Breaking: CrossFit Announces Affiliation Fee Increase, L2 Requirement for Owners
In an email to affiliate owners today, CrossFit CEO Don Faul announced the first affiliation fee increase in 11 years.
In an exclusive interview with The Morning Chalk Up, Faul said,
- “For affiliates next year, effective on their anniversary date, which is when they pay their annual fee, the price will change…Most of our affiliates currently pay $3,000 (a year) today; that is going to increase to $4,500. We will have two “follow-on” tiers that apply to (affiliates in) other countries around the world.”
One big thing: There has been a palpable sense in the community that an affiliation fee increase or change to the affiliate model was coming, and with this news, we now know the details.
The details: In the email to affiliate owners, Faul wrote that “Despite inflation and higher costs — which have risen by an average of 74% — CrossFit has not raised prices for 11 years. In order to sustain a healthy business and invest in resources to achieve our goals, we need to increase our affiliation fee in the new year.”
- The email continued, “We did not take the idea of an increase lightly. Our decision reflects a tremendous amount of thought and research, centered on understanding and serving your needs while allowing for reinvestment of fees back into the ecosystem.”
- “We remain committed to making sure you have the support, education, and tools you need to build a strong and sustainable business while ensuring you continue to have the flexibility and freedom to run your affiliate in a way that best serves your community,” Faul concluded.
Importantly, Faul also noted that as recently as 2022, CrossFit “was breakeven,” meaning that it returned zero profit that year. “That’s not good enough for us,” Faul said, “that [doesn’t] allow us to make the types of investments in our community, in growth, that we need moving forward.”
Affiliates that currently pay a grandfathered affiliation fee (those who were affiliated prior to the increase to $3,000) will see an increase but not fully to $4,500 immediately. They will be on a graduated increase schedule to level-set them slowly.
- Affiliates in areas of the world with struggling economies in comparison to the United States will see a smaller affiliation fee increase as well.
A logical question that will likely follow this news in the minds of many affiliate owners is what additional value CrossFit will provide to offset this fee increase. The email to affiliate owners highlighted three areas in which CrossFit has “commitment and plans to deliver additional value”:
- The first area is “Growth.” The email to affiliates stated, “In order to get new members through your front door, we are investing heavily in technology, personnel, and marketing to help inform brand perception, storytelling, campaigns, and web/mobile enhancements. These improvements will help you build a strong, sustainable business.”
- The second area is “Quality.” Faul’s email noted, “We are raising our standard for owners and coaches in 2024, which will translate to a better member experience.”
- What this means in practice is that as part of the affiliate renewal process in 2024, owners will receive a $500 credit to be used toward a Level 1 or Level 2 Certificate Course or the Online Level 1 for the owner or a coach at the affiliate.
It’s worth noting, however, that CrossFit is adding a requirement that “all affiliate owners — existing and new — will have 12 months following their renewal signing to enroll in their L2 certification.” According to Faul, approximately half of all affiliate owners have an L2 or higher.
- The third area is “Tools and Support.” Here, the email to affiliates stressed the need in today’s market to provide business education, coaching and tools for affiliate owners.
- “We will continue to offer and invest into CAP as part of your affiliation fee. We will also continue to expand the reach and impact of our field support, business coaching, regional summits, and other opportunities to learn and share success stories,” the email continued.
It’s also worth noting that beginning in 2024, CrossFit will allow a monthly payment option with no additional fees. Owners had previously been allowed to pay monthly, but there was a 20% fee under that arrangement.
What they are saying: To address questions and concerns, CrossFit has created an FAQ page and will be hosting town halls on December 1 and 4.
In his interview with The Morning Chalk Up, Faul stressed that this decision was made after long and careful consideration.
- “How do you get to $4,500?” he said. “This is a big deal, a really important decision, so we’ve spent the last six months, informed by conversations with hundreds of owners, looking at a ton of data to really understand the state of the community. We looked at the impact of inflation over a decade, we looked at a bottoms-up [view], talking to owners about how they value things like the brand, how many leads they get each year, what about affiliate summits, [and] the affiliate toolkit. We tried to be as objective and thoughtful as we could; we did our homework on this. We were diligent and thoughtful, recognizing that it is important.”
When asked how he expected affiliate owners and the community to respond to this news, Faul said, “[The] good news is that we’ve been talking to owners [about this] for the last six months to a year.”
- “We’ve heard consistently from owners that they want us to raise the bar,” Faul continued, “what I expect to hear is…it’s been over a decade; it makes sense.”
- Faul: “I think there are going to be a lot of folks saying…the amount of value and resources that we get today versus ten years ago is night and day.”
- “We will have some owners for sure, let’s recognize, you’re always going to get some folks who say ‘gosh, I don’t love an increase in price,’” he said. “And we recognize that there are some owners who are just getting by financially, [and] this is going to be hard for them. Our point of view is that the right [solution] for that is our continued investment that we make to help them build strong businesses.”
By the numbers: If an affiliate has 125 members, which Faul said was an average client load for a CrossFit affiliate, then a $1,500 increase in affiliation fees will translate into $1 more per month, per member.
The bottom line: This is important news that will likely spawn much debate. Faul expects mostly positive to neutral reactions from affiliate owners based on months of summits and research. For many, this will be a nominal fee increase — for others, it may appear insurmountable. At the end of the day, how much value the owners see in maintaining their affiliation will likely determine their response.