaves and finding out what their reasons are. Those are the areas to address first with whatever limited resources you have, which will help you retain members and get referrals in the long run.

Feel free to PM me if you'd like any more input.
__________________
CrossFit South Philly
www.crossfitsouthphilly.com
  Reply With Quote
Reply


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is Off
HTML code is Off
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Contracts Brian Strump Running a CrossFit Facility 0 04-06-2011 06:38 AM
Contracts.. Nick Di Matteo Running a CrossFit Facility 7 03-11-2008 07:43 PM


All times are GMT -7. The time now is 05:39 AM.


Powered by vBulletin® Version 3.6.8
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
CrossFit is a registered trademark of CrossFit Inc.