Industry

Gym Owner Opinion Mixed; Some Applaud CrossFit’s Affiliation Fee Announcement, Others Threaten to Leave

December 1, 2023 by
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A schism of opinions and emotion: That was what ensued Thursday in the community when CrossFit LLC announced they’ll be raising affiliate fees in 2024 for the first time in 11 years, a decision that’s proven to be one of the most polarizing of the year.

Remind me: Affiliate fees will increase to $4,500 in 2024 for those currently paying $3,000 a year (the majority of affiliates), while others with grandfathered fees will see a more gradual increase to $4,500.

  • Further, affiliate owners will now be required to be CrossFit Level 2 coaches, and will have 12 months after renewing their affiliation to enroll in the certification, should they not already have it.
  • In return, CrossFit LLC is promising to add more value to affiliates, so they can “build a strong, sustainable business,” said CEO Don Faul.

The reaction: Some gym owners were outraged and immediately announced their intention to deaffiliate their gym from CrossFit, while others strongly supported the decision with an “it’s about time” reaction.

What the “I’m out” camp is saying:

  • “I have a small gym. I can’t afford this fee increase. I’m out.”
  • “What has CrossFit ever done for us? My business is driven on word of mouth, not from the CrossFit brand. I’m out.”
  • “CrossFit promised my rates would never go up, and now they’re going back on their word. I’m out.”
  • “A fifty percent increase? That’s just way too big of a rate increase all at once. I might be out.” 
  • “The timing of the announcement is terrible: right before the end of the year when money is at its tightest.”
  • “The Level 2 requirement is just out of touch, as many gym owners today are investors or have turnkey operations and aren’t even on the floor coaching anymore.”
  • “The Level 2 requirement is nothing but a money grab.”
  • “How does a Level 2 make you more qualified to open a gym than a Level 1?”

What the “it’s about time” camp is saying:

  • “It has been 11 years since we have seen an increase. It’s about time.”
  • “Grandfathering rates never made sense anyway. Not at the member level and not at the affiliate level. It’s about time everyone pays the same affiliate fee.”
  • “It’s about time there’s a Level 2 requirement. It’s absurd you could take your Level 1 and open a gym right away.” 
  • “This is a good business decision on CrossFit’s part and it is what is needed to grow the ecosystem.”
  • “This should create a much-needed barrier to entry for new gym owners, as it will ensure they treat gym ownership as a business, not just a hobby.”
  • “We have all raised our rates on our members, so it makes sense that CrossFIt also has to raise their rates on us.”

A broken promise: For many owners, the biggest issue is that they were promised their rates would never go up, which in hindsight might just be one of the worst business decisions Greg Glassman, and CrossFit, ever made. 

The reality is, grandfathering rates seems like a nice thing to do for loyal members, but from a business standpoint it can be financial suicide. Many gym owners learned this the hard way and have gone back on their word and raised the grandfathered rates on their members, and now CrossFit is doing the same to the affiliate owner. Still, it doesn’t sit well with many gym owners. 

  • For Pete Mongeau, the owner of Zanshin Fitness In Peachtree Corners, GA, the promise his rate would never increase “was a major selling point from HQ,” he said. “At the time, in 2012, they said get in now, lock it in, because it will soon be increasing.”
  • Brandon Couden, the owner of CrossFit Grandview in Columbus, OH added: “I think what’s concerning is they’re going back on something they said they wouldn’t do, and they look desperate for revenue.”
  • Finally, Craig Patterson, the owner of the former CrossFit Vancouver, remembers Glassman looking him in the eye and promising him his rate would remain at $500 for life. Though no longer affiliated, Patterson suspects many of the early affiliates will leave the brand.

One big thing: This isn’t the first time we have seen affiliate owners up in arms, threatening to deaffiliate from CrossFit.

In 2020, Glassman’s infamous tweet and the ensuing fallout led to hundreds of gyms—1,350—threatening to deaffiliate. In reality, emotions subsided and most didn’t follow through with their threat.

The same could be true here: Emotions are currently high, but if history predicts the future, chances are gym owners will soon calm down and take an approach similar to Arthur Pruneda, the owner of CrossFit Unchained in San Antonio, TX.

  • “At first I was a little perturbed. Then I took emotion out of the equation and thought logically and did some math…If I raise my member rates by $1 (a month) that should more than cover it. I’m over it. It’s not an issue anymore,” he said.

The big picture: According to CrossFit, 2022 was a “breakeven” year for the company, meaning they made zero profit. If this is true, then it’s almost impossible not to see an affiliate rate increase as justified, possibly even necessary, for the future of the brand.

  • “As a business, if you want to be around for the next decade, two decades, five decades, it has an obligation to do things to remain sustainable,” said Jason Khalipa, the 2008 CrossFit Games champion and the owner of the NCFIT brand, a company with CrossFit gyms around the world.

The bigger questions then are twofold: Can CrossFit deliver its promise to add more value to affiliates? And how many affiliates will decide to continue giving their money to CrossFit?

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