CrossFit Affiliate Competition

By Russell Berger

In Affiliation

December 16, 2008

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Russell Berger is an affiliate owner (CrossFit Huntsville) in Alabama. He has some strong ideas about the perception that increased numbers of CrossFit affiliates are dangerous to the long-term health of CrossFit:

CrossFit is thriving. Ask an owner from one of nearly a thousand CrossFit affiliates worldwide what they thought they would be doing for a living five years ago, and running a CrossFit gym probably didn’t make their short-lists. Some affiliate owners, myself included, hadn’t even heard of CrossFit five years ago. What started as a grass-roots fitness movement has quickly developed into an international wild-fire.

Unfortunately, not everyone sees this as a good thing. As trainers, we owe our livelihood to the efficacy of CrossFit. Functional training is no longer reserved for our military warriors and law enforcement officers —John Q. Public is clamoring for the practical, effective fitness of CrossFit. On the other hand, higher demand means greater competition—even among ourselves. Some affiliate owners are waking up to find new CrossFit boxes setting up shop right across the street, theoretically stealing current and future clients. Sometimes, that new box is being opened by someone that affiliate trained, which leads to a host of other complaints.

Whether you feel that competition is good or bad is really not important. Until something changes, it simply is. If you embrace it, it will fuel your business. In most circumstances it improves revenue and client bases for every party involved by providing greater choice to clients and increasing awareness and demand. Even if you are competing with unaffiliated imposters, your goal is product superiority. Clients can and will see the subtle differences between good and bad training, and will always go to the gym that serves their desires best. If you feel CrossFit HQ should protect you from legitimate competition, there is a good chance you’re not doing your job. As I said before, “Quit feeling sorry for yourself and keep working.”

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27 Comments on “CrossFit Affiliate Competition”

1

wrote …

Great commentary about competition and the stories were perfect in relation to today's disfunctional economy (i.e. everyone wants a hand out). Thank you for perpetuating the continuum (and need) of capitalism and free markets!

2

wrote …

Great article... I would impress upon anyone who has or is thinking about opening a gym -- just because you have your level one cert does not make you a good trainer. There are so many variables that are involved in training and one would be silly to think that they could provide a quality product with this cert alone. In my opinion Crossfit should limit affiliate ownership to people with level 2 certs only. (even though this isnt the end all to being a good trainer) As far as opening a box, have some respect for other affiliates and dont open a space "across the street" from another crossfit gym. As mentioned in the article, if you are a better trainer the clients will come to you. You shouldnt need to, or want to open a box so close to another with the intent of "stealing" clients

3

Aaron Shaffer wrote …

Good stuff. The Economist would be proud, haha...

4

Stephen Wakefoose wrote …

Great article! As someome who is looking to attend a cert and affliate this year at first I saw other affliates slowly encroach on the area I want to serve. Then it happened I met some people who where looking to affliate in the same area and are going through the process right now! I'm really not worried however because just like McDonalds and Burker King exist on the same corner so can we. I am not them and I know I can offer a different type of product and will attract a differnet type of client because I am different. We must also keep integrity in mind. From a martial art background the best thing an instructor can do is recognize when his student is beyond his ability and point them in the direction where he can continue to grow. Another thought I've been to some McDonalds (I know bad example right) tht I would never go to again, the customer service sucked, or it was dirty etc. This open affiliation allows the guy or girl with the best product to thrive and weed out the suckas, why protect the weak? My $.02

Foose Downingtown, PA

5

wrote …

Great post, Russell.

Fortunately enough for us here in the First Coast, as Jacksonville Florida is called, we are priviliged to be a part of the best CrossFit COMMUNITY. I emphasize community because this is what it is all about. With the oversight and guidance of TJ Cooper/CrossFit East and our fellow affiliates, respectively: Doug Lane/CrossFit Amelia Island, our group at CrossFit JAX, Tom Delaney/CrossFit West Jax and finally our newest affiliate Justin Bergh/CrossFit SouthSide, we are a tight-knit family that promote, support and embrace one another's box and gym. Because of the community and the respect shown to one another, I can honestly say that there is no competition amongst us in the sense of the 'business' side of the house.

Whenever a prospective client/member/athlete inquires with us, the first question we ask is "Where in the area are you located?". From there, it is a matter of convenience for them on where they desire to train. Because of community, we consistently refer inquiries to one another. This is how it should be. In the end, the prospective member will train where he/she decides whether it be convenience of location, membership fee, or quality of environment (amenities etc).

6

wrote …

Terrific article Russ! Couldn't agree more. We've got a ton of affiliates in the Northern Virginia/Washington DC area, and from the looks of it we're all doing fine, even us, the new kids on the block.

Let individuals make decisions they feel are in their best interests: free ideas and free markets.

7

wrote …

Great article on what can be a sticky subject. A free-market is in the true spirit of CrossFit.
To use an analogy from my other line of work: Starbucks. Why did so many stores recently have to close? Because of oversaturation? partly, but the real issue was that the rapid growth weakened the quality of the product. When our focus was customer first, business grew, when our focus became pushing sales, business slummped.

Russell makes a great point in his article- stay focused on the basics, what's good for CrossFit is good for you and a quality product will sell itself. As we train, lets all be sure we deliver that quality product as our #1 goal.

8

wrote …

This article should've been titled: "Survival of the CrossFittest (Affiliate)"

I wholeheartedly agree. If you understand the CF mentality, competition should drive you to new heights. More to the point: our focus on excellence should expose poor and ineffective competition like a quad-dominant nooB trying Fran for the first time without the assistance of a mirror or physio-ball.

I understand that the above is incredibly idealistic (naive?), but that's the whole point. CrossFit as a concept is the ideal. Everything about what we do should be approached with that in mind.

The day that CrossFit is spoken of in the same frame of reference as Gold's is the day that "CrossFit" no longer has any meaning. A cookie-cutter franchise approach with "operations" manuals and corporate rules-of-engagement will only dilute CrossFit's potency, ultimately driving the plague of a corporate mentality and eventually a nearly complete loss of focus on what's important (NSCA anyone?).

Such a day would be extremely sad for the CF Faithful, and, IMHO, almost guarantee an uprising and break-away from such a development.

You want to open up across the street from me? Whoever wins (probably not you, hehe), the real winners are the athletes and the integrity of CF nation. The fittest has survived. This is, indeed, good for CrossFit as well as other affiliate owners everywhere.

CFL1 certified? Want an afiliate? Great. Go for it. Just understand that in this type of competition there is no scaling and that your name and the CrossFit name is on the line.

3-2-1. . . go.

9

wrote …

Great read. Russell, you nailed it.

These are just my general comments, not directed at anybody.

1. "CrossFit cardio" might be an atrocity to some, but a gateway drug to others.
2. There are no affiliation fees for my garage gym or the MWR gym on post.
3. You don't have to be the fastest gazelle, only faster than the fastest lion.
4. You don't have to be the fastest lion, just faster than the slowest gazelle.
5. Competitive clauses....kinda like not hitting "start" on your watch when doing five rounds for time.

The absolute beauty of the low-cost affiliation fee is exactly as discussed - either be GOOD, work for that excellence as a trainer, build community, and people will MOVE to live near your affiliate, or you will not make it.

Passion, virtuosity, leadership, and a bit of common sense probably will get you to go a lot farther than a "protected" zone or some rules.

But what do I know?

10

wrote …

My partners and I are moving fast and furious to establish ourselves as the premiere CrossFit facility in our area to inhibit competitors so that we can effectively spread the CF philosopy as we passionately learned it. To do so, we are taking significant financial risk primarily because we are in a city with a high cost of living and we want to do this full time.


Let me give you some reasons why territories and standards make sense:


If Joe-Blow with a rich parent or a trust fund decides to open a bigger, nicer affiliate down the street and pays his trainers significantly more, and charges his clients less - your business will suffer especially if you're in your first couple years of operation. I don't care about how good a personal trainer you are - remember, anyone can do CrossFit.


If Joe-Blow gets sloppy and a client is injured and sues or, worse, contacts the media, I guarantee that your business will suffer. The first 15 minutes of every conversation with every prospect will go something like: "well, that wasn't us and CrossFit is not dangerous..."


To expand upon another reader's analogy, Starbucks isn't a franchise, nor an affiliation program. Every Starbucks is a corporate owned store because Starbucks wants to control the quality of the product and customer experience. A latte in NYC is the same latte in Fresno, CA. Starbucks knows that if a customer has a bad experience with one location, they may abandon Starbucks for good...and tell their freinds. Coffee may not apply to fitness, but I've had to re-sell prospects on CrossFit after a bad experience elsewhere.


If Starbucks locations competed with each other on service, facility and price, they'd never be the brand and company they are today. And, you'd never get the same latte for the same price anywhere. Competing with each other is not efficient - its a distraction, financially and emotionally. It's like wearing two weight vests for Fran. You can do it, but its gonna hurt and you'll be too tired to do anything else afterward.


Food (or, coffee) for thought.


11

wrote …

Craig,
You didn't make a single point as to how territories would help.

Your argument about the drastic damage a bad affiliate can do has been made since there were 10 affiliates. It sounds like Chicken Little to me.

Have you read the original NY Times story about CrossFit? I have yet to see a negative story slow us down. In fact, the NY Times article dramatically improved our business.

Did you read Johanna's post? She was saying that Starbucks was suffering because it lost its passion. And, as you said, they do much more than establish territories—they fully control every shop!

What percentage of your steady clientele came because of a personal recommendation (word of mouth)? Folks come and go all the time, but when I was working full time at CrossFit Santa Cruz, over 90% of the clients that came and stayed had a personal relationship with another client or one of the trainers before they joined. And, really, the other 10% quickly formed relationships. It's a relationship business. Your potential clients will trust their friends much more than any media source.

Oh, and CrossFit is dangerous. But so is fire and you still use it.

12

wrote …

Craig brings up a very good, and perhaps fatal assumption, in Russel's argument. Russel states that if consumers partake in an inferior CrossFit affiliate, they would eventually gravitate to the superior CrossFit affiliate; survival of the fittest. While this is true of a more experienced CrossFitter who was coached well and understands quality, the John Q Public, newbie CrossFitter's experience at the inferior affiliate will sour him to not only that particular CrossFit affiliate but to all CrossFit. He will abandon his endeavor and turn to Palates, Tai-Bo, or dumbbell curls in front of the mirror. And yes, he will tell his friends and write on his blog that Crossfit sucks and that his trainer was only out for the money. This is our grassroots movement going in the opposite direction.

I welcome and applaud Russel's article since it opens the discussion of growing CrossFit to the masses while at the same time not diluting its principles and quality. CrossFit must be careful not to flood the market so fast as to drop the quality of what we do and eventually become just another opinion in the sea of fitness opinions.

13

wrote …

Gang, having CrossFitted since 2006, and finally having the resources to expand beyond my garage box, the guiding philosophy that drives our endeavor harks back to Coach's Maxim that the market is unknowable, but that the market rewards excellence. Coach laid out the framework for success: focus on fundamentals, stay on task, and truly care about enabling your clients/workout partners/neighbors achieve virtuosity. And, be wary of the guy that would do it for free. That's what my wife and I have done, since attending our level one cert. We truly believe that if one's motives are in the right place, then it shows and you find yourself wanting for a larger space, or more equipment. Such has been the case for my wife and I, who have seen our one-on-one's develop into neighbors wanting to join in, us taking the time to conduct our elements classes, point our "clients" towards the Crossfit Journal, the Crossfit Community, and the like. From this model, "doing Crossfit for love" we have gained the trust of some of San Diego's finest LEO and Fire Department personnel. One is an angel investor, another is our partner, while not doing SWAT. We desperately want to share with others what we've found to be true--Crossfit is life-changing. We are beggars telling another where we found bread. Our affiliate, when it opens, has a business model that allows us to grow one client at a time. There's a well defined community out here in Southern California, and we have experienced nothing but well intentions, words of encouragement, and the like. We stand on tall shoulders here in San Diego County, and believe in synergy. If an affiliate opened across the street from us, we'd be their champion, because if you're making the step up to affiliate, you're doing it for the love of the game. The sustenance will follow.

Keep it open source, brothers and sisters!

Erik and Lauri Preston, soon to be Crossfit San Elijo

14

wrote …

Gang, having CrossFitted since 2006, and finally having the resources to expand beyond my garage box, the guiding philosophy that drives our endeavor harks back to Coach's Maxim that the market is unknowable, but that the market rewards excellence. Coach laid out the framework for success: focus on fundamentals, stay on task, and truly care about enabling your clients/workout partners/neighbors achieve virtuosity. And, be wary of the guy that would do it for free. That's what my wife and I have done, since attending our level one cert. We truly believe that if one's motives are in the right place, then it shows and you find yourself wanting for a larger space, or more equipment. Such has been the case for my wife and I, who have seen our one-on-one's develop into neighbors wanting to join in, us taking the time to conduct our elements classes, point our "clients" towards the Crossfit Journal, the Crossfit Community, and the like. From this model, "doing Crossfit for love" we have gained the trust of some of San Diego's finest LEO and Fire Department personnel. One is an angel investor, another is our partner, while not doing SWAT. We desperately want to share with others what we've found to be true--Crossfit is life-changing. We are beggars telling another where we found bread. Our affiliate, when it opens, has a business model that allows us to grow one client at a time. There's a well defined community out here in Southern California, and we have experienced nothing but well intentions, words of encouragement, and the like. We stand on tall shoulders here in San Diego County, and believe in synergy. If an affiliate opened across the street from us, we'd be their champion, because if you're making the step up to affiliate, you're doing it for the love of the game. The sustenance will follow.

Keep it open source, brothers and sisters!

Erik and Lauri Preston, soon to be Crossfit San Elijo

15

wrote …

Tony, thanks for your comment. Hope you're well! Good to know that HQ is in the mix.

To Russell's point, I see the growth of CF affiliates as amazing and I am extremely grateful and fortunate to participate and benefit. However, we are not "feeling sorry for ourselves" because of our concern about internal competition. And, with as little time as we have these days to even post on the boards because of the growth of our fantastic affiliate, my points may be moot.

Nonetheless, my comments were a reflection of legitimate concerns that sit in the back of our minds as we succumb to the awesome demand for everything CrossFit. Your rebuttals were valid and frankly, appease my concerns.

I raised the points to be helpful to new affiliates who are pursing their new business venture with blind ambition and passion. My partners and I think of ourselves as warriors against the rest of the fitness world - enlightening the masses of the wonders of CrossFit. Thus, I perceive a competitive battle with an affiliate across the street as a distraction, emotionally and financially, to our overall war.

Perhaps guaranteed territories would reduce some distractions that might limit an otherwise fantastic trainer from building a viable affiliate. That said, CF would likely have not grown as fast and as free as it has with limitations and rules like "guaranteed territories." I'm a "less Gov't" guy by nature. So what is the answer? Maybe this is it right here: open discussion. Maybe unwritten rules of etiquette, i.e., don't sell clients of an affiliate on your new affiliate while you're in theirs.

Finally, (not to be a kiss ass, but I haven't seen or spoken to you in a few months) thanks for your work, man. The quality of this Journal, training, media are directly correlated to the growth of our affiliate. We are grateful.

16

wrote …

First, we need to distinguish between government control and CrossFit HQ oversite. CrossFit being a private entity, it can put forth whatever quality control it wants, and this would still be a free market.

Second, a classic joke: A man asks a woman to sleep with him for a million dollars. She thinks about it, then says okay. He asks, "How about for a nickel?" She responds, "No way! What do you think I am?" "Well, we've already established what you are. Now we're just negotiating the price."

Point being, HQ does exhibit some quality control. Level I Cert requirements, affiliation fee, uniform basic info on websites (I'm assuming that's required with affiliation...maybe not)... Now we just need to negotiate the price.

I don't know the answer. Craig is right: open discussion is a good start. Everyone has raised good points. My own two cents? Territories are ridiculous, stricter training requirements are debatable. The upside: better quality affiliates overall. The downside: fewer. That being said, anybody can do CrossFit, whether it's from the main site WODs or a similar made up workout. Affiliation is just the right to use the brand name. (This probably isn't the best time to begin a discussion of intellectual property rights.)

One last thought: There are several affiliates near me. I go to one more often than the others. But if the class times don't work out, or the distance (which is far), I go to a different one. Or I even often go to--God forbid--a 24-hour globo gym that's minutes away from me. (Hey, there's a rower, squat rack, pull-up bar, and jump ropes. Good enough for me much of the time.)

24-Hour CrossFit anyone?

17

Russell Berger wrote …

"If Joe-Blow with a rich parent or a trust fund decides to open a bigger, nicer affiliate down the street and pays his trainers significantly more, and charges his clients less - your business will suffer especially if you're in your first couple years of operation. I don't care about how good a personal trainer you are - remember, anyone can do CrossFit."

It's really hard for me to offer a rebuttal to this opening line. I don't care how or why your competitor has the resources to open a better gym than you. It doesn't offer anything objective to the argument. It seems to me that you are experiencing "wealth envy", and i don't have the time or energy to argue with you on that subject.
As for the last line in that paragraph: Anyone can do CrossFit, few are good enough trainers to teach it. I can only assume this is what you meant to say, since you do own an affiliate. If you didn't think you had anything to offer anyone you wouldn't be in the business.

As for the Starbucks analogies, they become useless at a certain point. If Starbucks was a loose affiliation of individual businesses all using a revolutionary Coffee-making methodology that could be adapted to suit individual affiliates and individuals, then yeah, analogize away.
The problem is that we don't work that way. I've already covered how it would be impossible to fix prices between places like New york and Mobile. The variations in programming and differences in instruction at every affiliate aren't blasphemous, they ARE CrossFit, and represent what CrossFit has become on the global scale.

"Craig brings up a very good, and perhaps fatal assumption, in Russel's argument. Russel states that if consumers partake in an inferior CrossFit affiliate, they would eventually gravitate to the superior CrossFit affiliate; survival of the fittest. While this is true of a more experienced CrossFitter who was coached well and understands quality, the John Q Public, newbie CrossFitter's experience at the inferior affiliate will sour him to not only that particular CrossFit affiliate but to all CrossFit. He will abandon his endeavor and turn to Palates, Tai-Bo, or dumbbell curls in front of the mirror. And yes, he will tell his friends and write on his blog that Crossfit sucks and that his trainer was only out for the money. This is our grassroots movement going in the opposite direction."

I would call that a misquote Anthony, read my second to last paragraph again. I do think that inferior Affiliates do their part in spreading Crossfit, to the benefit of us all, but I know it doesn't work like that flawlessly. There are a lot of people who don't belong in CF gyms. They could get training from Greg Glassman himself and find away to hurt themselves and cry about it to all of their friends. My gym has a decent attrition rate, and it's not because I'm an asshole (maybe a little) or because I don't need the money. It's because when CrossFit is done right, its hard. I think a lot of you make the assumption that all of our clients are dumb, impressionable, and will only give "alternative fitness" one shot before they run back to their globo gym. While these people do exist, they are the ones you don't want in your facility anyway.

Tony Budding made the most important point of all up there. If the NY times can put its stamp of disapproval on CrossFit, and I still get at least a phone call per day from newcomers, there isn't much a few bad eggs can do. The Demand is there and it won't go away until something better comes along.

18

wrote …

The thing that disappoints me about the responses to my comments above is the sense of 'entrapment' I now feel (not sorrow, Russell). Honestly, I care first and most about our thriving 3+y/o CrossFit affiliate. I also enjoy occassionally contributing to the message boards and blogs, including discussing future CF affiliate policies and scenarios. I have a lot of business experience to share having successfully launched, acquired and sold a couple in my career.

So, when CF solicits opinions on a topical subject why leap (with illogical personal attacks) on those that offer a dissenting opinion? "sounds like Chicken Little;" "sounds like you are experiencing wealth envy(??);" "put blinders on and quit looking at what others are doing (from the affiliate site)." Why the over-sensitivity here? Is there no room for open discourse?

I am not leading a political campaign to franchise the affiliates or mandate guaranteed territories. I'm an anti-gov't guy by nature. Frankly our affiliate (Diablo CrossFit) is quite successful and will continue to be no matter the policies, save for the loss of affiliation, God forbid.

I simply offered up two plausible scenarios that would be distracting financially and emotionally to any affiliate and, that territories and standards might alleviate. And again, please read: I said "distracting" not "drastic damage."

And, to clarify, my point is that by removing distractions perhaps we can grow CF faster and improve it even more. If you disagree or think my points are much ado about nothing, then present your arguments and perhaps we'll learn something. Save the personal attacks for when we're talking face-to-face.

19

wrote …

Craig,
First of all, thanks for the props and I miss running into you. Do you ever get over the hill anymore?

Now, to get back into the debate. The Chicken Little comment wasn't a personal attack. Your concern is hypothetical, like Chicken Little's. No CrossFit affiliate has failed because another well-funded but poor quality affiliate opened up nearby. And, I doubt none ever will, unless the quality of their training was poor to mediocre to begin with. I have yet to see a great CrossFit trainer who loves working with people not be as busy as they want (some choose to keep their training part time because they also love their full time jobs).

Russell's main point, which I happen to agree with, is that competition is good for us. I believe this is true on every level. The best athletes thrive under competition. The best businesses raise their games under competition. I'd even say guys are the best husbands when they know there's a pool of interested men eager to jump if their wife were to become dissatisfied. Complacency never serves us.

I want nothing more than for this CrossFit Journal to be an open forum for the exchange of intelligent debate. Will it ever happen that passionate men (and women) will cross the line in the course of that debate? Of course. But barring these two comments, I think this has, for the most part, been an excellent discourse.

I hear your concerns (I believe we've even had this discussion before). I heard them from several folks when I was the original affiliate director. I have yet to see any validity to them, nor see any affiliate negatively affected by a disastrous scenario. In fact, if you guys are spending any significant time trying to "protect" yourselves from potential competition, I'd suggest that is hindering your growth more than that theoretical competition. I'd further suggest that you convert 100% of that time and energy into training your clients and deepening your relationships with them.

Craig, no matter how good you and your cadre are, you can't reasonably service more than 500 clients. In your town alone, there could be 5-10 thriving affiliates, each servicing several hundred clients. The population is there. The question is, can you develop and maintain those relationships? If anything, the potential for competition should bring an urgency to that effort alone, which is the best thing you can do for your business.

20

Russell Berger wrote …

Craig, I appreciate what you've added to the discussion. This would be a pretty boring thread if everyone here agreed... and frankly I wouldn't have had an article to write if there weren't MANY different takes on this subject. I wasn't attempting to personally attack you, and I hope you can see that. This was just a response to your first implication: that someone could have wealth that they may not have earned "fairly"...There are a lot of people in the world that base their judgments on a disgust for those with greater financial resources, and arguing something so ideological is draining and usually futile one message boards.
I think you were probably playing devil's advocate a bit, but I felt the need to separate it from the meat of your post.
Obviously anything that harms your business is painful, and can effect what you would like to be doing- training clients. I agree with you on this, but I believe that the only plausible solution is to just keep providing excellence in what you do.
Competition is a great thing in the CrossFit class, but for some reason has a dirty connotation between affiliates. I'll just ask you to read Tony's husband analogy again here.. that pretty well summarizes my entire article.

21

wrote …

There seems to be a persistent assumption that the pool of available CrossFitters in any given "territory" is finite. Since CrossFit is hardly mainstream (how many times do you have to explain to people what CrossFit is?), the CrossFit "pie" has to be much bigger than any of us can imagine. Until it there's a CrossFit box in every neighborhood, the market for CrossFit remains ENORMOUS.


I'm having a hard time seeing how any new affiliate that pops up anywhere can be a threat to existing CrossFit boxes. Actually, its a sign that there is more demand for CrossFit in your area than you originally thought. A new CrossFit affiliate is a "strategic partner", not a "competitor." If you coordinate your efforts, a new affiliate can actually help you grow demand for your businesses.


An ecological perspective is what's needed. How can affiliates work together to help each other grow and compete against the GloboGyms in their little corner of the world? For example, you could agree to stagger class times to tap into demand from clients who can't make it to Affiliate A's 5:00pm class, but could make Affiliate B's 5:30pm class. Perhaps the new affiliate can offer the kinds of classes you've been wanting to try, but don't have the space or equipment for. Or maybe you can agree that Affiliate A can focus on Firebreathers and LEOs and Affiliate B can focus on newbies.


Having another affiliate open nearby can have the positive effect of being the "Starbucks across the street from your Starbucks", absorbing excess demand and freeing you to maintain or even improve your relationship with your client base. You want your clients to think of your CrossFit box as "their" CrossFit, much like people think of the Starbucks in their neighborhood as "their" Starbucks. As Tony says, this is primarily a relationship business. Having so much demand that you can't maintain quality relationships with your clients ultimately hurts your business more than any new affiliate could.


I say the more CrossFit affiliates, the better, even if they're right across the street from each other. Ubiquity signals to people that you've got a product with lots of demand that they need to find out about and try. The more CrossFit affiliates there are, the more people's curiousity will be piqued, and the more people will want to see what your box is about. To me, there would be no better proof of the excellence of the CrossFit approach to fitness than two, thriving CrossFit boxes right across the street from each other. Just like Starbucks.

22

Steven Caddy wrote …

There's a subtlety here that might have been missed. While I agree that competition is good and a strong driver of value in the marketplace, it's not the golden idol that free market capitalists hold it to be. Before you all jump me, I'm raising this because the article touches on it and it's a critical distinction: 'What's good for Crossfit is good for your Crossfit affiliate.'


What's being talked about here is an openness and a commitment to excellence that has driven the dominant players in online business and which Greg Glassman has spoken about for some years since proposing that 'excellence is recognizable to everyone' (I forget which CFJ article).


This September Umair Haque described '...a radically different vision for a better kind of business. One where the value that's created is authentic, durable, and meaningful to humans; one where your "unfair advantage" isn't simply just the flipside of my disadvantage' in a post about Google's motivation behind releasing their Chrome browser. It improves the online experience for everyone involved, for free. (That article by the way can be read here: http://discussionleader.hbsp.com/haque/2008/09/where_is_the_chrome_in_your_st.html)


Crossfit carries the potential to improve the fitness of anyone, in their own garage, cheaply ... and yet affiliates thrive! Chris Russell touched on it when he mentioned his local CF community works to make Crossfit better for all their clients by embracing openness and Robb Wolf lives it by giving away the kind of specific nutritional advice usually reserved for paying clients on his blog.


If what's good for Crossfit is helping a nearby, poor-quality affiliate lift their game and train their clients better, that's very likely what's going to be good for you. Just like what's good for Crossfit is the adoption of one-legged bosu-ball-tubo-jujitsu-curls ... if that's what improves fitness.


As a side note: Starbucks stores aren't wholly corporate-owned for quality control but to allow multiple stores to survive a saturated and cannibalized local market longer than independent competitors, franchises or smaller chains could. It's a strategy that allowed them eliminate competition in spite of facing competitors with superior product and service in local markets. Imagine what happens if Starbucks worked to improve coffee for everybody?

23

Brian Sharp wrote …

4 points:

1. It is the nature of established (and lazy) businesses to resent new competition. Competition tends to force companies to reduce what they charge and drives up employee wages (as they have more choice where to work) this can limit profit unless you can justify why your product or service is worth the customer paying a premium for. From what I have read on the CF boards, Andy Petranek has done exactly this, he charges at the top of the market by providing excellent service and has no shortage of clients. In good companies competition improves service and improved service ensures client loyalty and therefore company profit.

2. From the customer's point of view more competition is better, they get a better value service, and a choice of locations. After all, not all affiliates have the same vibe or are after the same type of client or provide the same services. With a personal service comes personality, and people may prefer one over another.

3. The Coke/ Pepsi scenario: Coke had about 95% of the soft drinks market until Pepsi came along, now they are about 55/ 44 in Coke's favour, but despite losing market share (and some people would consider losing 40% of a market a lot), the entire market grew (massively – enormously – gigantically). The competition between the two didn’t reduce either’s profits, it increased the public’s awareness of the entire sector and both have benefited.

4. Businesses of the same type that are geographically co-located tend to do better despite the apparent competition. More people will go there, more money will be spent, the pie gets bigger, so even a small slice is worth more.

24

wrote …

This discussion evolved well. Russell, you were right about my devil's advocate position. I like to air out those nagging concerns in the back of my mind with my peers to help us stay the course - or, perhaps uncover a fatal flaw.

A couple points that really resonated with me in this discussion and, frankly, should be noted by all affiliates for peace of mind:

Tony B: "no matter how good you and your cadre are, you can't reasonably service more than 500 clients. In your town alone, there could be 5-10 thriving affiliates, each servicing several hundred clients. The population is there."

We literally did the numbers the other day and my partners and I rougly estimated that our new facility could handly a maximum 500 total clients (since approximately 35 - 40% of our clients visit our faciiity on any given day). Tony nailed that number. With normal attrition and retention, that'll take 2000 or so prospects to get there, but the bottom line is our population center can support a lot more affiliates without any problems.

Steve Caddy: "If what's good for Crossfit is helping a nearby, poor-quality affiliate lift their game and train their clients better, that's very likely what's going to be good for you."

That's a fantastic philoposphy and quite consistant with our original mission. Call it Karma, I suppose.

Thank you.

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Russell Berger wrote …

Steve Caddy,
Craig is right, that is a pretty important point that I failed to even consider. Helping a lower-quality affiliate improve to the benefit of the entire area. Great way to think about an otherwise poor situation!...

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wrote …

This discussion is fantastic, and I just had to add a comment because it hits close to home. Currently, I'm deployed in Iraq, but I have had several small businesses in the past.

One of my businesses had a license agreement similar to this organization....but it came with a 'protected' area....meaning that they would not license another store within a certain number of miles from an existing store. Being in a highly populated area, we quickly realized that this was hurting our growth rather than helping it.....the radius was reduced, and I even sold off portions of my area to other new owners. It was awesome to have fellow owners near enough to share costs for large events and advertising, and to build the brand.

That type of business had a much narrower customer demographic, though, so it truly was impossible for them to be "across the street" from each other. Crossfit has an almost unlimited number of potential clients/customers/work-out partners out there....especially in larger cities and populated areas. Obviously, though, a city of 15,000 people could not support five or ten affiliates.

Actually, I have a bachelor's degree in business, and like they say, "That degree, along with $4.00, can get you a cup of coffee at Starbucks." I learned very little practical business knowledge while earning my degree, and the main thing I've learned in business is that commen sense must apply. Starbucks didn't close those stores for any reason other than gasoline went to four bucks a gallon and the overall economy tanked. Period. Skipping expensive coffee is one of the very first 'cost-cutting' measures a lot of people take.

Your gym will be successful for all of the reasons listed in the posts above....great training, motivated owners that truly care about their people, etc, but mostly it has to do with how much time and effort you put into your business.

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Chris Sinagoga wrote …

This article is absolutely Dope! I skipped it over when it first came out because I was like 18, but man as an affiliate owner now, I love it.

Seriously, just work harder.

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