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Old 11-28-2012, 10:44 PM   #1
Ville Huttunen
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Now that Anthos is defeated let's take a look into this

I seriously think Dane's post deserves a thread of it's own.


Quote:
Originally Posted by Dane Thomas View Post
I am very glad that committed supporters of CrossFit helped to fend off this attempt by Anthos, but there are other threats to CrossFit and to the affiliate agreement that HQ has yet to address.

Coach and others at HQ have been clear over the years that they see affiliates starting in Globo-gyms as an opportunity for trainer/entrepreneurs to establish businesses and win over converts in a target-rich environment, with the assumption that those who are successful will eventually build enough of a client base to move out into a space of their own. The foundational principles empowering that concept includes the fact that the affiliate agreement is connected to a person, not a corporation. Ideally that person is an owner-operator, directly involved and invested i the operations and growth prospects of their affiliate. Additionally, affiliates are supposed to show that their business is independent and separate from that of the Globo-gym. Affiliates are supposed to have their own websites and membership structures. Affiliates are supposed to be primarily focused on CrossFit, not just offering CrossFit as one of many different fitness activities.

This definition and enforcement of this separation between officially recognized CrossFit Affiliates and the rest of the fitness world has been very important historically. It has gone hand in hand with the efforts of the legal department to protect against IP theft. For many Affiliates, this protection and guarantee of exclusive rights of access to the trademark is a large part of what makes Affiliation fees worth paying.

That is why it is so distressing that HQ has recently decided to ignore this aspect of the owner-operator affiliation model by allowing Globo-gym corporate entities to affiliate through the use of proxies. Corporate management at multinational gym chains are opening affiliates with the full backing and investment of the parent companies. HQ is turning a blind eye to the requirements that affiliates must be separate businesses, with separate websites and memberships. 100% CrossFit boxes run by owner-operators are being severely undercut in price by chain gyms where thousands of existing members are given direct access to an officially recognized CrossFit affiliate. In the minds of those members, CrossFit becomes just one more of the dozens of different types of classes offered by the chain, powerfully undermining the value of the CrossFit brand in those markets.

HQ is willfully failing to differentiate between committed owner-operators and corporate Globo-gyms attempting to minimize membership losses by hopping on the CrossFit gravy train. Globo-gyms don't necessarily need to grow their own CrossFit businesses in order to succeed when staunching their losses will be more than sufficient for them to recoup their investment. How can anybody reasonably expect the general public to be more discerning than HQ on this matter?

Think about the alternatives. If the Globo-gym-owned affiliate can provide high-quality CrossFit training and community at considerably lower costs than owner-operated affiliates, there is no longer any compelling reason for the owner-operated affiliates to exist in markets where consumers have a choice. On the other hand, if owner-operated affiliates are able to offer a substantially better training and community experience than Globo-gym-owned affiliates, thus motivating a difference in price that reflects the relative difference in economic realities between the two entities being compared, why should CrossFit HQ allow Globo-gym-owned affiliates into the marketplace?

None of this will affect me or my facility but it is having a negative impact on other owner-operators in my area and it is very likely to spread. If I were running a Globo-gym I would jump on it in a heartbeat because they have literally everything to gain and nothing to lose, all at the expense of the local owner-operatored affiliates who built the reputation of CrossFit with their blood, sweat and tears.

HQ and the community did a great job fending off Anthos, but HQ is ignoring this more insidious danger and it is likely to continue doing so until the community notices and starts reacting. We collected signatures from 30+ affiliate owners in my area who are concerned about this and we have submitted our concerns and suggested improvements to HQ on October 19. We sent our letter to Greg Glassman, Tony Budding, Dave Castro, Nicole Carroll, Kathy Glassman and Affiliate Support but have yet to get an answer from any of them. Russell, now that the Anthos threat has been deflected, maybe you can get your fellow staff members to take this one seriously.
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Old 11-29-2012, 08:35 AM   #2
Dale F. Saran
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Re: Now that Anthos is defeated let's take a look into this

Ville: (and Dane)

I'm probably the person to whom this should be directed (although Coach is always the highest appeal), but we ARE dealing with this. Dane's post is fine, except for his personl accusations that HQ isn't dealing with or ignoring this matter.

I don't mind Dane's complaint, but the tone is flat-out wrong. The constant assertion of Dane's opinion as fact ("HQ is turning a blind eye", "HQ is willfully failing", "HQ is ignoring") is bull$hit and an attack that has no basis in reality. You can criticize HQ, but don't tell me you know we're "willfully" doing X or Y because last I checked Dane wasn't present for some secret meeting where HQ said: "hey, let's willfully ignore our affiliates." That's horse $hit. Dont' ascribe evil motives where there are none simply because you see a problem that you feel hasn't been addressed.

Okay, that aside, let me deal with the substance. I believe (Dane) that you are talking about the company www.worldclass.se, a Swedish globo-gym that is operating and has a class called "xfit-express" (because I see that case in our IPTheft database). You filed that on September 21. We're working on it. We have to investigate it, hire Swedish counsel, provide them the information, tell them what CrossFit is, provide our trademark portfolio, etc. (get them up to speed on who and what we are and lawyers notoriously suck at understanding fitness in my experience doing this), and THEN turn them onto the infringer, and then determine if under Swedish law we have a case against someone like "xfit express" as "confusingly similar" to CrossFit. That's what one case takes. (by the way, it is case number 2596 in our database).

Now, if (Dane) you are talking about another Globo that has been allowed to affiliate, I saw some of your exchange with Kathy. You are wrong if you think that we ignore or will let someone operate outside of their license agreement. If you find another Swedish globo trying to use the affiliation process as a back door to use CrossFit at all of their franchise locations, then please provide the proof of that to the iptheft.crossfit.com form, and we will track and manage that case from cradle to grave, just like we do and have done for prior instances of this exact same complaint in the US and other countries.

So, in short, no one is being ignored. If Dane, you don't believe your question has been answered, don't start casting aspersions. We have a policy; we enforce it. Enforcement does not allow us to send out team sof ninjas in the night to kill violators (although I wish it did). Unfortunately, the rule of law requires time and that can be frustrating, but we ultimately vindicate our rights and protect our affils. It may take a little time. But no one is "willflly turning a blind eye" or any of the accusations you've made. That is simply false.
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Old 11-29-2012, 09:16 AM   #3
Dane Thomas
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Re: Now that Anthos is defeated let's take a look into this

Dale, thank you very much for your reply.

I apologize if my level of frustration shone through all too clearly. Just to be clear, the IP theft problems that we have reported (including the specific issue with World Class) don't have anything to do with what I am referring to here. As far as I can tell your legal department is head and shoulders above the other parts of HQ, both when it comes to effectiveness and communication.

Here is the full text of the letter that I wrote on October 19:

*****

Coach,

We would like to inform you about a situation that we feel is a threat to owner-operated affiliates and the value of the CrossFit brand.

The affiliate model is designed to empower owner-operators. That is reflected in the application process, but some have found ways to bend the rules to their advantage. It is happening now in Sweden but unless it is checked there is nothing to prevent use of the same tactic in other markets.

A corporate manager at a multinational Globo-gym has been allowed to affiliate in Stockholm. SATS has 111 locations that did $122 million in business last year in a country of only 9 million people. SATS also has gyms in Norway, Denmark and Finland, and this man has managed the personal training for all of them for years. He does not currently own a business despite having been approved to start an affiliate.

Upon approval of his affiliation SATS posted ads showing the addition of a lavish CrossFit section in one of their facilities here in Stockholm and clarifying that members will soon have access to CrossFit training. This is not a “Trojan Horse” situation where an owner-operator rents space from a Globo-gym. It is a multinational Globo-gym boss using corporate resources to win back business lost to existing affiliates.

Maintaining separation between owner-operated CrossFit affiliates and Globo-gyms allows each to compete on their own merits, but allowing Globo-gym management to affiliate upsets this balance. It enables them to drive public perceptions of an acceptable price for access to CrossFit below what owner-operated affiliates can compete with. This manager can assign any of the thousands of trainers under his supervision to lead CrossFit classes, regardless of whether or not they have their CF-L1 certification.

Perhaps the most important difference is that a Globo-gym’s potential return on their investment is not dependent upon the quality of training provided. Reducing the perceived value of competing owner-operated affiliates can be sufficient for their purposes. In this case, CrossFit will become marginalized in the public mind as just another one of the 49(!) different group training classes that SATS currently offers.

A Globo-gym may not be able to deliver the quality or community feel that an owner-operated affiliate can, but this will only be apparent to those who have invested the time and money to try both. The damage to the local reputation of the CrossFit brand will already have been done before that becomes clear.

We would like to clarify that we have nothing against this trainer personally. He clearly has a great resume and Kathy said that his application included a very good essay. Even so, we are certain that allowing him to open his affiliate in its currently proposed form would be bad for CrossFit.

This is not likely to be a solitary occurrence. Situations like this can be hard to detect and deal with, especially over geographical, language and cultural barriers. We humbly suggest that this could potentially be made easier by process improvements such as the following:

1) Amendment (clarification) of current affiliation policies, such as:
a. Verifying that affiliates are owner-operated. Having outside investors is OK, but the affiliate business license must be in the applicant’s own name, not that of their investors.
b. Verifying that arrangements for rent, insurance, equipment purchase/leasing etc. are in the name of the affiliate

2) Enforcement and follow-up of existing policies that require affiliates to be run as truly independent entities, such as:
a. A requirement to show that the affiliate and “parent” gym have independent membership structures
b. Requirements for independent affiliate websites should include periodic spot-checks to insure compliance.
c. A requirement forbidding co-marketing with the "parent" gym

We would also appreciate clarification and enforcement of policies regarding the proportion of classes that must be taught by a CF-L1 trainer. An absence of clear guidelines leaves this open for interpretation and abuse and there is no clear method at present for policing this.

We also feel that it would be good to make sure that the affiliate support department has access to the resources needed to more adequately deal with the geographical, language and cultural barriers that make serving international affiliates a challenge.

We want to help protect and expand upon the dream that we all share. We welcome competition, but just as it would be unfair for Masters athletes to compete on an equal basis with Rich and Annie, it is unreasonable to expect owner-operators to compete without protection from predatory corporations. We know that you are unbuyable, but allowing this to continue might be even worse then selling out. We could be giving it away for nothing.

Thank you for considering this.

(Reference: Affiliate support case #00002536)

Most sincerely,

Dane Thomas, CrossFit Norra Station, Stockholm, Sweden
Camilla Foghagen, ConCor CrossFit, Stockholm, Sweden
Karl Dyall, CrossFit Solid, Stockholm, Sweden
Joachim Bergström, CrossFit Solid, Stockholm, Sweden

Additional affiliate owners supporting this include:

Daragh O’Boyle, CrossFit Fifteen, Dublin, Ireland
Ferenc Odor, CrossFit Ad Flexum, Mosonmagyaróvár, Hungary
Peder Larsson, CrossFit Luleå, Sweden
Diogo Henriques, CrossFit Palmela, Portugal
Christian Hedlund, Reebok CrossFit Östersund, Sweden
Ville Huttunen, CrossFit Kuopio, Finland
Juha Metsämuuronen, CrossFit Lappeenranta, Finland
Atte Kaasinen, CrossFit Lappeenranta, Finland
Mika Forsström, CrossFit Kerava, Finland
Markku Sorosuo, CrossFit Lohja, Finland
Ville Juhani Aalto, CrossFit Porvoo, Finland
Essi Koskinen, CrossFit Oulu, Finland
Paavo Sjöblom, CrossFit Tuusula, Finland
Antti Kylänpää, CrossFit Oulu, Finland
Joona Noutere, CrossFit Central NLA, Nummela, Finland
Marja Kokko, CrossFit Loviisa, Finland
Mikael Karlsson, CrossFit Norrort, Sollentuna, Sweden
Ben Liuzzi, CrossFit Central Helsinki, Finland
Aleksi Hakunti, Reebok CrossFit Turku, Finland
Johan Andersson, CrossFit Göta, Gothenburg, Sweden
Jonas Flank, CrossFit Falun, Sweden
Christoffer Bierich, CrossFit Västkusten, Gothenburg, Sweden
Benny Åhlstedt, CrossFit Örebro, Sweden
Ola Kjellman, CrossFit LSC, Stenkullen, Sweden
Michael Svanöe, CrossFit LSC, Stenkullen, Sweden
Daniel Eriksson, Reebok CrossFit Kiruna, Sweden
Martin Altemark, CrossFit Uppsala, Sweden
Per Widén, CrossFit Karlstad, Sweden
Daniel Thysell, Gripen CrossFit, Malmö, Sweden
Johan Roth, CrossFit Kalmar, Sweden

--
Additional affiliate owner names added since October 19:

Tor Sverrisson, CrossFit Filborna Arena, Helsingborg, Sweden
Madelene Fridh, CrossFit Helsingborg, Sweden
Gisli Simonarson, CrossFit Gofitness, Helsingborg, Sweden
Joakim Lundgren, CrossFit STHLM, Stockholm, Sweden
Elisabeth Svensson, CrossFit Mjölby, Sweden

*****

Dale, yours is the first response of any kind that we have had from anyone at HQ since October 19. Since then SATS has opened their affiliate and written in an online forum that they are interested in opening up to 70 additional affiliates. (Sweden currently has fewer than 40 affiliates.) 2 other chain gyms here in Stockholm as well as Gold's Gym in Åre and Östersund have announced that they will soon be opening affiliates that will be open to their regular members. Affiliates in Finland report that the same thing is happening there. As a businessperson I can't blame the chains for wanting to do so, but it is very clear that: A) Doing so under the conditions described is against the spirit of the affiliate agreement, and B) it will be at the expense of owner-operated affiliates.

I may be completely wrong about this. HQ may be paying close attention to this and may have a great plan to protect owner-operators, the group that is most responsible for the success that CrossFit has enjoyed to date. If that is the case, please let us know about it. Those of us whose names appear on the October 19 letter have been waiting for some kind of answer and we have yet to see that anything positive is happening on this front.

Respectfully,

Dane
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Old 11-29-2012, 10:37 AM   #4
Dane Thomas
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Re: Now that Anthos is defeated let's take a look into this

Dale,

In response to your remark on the other thread (the one that I shouldn't have tried to hijack) I realize that my actions must seem to you like a ready, fire, aim situation, but please try to understand how it seems from our point of view. We did everything we could to go through the proper channels, to explain the danger of the avalanche that we could see building up and even to suggest methods of control. I talked with dozens of other affiliate owners in a number of different countries, many of whom have seen similar developments in their own local markets. I took all of that into account during my communication with Kathy, but never got any indication from her that she saw it as anything other than just another affiliate opening in a globo-gym.

Most of those who take the time to understand this situation conclude that this is a new and different type of negative development. It could be easily dealt with through proper due diligence and enforcement of existing affiliation guidelines, but the combination of workload and distance in combination with language and cultural differences have made it impossible for Affiliate Support to stay on top of everything. My day job is as a consultant for the design and administration of support systems including incident, problem, change and configuration management, so I recognize some of the signs of an organization where the pressures associated with rapid growth have exposed weaknesses in resources, processes and tools.

Our goal here from the beginning was to point out a troubling situation and offer suggestions on how to make it better. During September we tried doing it through Affiliate Support and through Kathy. That didn't work. During October we tried going directly to everybody that we had previously had contact with at HQ. 40 days later we were still waiting for an answer.

If it makes any difference to you I can send full transcripts of the email and FB chat that I had with Kathy on this. They will back up the fact that we got nowhere trying to deal with this in a reasonable, methodical manner.

Posting this here wasn't my first or second choice. An acknowledgment of receipt from somebody at HQ saying something along the lines of: "We understand. This does seem like a different situation. We're not sure how best to deal with it yet, but we are working on it. Thanks for your concern and your suggestions." would have been enough to make us feel that things might be on the right track. We weren't demanding action, just hoping for signs of understanding. That was our goal then, and that remains our goal today.

Thanks again for your response.
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Old 12-01-2012, 01:09 AM   #5
Dale F. Saran
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Re: Now that Anthos is defeated let's take a look into this

Dane - you obviously know how to use the IPTheft form because you used it in another case. But instead of doing that in a similar situation, you took the time to rally together some kind of "petition", present it to someone else, which wasn't even received by our folks initially. I saw Kathy's message to you that she hadn't received it because you were using a different email address than the one listed in your account. She then engaged you in a lengthy conversation - and you continue to publicly claim that "no one" addressed the issue. That's simply not true, by your own admission.

It was addressed; I can read it in the instant messages between you and Kathy. I don't think you fully understood the import of what she was saying. That's fine, but don't say "no one addressed it" and that you were "ignored." I can see the whole conversation.

So you then jump into the Anthos thread where, ironically, you talk about your age and maturity differentiating you from Russell's public post, and then do the same thing.

Again, you know how to use the IPTheft form. You've been in touch with my legal department. I'm aware of the SATS situation. If they are exceeding the scope of our license agreement as you claim, then please, let's handle that as I've described. Not with the villagers running to the castle with pitchforks and threats, without having at least attempted to use the processes that are already in place.

The applicant for SATS was originally reported to us as having 'jumped the gun' in advertising by three separate Swedish Affils. We handled that matter as they were hung up in finishing the affiliation process, so it turned out counsel was not necessary. That matter was only closed within the last two-three weeks. (My records show 11/13). So far what I hear is a lot of panic over the equivalent of Gold's affiliating, but I don't see a lot of hard evidence that the licensee of record has done anything wrong.

Keep in mind, Dane, we have affiliates in the US who were in a Gold's. One of our Level I cert staff had an affiliate inside a Gold's where he trained a certain CrossFit Games Champ. Now, if this is truly "different" as you describe, I need more than your loud declaration of that. Right now it's you making public claims without providing anything to support it, except that SATS is a big globo gym and quotes from Coach Glassman.

Now, why don't we take this into the IPTheft form and work through the process there? Agreed? I'll address your concerns and we'll find out what's going on. I think we do a pretty good job of doing that for our affiliates and have earned just a little bit of the benefit of the doubt, Dane.
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Old 12-01-2012, 01:35 AM   #6
Lan Halbert
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Re: Now that Anthos is defeated let's take a look into this

Dale,

Is there a central place on the net where crossfitters can search through the legal cases HQ has filed that includes the reason for going to court and the case verdicts?

IMO that would be a valuable informational asset for the community at-large.

If there is such a place would you be so kind to point me in that direction?

Any response would be greatly appreciated. Thanks.
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Old 12-01-2012, 04:54 AM   #7
Dane Thomas
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Re: Now that Anthos is defeated let's take a look into this

Dale,

Once again, thank you for your reply. I’ll apologize again for the tone and manner of my initial presentation. I violated one of my favorite axioms – “Never attribute to malice that which can be explained by misunderstanding or misinformation.” My ill-considered attack forced you into a defensive stance. If I had presented things in a better manner all along we all might have been able to apply our energies toward understanding each other rather than toward defending and counter-punching. I sincerely hope that it is not too late for that.

With the hope of fostering a more complete understanding, I'll address your comments:

- We felt that the IPTheft form was probably the wrong tool for the SATS case for two reasons:
A) The problem as we saw it was with the affiliate approval process, not IPTheft, and
B) We saw a need to call attention to the larger conceptual issue of HQ allowing corporate-owned affiliates rather than just focusing on a single instance.

- We contacted other affiliate owners because we wanted to know if others also saw it as a problem. When it became obvious that they did, we wanted HQ to know that it was a concern for many of us, not just one person complaining.

- When Kathy didn’t reply to my initial e-mail on September 22 I contacted her via FB chat on the 26th. She then found my message and over the next few days we were able to discuss it.

- During the exchange that I had with Kathy I never got the feeling that she understood our position. That feeling of not being understood is what made me feel that the issue has yet to be addressed and that it has been ignored. It also might have prevented me from fully understanding the import of what she was saying. Sometimes I am very dense about that kind of thing, so I would honestly appreciate it if you could spell it out for me. If this is all due to my misunderstanding, I really need your help here. You have the entire transcript, so please let me know exactly where you think that I missed her point(s).

- We are not villagers with pitchforks. We are several dozen concerned affiliate owners from a variety of countries, each heavily invested in protecting and expanding upon the CrossFit brand. We are trying to call attention to what we perceive as an unrecognized threat from the outside. We are not making any threats of our own. We identified a problem that we have not seen addressed by CrossFit HQ in print or on video. We tried to describe it and present it to Affiliate Support because it seemed like the most appropriate way to handle it. I became the author because I’m the only one in the group that has English as a native language.

When it seemed that Kathy didn’t understand what we were talking about during our exchange at the end of September we restated our case and I sent it to everybody who I had ever previously had a useful dialog with at HQ. 40 days later there was still no response.

We have not yet seen any response that would indicate that you understand our concern either. We know that the IPTheft form works and your department has proven time and again that it is the most responsive and professional part of HQ that any of us have dealt with, but this isn’t about solving individual incidents after the fact.

This is not about SATS or Johan. It is not about any individual affiliate and it is not about IP theft. It is not about affiliates being located in globo-gyms or whether or not good training can occur in one (we know that it can!). It is about recognizing a threat to owner-operated affiliates and the CrossFit brand and making sure that Affiliate Support gets the resources they need to implement improved due diligence and follow-up processes that can reduce the danger of that threat.

***

I’ll try to be more concise:

We see it as a threat that multi-national globo-gym corporate management is allowed to finance and open affiliates as if they were owner-operators.

We think that some good ways to minimize that threat could include:

1) Amendment (clarification) of existing affiliation policies:
a. Verifying that affiliates are owner-operated. Having outside investors is OK, but the affiliate business license must be in the applicant’s own name, not that of their investors.
b. Verifying that arrangements for rent, insurance, equipment purchase/leasing etc. are in the name of the affiliate

2) Enforcement and follow-up of existing policies that require affiliates to be run as truly independent entities, such as:
a. A requirement to show that the affiliate and “parent” gym have independent membership structures
b. Requirements for independent affiliate websites should include periodic spot-checks to insure compliance.
c. A requirement forbidding co-marketing with the "parent" gym

HQ would of course retain the right to make case-by-case judgments and exceptions to these and other policies as they see fit.

We would appreciate some acknowledgment that HQ has understood our concerns, that our suggestions will be considered and that we will eventually be informed of decisions and actions on this matter.

***

I know, I should have just written that back in September. Hindsight is 20/20.
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Old 12-01-2012, 09:31 AM   #8
Russell Berger
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Re: Now that Anthos is defeated let's take a look into this

Dane,
I’m not sure why you are still asking for acknowledgement that HQ understands your concerns. You’ve spoken directly with the head of our Legal Department and the head of our Affiliate Support Team. It sounds as if you are equating our disagreement about your concerns with a misunderstanding of your concerns. This is not the case.

First, CrossFit HQ is extremely vigilant about “CrossFit” classes where an L1 trainer is not present. If you have any evidence that a gym is holding “CrossFit” classes without an L1 trainer, please report them as soon as possible to the Affiliate Support Team. This behavior is not acceptable and we will not tolerate it. 

These issues, however, do not seem to be your real concern:
Quote:
“Perhaps the most important difference is that a Globo-gym’s potential return on their investment is not dependent upon the quality of training provided. Reducing the perceived value of competing owner-operated affiliates can be sufficient for their purposes.”
This argument is based on two assumptions. First, you're assuming that the fellow you are worried about is attempting to get a slice of the CrossFit market without creating anything of value. Your only evidence for this seems to be his current management role in a globo-gym chain and some statements he made about opening more Affiliates. We would obviously prevent the latter, and the former is not incriminating by itself. Unless you’ve got more evidence, I’d probably apply your favorite axiom to this new Affiliate as well: “Never attribute to malice that which can be explained by misunderstanding or misinformation.”

Your second assumption (which piggybacks on the first) is that people won't be able distinguish between different professional practices, and therefore markets won’t punish inferior service. We’ve heard this concern before. There’s one problem with this argument however– there’s no evidence of successful “low-quality” affiliates driving out higher-quality affiliates.

On the contrary – the affiliates that are most committed to high quality training are also our most successful affiliates. 

To quote Greg Glassman, “if you can accept the three premises that 1) markets are largely unknowable, 2) excellence is obvious to everyone, and 3) free markets reward excellence, it becomes obvious that the most effective business plan comes from achieving excellence and letting the market bring the money to you.”

Effective training, like effective law and medical practices, cannot be commoditized. This is not CrossFit HQ’s decision – it is simply impossible to commoditize effective professional practices. Consumers will choose between different CrossFit affiliates just as they choose between different dentists and lawyers.

If your concerns are true and this gym does violate the License Agreement, CrossFit HQ will fix the situation, but your concerns about an illegitimate business persisting are unfounded.
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Old 12-01-2012, 12:52 PM   #9
Larry Bruce
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Re: Now that Anthos is defeated let's take a look into this

Russell, what's company policy regarding "globo-gyms" advertising
"Crossfit-like" training?

Also, I'm curious if "Extreme Couture" in Etobicoke Ontario is a legitimate affiliate, as they offer a class called "Crossfit".
It seems legit ...
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Old 12-01-2012, 05:33 PM   #10
Dane Thomas
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Re: Now that Anthos is defeated let's take a look into this

Russell,

Thanks for your opinion, and specifically for writing what you think my assumptions are. It is the detailed responses that we have gotten from you, Dale and Kathy that give us the impression that we have not yet succeeded at communicating our concerns. We may yet be able to get to the heart of this matter. Once there we hope to find out what HQ really thinks.

Going point by point through your post -

- We are glad that CrossFit HQ is vigilant about classes without an L1 trainer. That is important, but you were right to note that that is not our primary concern.

- My point regarding ROI is not based upon the assumptions that you cite. We know that upper management at his particular gym chain has expressed concern about the loss of customers to owner-operated affiliates in town. By logical extension other chains should be worried about that as well. With CrossFit appearing on the covers of fitness magazines and Reebok commercials on TV and a number of successful owner-operated 100% CrossFit boxes popping up it is not difficult for them to figure out where their members are going.

The challenge for them is what to do about it. By opening affiliates of their own corporate globo-gyms can take advantage of the wave of popularity that has been created by the superior training and community experiences provided by the best owner-operated affiliates.

We are not assuming that this specific affiliate will get a slice of the market without creating anything of value. What concerns us is that corporate globo-gyms who are currently losing clients to owner-operated 100% CrossFit affiliates have a very different definition of the value that they must derive to make their investment worth their while.

- We don’t think that this particular man intends to open more than one affiliate, but we have seen that his corporation is interested in doing so and they certainly have the resources and access to L1 trainers to do so.

- As far as the public’s ability to distinguish is concerned, we agree that given time, markets will punish inferior service. What we find concerning is HQ’s willingness to open the game and give equal billing to players who have fundamentally different thresholds of entry, levels of risk and definitions of success. If a person reads about CrossFit in a magazine or sees it on TV and goes on to finds an officially recognized affiliate at crossfit.com, they are likely today to find an owner-operated affiliate. Some provide higher quality training than others, but independent owner-operated affiliates live or die by their ability to deliver a quality CrossFit training and community experience and to charge enough in the process to cover the costs of the entire operation.

That is not the case for corporate globo-gym affiliates having CrossFit as only one of their many offerings. There is nothing to prevent them from delivering quality, but their fundamental survival does not depend on it. There is also nothing to prevent them from charging as much as owner-operated affiliates must charge to survive, but that isn’t likely to help them hang on to the members that they have been losing to owner-operated affiliates, so it would better serve their purposes to simply add CrossFit classes to their current menu and keep the prices as reasonable as possible (which is what we see happening).

Until now the power to shape the perceptions of what CrossFit really is has been entrusted to owner-operated affiliates. By allowing corporate globo-gyms to affiliate and make CrossFit just another one of their classes HQ is giving that power to a new group with a number of fundamentally different motivating factors.

We agree that the most effective business plan comes from achieving excellence and letting the market bring the money to you. One of the driving factors in the success of CrossFit thus far is the fact that owner-operated affiliates must operate on that principle to survive and thrive. How can opening up affiliation to a category of owners that has proven time and time again that they do not operate by those same principles possibly be considered a good thing?

Your last sentence just makes me that much more certain that you have missed our point. This isn’t about one gym in Stockholm. This isn’t about one place not following the spirit or the letter of the affiliate agreement. It isn’t about whether his business is legitimate or not. This isn’t about IP theft. This is not about trainers running affiliates out of globo gyms. You and Dale and Kathy have been addressing the convenient tree that you clearly understand but have either missed out on or judiciously avoided the forest, and none of you have bothered to comment on our process improvement suggestions.

We would like to know the following:
1) Is corporate globo-gym ownership of affiliates recognized by HQ as a potential danger?
2) Is corporate globo-gym ownership of affiliates seen by HQ as an opportunity to open additional affiliates?
3) Does HQ recognize the need to do a better job of verifying and enforcing the terms of the affiliate agreement that protect the owner-operators who have built this business?
4) If the answer to 3 is yes, is there a plan for this?

If you truly understand these concepts and questions, please respond directly to them. We might agree or we might not, but it is much easier to deal with a legitimate difference of opinion knowing that the other party truly understands your point of view.

Thank you.

Last edited by Dane Thomas : 12-01-2012 at 05:44 PM.
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