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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 12-07-2011, 10:52 AM   #41
Katherine Derbyshire
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Re: $40 per month, unlimited access, no training

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Originally Posted by Aaron Lengel View Post
I'm also likely going to form an LLC in hopes of limiting personal liability. My question is if someone gets hurt and sues, if I have an LLC, they could sue the LLC but would I still be personally liable?
That's something to ask a lawyer about. My understanding is that the majority owners of a small corporation like that can still be held personally liable: you can't magic your liability away by creating a fictional entity that is still "you." On the other hand, the LLC's business insurance will need to get used up before anyone can go after your personal assets.

But I am not a lawyer.

Katherine
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Old 12-07-2011, 10:55 AM   #42
Brian Strump
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Re: $40 per month, unlimited access, no training

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Originally Posted by Aaron Lengel View Post
I am actually thinking about doing something similar to this with my garage gym. I've converted my barn into a gym for myself and a few friends to workout at... it's been great so far! However, as you can imagine it is growing in popularity. I have a job, family, and the last thing I want to do is start running a gym. The purpose of the space was not to make money but to have a space where people that wanted to workout could do so together. We already have $3-$4000 worth of equipment which allows 4-7 people to workout together comfortably but I don't want to keep buying more equipment out of my pocket so I'm instituting a monthly fee to hopefully help cover equipment costs.

I'm also likely going to form an LLC in hopes of limiting personal liability. My question is if someone gets hurt and sues, if I have an LLC, they could sue the LLC but would I still be personally liable?

Thanks,
Aaron
I'm not a lawyer, but there are some other factors. You still need professional and general liability insurance to protect your assets too.

But mostly, keep in mind that we live in a country where the obese can sue McDonalds, and you can sue Starbucks when YOU spill hot coffee in your lap! Just because you have an LLC, corp, etc, does not mean that you can't be sued, and that fighting a suit won't cost you money to do so.

I'm sure a lawyer will chime in with more info than me.

But that's my 2c, keep the change.
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Old 12-07-2011, 11:56 AM   #43
Aaron Lengel
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Re: $40 per month, unlimited access, no training

Thanks for the thoughts! After talking to a few people my plan moving forward will be, unless a lawyer says something different... Form an LLC and deed the barn property to the "property LLC". The property LLC will likely have to have liability insurance in case someone hurts themselves on the property, ie slips on ice (not workout related) as homeowners insurance would not pay for this. I'll then form another LLC, which will be the "gym LLC", that will lease the space from the property LLC. I likely won't have liability insurance for the gym LLC but if someone sues they'll take a couple thousand dollars worth of equipment, oh well. If there are any lawyers that look at this let me know if I'm an idiot.

Thanks,
Aaron
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Old 12-07-2011, 02:12 PM   #44
Brian Strump
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Re: $40 per month, unlimited access, no training

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Originally Posted by Aaron Lengel View Post
Thanks for the thoughts! After talking to a few people my plan moving forward will be, unless a lawyer says something different... Form an LLC and deed the barn property to the "property LLC". The property LLC will likely have to have liability insurance in case someone hurts themselves on the property, ie slips on ice (not workout related) as homeowners insurance would not pay for this. I'll then form another LLC, which will be the "gym LLC", that will lease the space from the property LLC. I likely won't have liability insurance for the gym LLC but if someone sues they'll take a couple thousand dollars worth of equipment, oh well. If there are any lawyers that look at this let me know if I'm an idiot.

Thanks,
Aaron

2 things.

1. You're an idiot if you think that by not having liability insurance, all someone will get is some of your equipment. Just because the law says that, doesn't mean a judge can't interpret it another way.

2. If you are becoming an affiliate, liability insurance is required.
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Old 12-07-2011, 03:59 PM   #45
Aaron Lengel
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Re: $40 per month, unlimited access, no training

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2 things.

1. You're an idiot
Thanks for confirming what I already knew!
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Old 12-07-2011, 04:30 PM   #46
Brian Strump
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Re: $40 per month, unlimited access, no training

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Thanks for confirming what I already knew!
I'm here to state the obvious.

But in all seriousness, those are not issues you're going to want to concern yourself with, when you've got a barn full of people paying you for your services.
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Old 12-08-2011, 08:49 AM   #47
Brendan McNamar
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Re: $40 per month, unlimited access, no training

Quick thought Aaron,

If your goal is to provide a service to your community you may want to talk to a lawyer about the possibility of setting up a non profit gym. The reason being is often the directors and employees of non profits are better protected from personal liability. Non-profit can pay you a reasonable market rate rent on the space and you become a land lord.

Again I'm not a lawyer so you have to run it by one who knows your state's laws but be careful not to over engineer things. Promoting public health is a legit non profit activity. Our legal system generally is designed to protect people trying to do public good, not for profit.

You can still charge a fee you just have to use the fee to support the gym. Pay rent, buy equipment, buy an insurance policy you could even hire a trainer. Just as long as at the end of the year there isn't a lot of money left over. You will be required to file a non profit tax return to account for the incoming and outgoing $, but it is really no big deal.
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Old 12-08-2011, 09:00 AM   #48
Chris Cooper
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Re: $40 per month, unlimited access, no training

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Originally Posted by Aaron Lengel View Post
Thanks for the thoughts! After talking to a few people my plan moving forward will be, unless a lawyer says something different... Form an LLC and deed the barn property to the "property LLC". The property LLC will likely have to have liability insurance in case someone hurts themselves on the property, ie slips on ice (not workout related) as homeowners insurance would not pay for this. I'll then form another LLC, which will be the "gym LLC", that will lease the space from the property LLC. I likely won't have liability insurance for the gym LLC but if someone sues they'll take a couple thousand dollars worth of equipment, oh well. If there are any lawyers that look at this let me know if I'm an idiot.

Thanks,
Aaron
An LLC isn't bulletproof when it comes to personal liability. Debt liability, maybe, but if you're perceived as negligent (and failure to carry insurance could apply as negligence, at least in Ontario,) a personal liability lawyer would walk right through that. This is why most insurance companies settle. Even if you 'won,' you'd still be paying court costs SOMEHOW, and I doubt your defense team would take a cheque from your sued company....
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Old 12-11-2011, 11:15 AM   #49
Sheldon Victorine
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Re: $40 per month, unlimited access, no training

I just signed onto a box that does that. They do have classes and they are not 24 hours, however they are open late and they dont close after class so its more of a open gym scenario. Its just really convenient. Though i do love the class and the community aspect of crossfit; when i get off of work at like 2 or 3 PM i would have to wait until 5 or 6 to go to class and i would have to do the WOD posted and by the time i leave it would be like 630 or 7 and i still have to go cook dinner and all that. So now that i am a part of this new box as soon as i get off of work i shoot over there, do the wod, and im free'd up to do what i need to do.
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Old 12-11-2011, 11:53 PM   #50
Aushion Chatman
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Re: $40 per month, unlimited access, no training

Seems like a model for experienced clients...

I think this is the type of gym that opens up and other affiliates in the area see a few members jump ship because of cost/convenience. Some may miss the community and come back...but cost and convenience are powerful motivators as well.
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