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

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Old 11-02-2011, 10:29 AM   #31
Brian Strump
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Re: Affiliating worth it?

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Originally Posted by Brad Gerbrandt View Post
Why is it dumb?

I say +1 for the financing option!

The first year we just pony'ed up, now it would be nice to have it worked in as a monthly expense verses a big bill all at once.

That's what banks are for! Get a loan from a bank and add $3000 to that.

Or wouldn't it be more economical if money is that tight to get a credit card, business or personal, and pay for the affiliate fee on that? There are hundreds of company's offering 0% or other low percentage interest rate for 6-18 months depending on the borrowers credit. This way, if money is tight at the start, you can pay a minimum, and on a more profitable month, you can pay off more faster. These are not options given to you when you finance something.

Do you know how many affiliates will not be able to pay the affiliation fee each month? Then what happens. They'll give you 30-60 days to catch up? And now CF becomes a bank. I'm guessing the application process will be pretty simple given the small amount of that's being financed. And they are only financing a trademark name, nothing tangible. When the affiliate can't pay, HQ sends a letter that you can no longer use the CF name. NOW, all their marketing material and most importantly whatever brand/awareness they have created for themselves needs to change since they'll need to change their name.
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Old 11-02-2011, 12:42 PM   #32
Steve Loeding
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Re: Affiliating worth it?

Monthly payments toward Affiliate dues would be awesome !!! Much easier to plan that out than to save (saving is easy but it's easier to simply pay a monthly flat fee)
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Old 11-02-2011, 02:02 PM   #33
Chris Cooper
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Re: Affiliating worth it?

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Originally Posted by Brian Strump View Post
IMO, this is just dumb.
Don't know about you, Brian, but 3k every year, all at once, would be a large expense for me. For the first year ever, we financed our insurance rather than pay a lump sum, and I'm much more comfortable with it. Financing rates are low; why NOT lower the barrier to entry for new Affiliates? You and I didn't face a 3k Affiliate fee on the first day without an asset to match.
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Old 11-02-2011, 03:20 PM   #34
Brian Strump
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Re: Affiliating worth it?

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Don't know about you, Brian, but 3k every year, all at once, would be a large expense for me. For the first year ever, we financed our insurance rather than pay a lump sum, and I'm much more comfortable with it. Financing rates are low; why NOT lower the barrier to entry for new Affiliates? You and I didn't face a 3k Affiliate fee on the first day without an asset to match.
My main reasoning is there are easier ways to do it, or at least smarter for a new affiliate, like I said on a credit card, IF you are smart about it, and pay it off. It offers more flexibility, which is something very important to a business owner.

Second, it's already easy enough to become an affiliate. Besides all the rah, rah cream rises to the top; it's still an issue since credentialing, and quality control are not there. Sure this is true with almost all personal training done in the gym setting, however they don't all share the same name as mine(ie. CrossFit). I'm a chiropractor too, so I know full well how a bunch of zealous idiots can make it much less likely that for someone to decide against coming to our facility; or said chiropractor.
It's the same with body shops that rip people off, leaching lawyers, etc. It happens in every profession, HOWEVER, they do not all have the same verbage in their business name(CrossFit). I love what we do, and will always support this community, but I'm one for making the entry harder, not open to everbody with some time, and $1,000....and some financing for their affiliate fee
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Old 11-02-2011, 10:52 PM   #35
Keith Martin
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Re: Affiliating worth it?

Although I won't say it's necessarily a bad idea, I kinda agree with Brian. We spend 5k plus on equipment. To add another 3k to our finances is just prudent planning. If you wanna finance, get a 12-15 month no interest credit card. Have a business plan in place that will allow you to repay. In business, 3K is a drop in the bucket if you wanna be successful...even on a shoestring budget.
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Old 11-03-2011, 03:41 AM   #36
Chris Cooper
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Re: Affiliating worth it?

I believe your argument is really about limiting access to the 'brand.' Whether I agree on that point or not, I don't believe that cash should be the discriminating factor.
Different boxes will grow at different rates. The fear of slow growth, when I was starting out, would have discouraged paying the $3k up-front fee. Would I be scared of paying $3k today? No way, because I know that the return is still more than 20x the price (and CrossFit is not our core business, though it does flavour the rest.)
I find myself in a position to comment on the expansion of the Affiliate model because we're at the Big Bang phase ourselves with the Ignite! program. Many want to offer brain training or enrichment courses or cognitive therapies at their gym, but want to be the only one able to do so (they want to protect their turf.) This is understandable, of course, but the Ignite! brand will be worth more to them when it's more easily recognized...and that means more Affiliates. Where, then, do you draw the line on total Affiliates?
As one of our lawyers once said to me, "Do you want this thing to help people, or do you want to spend the rest of your life in court settling territory disputes?"
Growth will be encouraged - or limited - at the street level. At the top, I think it helps us ALL to know that smart, engaged, entrepreneurial CrossFitters like yourself won't be turned away because they're (understandably) afraid of a $3k risk.
One other thing: to the non-businessperson who is inexperienced with cash flow, their experience with handling sums greater than $500 may be limited to the purchase of real assets. The 'value' of a transient licensing fee may not be obvious to them. While I support the rising Affiliation fees for new CrossFit boxes, I also believe that Greg Glassman should make a billion dollars on this; that you and I should make a hundred million for taking the risk before the mainstream; and that we should welcome anyone and everyone willing to take the risk to join our community.
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