Do you want to start a Crossfit franchise and want to know the fees, agreement, details? If YES, here’s how much it will cost you to buy a Crossfit franchise.
Nothing attracts people to a business than when things are done differently from already established and accepted ways of doing things. This is perhaps what gave CrossFit inc. its outstanding success in the world of fitness and exercise.
With its high intensity mix of cardio, weight lifting and gymnastics, CrossFit is now an established trend that is gradually taking over the world of fitness training. Regardless of the high price tag required to belong to this famed cult of fitness idols, Americans have taken to it with a generous amount of enthusiasm. Because of this, owning a CrossFit gym has become a go-to business opportunity for many entrepreneurs.
In case you have wondered about what it would take to own, run and profit from running a CrossFit gym (or box as it is known in industry parlance) in the United States, here are the facts laid bare.
Interesting Statistics of the Fitness and Wellness Industry
Government statistics indicated strong business growth opportunities for starting your own gym business. The U.S. Department of Labor expects industry growth faster than average when compared to other occupations. U.S. Census Bureau statistics indicate that the 21,283 fitness businesses throughout the U.S. net more than $10.2 billion annually according to a 1997 record.
Statistics has it that there is a steady increase in the number of people that enroll in gyms and the fact that gym facilities is now closer to residential areas make this possible. In order words, with the increase in the number of people that enroll in gyms, comes the increase in the revenue generated by gyms.
Buying a CrossFit Franchise – A Complete Guide
- Details to Note
The following are details an applicant needs to note when intending to acquire or open a CrossFit affiliate or box and use the CrossFit name in making and running the business.
Crossfit inc. generates its revenue mainly from annual affiliate fees of $3,000 and $1,000 seminar fees. Affiliates are free to train and collect a part of the fees if they have fulfilled certain requirements. Affiliates also make their money by charging membership fees every month which is around $200. It should be noted that discounts are given to long-term participants and to the military, police, fire personnel and teachers.
All intending CrossFit inc. applicants are mandated to go through a two-day training program where they are taught the CrossFit philosophy, the nine fundamental CrossFit movements including variation of squats and power lifts, and they are shown how to design the workout of the day (WOD). They are equally taught how to handle and lecture beginners.
- Failure Rate
According to research, there is a 2 percent failure rate when opening a CrossFit gym, a statistics that is remarkably low.
- Affiliate Licensing Fees
Affiliates are required to pay $3,000 annually as affiliation fee and affiliates are also locked in on the fee they paid as at the time they joined the network. Because of the locked in fee, some affiliates still pay $500 a year.
- Barriers to Entry
The barriers to entry into the CrossFit world is regarded as quite low as affiliates are free to open their boxes in garages, industrial settings, loading bays and what have you as long as you can afford it.
Cost of Opening a CrossFit Franchise
To open a CrossFit gym, affiliates have to factor in affiliate fee, equipment cost, rent, utilities, insurance, marketing as well as salary expenses. As such, the applicant needs to budget for the following;
- Equipment – $5,000 minimum
- Maintenance/replacement of equipment – $1,000 per month.
- Rent (depending on location and size) – $7,900 per month
- Salaries (hourly rate) – $20 to $25 for three or four coaches depending on the capacity of your facility.
Considering everything, it is recommended that an intending affiliate have at least $30,000 when intending to start a CrossFit gym business.
- Making Profit
Most CrossFit gym businesses, if well managed get to turn a good profit for the owner. If the gym has a membership of about 150 and each participant pays about $200 (the average fee) per month, the box gets to make about $30,000 in revenue every month. This type of revenue, if attained is enough to offset all expenses including the box owner’s salary, while having some income left over to use in running the daily affairs of the business and paying bills.
This number of patronage may seem to be on the high side and difficult to attain, but with a lot of work and a strong marketing plan, this figure and more is quite reachable.
Certifications Needed to Run a Crossfit Franchise
CrossFit, inc. offers the following certifications to its affiliates;
- Level 1 Certificate Course
- Level 2 Certificate Course
- Certified CrossFit Level 3 Trainer (CF-L3)
- Certified CrossFit Level 4 Coach
Equipment Needed to Run a CrossFit Franchise
These are some of the tools and equipment you need to effectively run your CrossFit box.
- Barbells and bumper plates
- Medicine balls
- A pull-up structure or rig
- Gymnastic rings
- Plyo boxes
- Jump ropes
- Weight bench
- PVC pipes
- Metal change plates
- Rubber flooring to protect your equipment
You should also budget for extra bars and poles, white board and markers (for lecturing), cleaning equipment like mop, broom, trash can, buckets, towels etc; office equipment like chairs, tables, cabinets, telephone, CCTV cameras etc. These expenses maybe considered little but they do add up to a significant amount real quickly.
Equipment is one of the things that would likely cost you a lot of money while opening your box. You can budget between $20,000 and $50,000 depending on your capital, but the budget can equally be quite lower too. If you are low on cash, you could start up with only the necessary equipment pending when you can afford other more expensive ones. You are also allowed to purchase used equipment and you can find these on Craigslist, eBay and at your local auction.
If you choose to buy new equipment, you can patronize large vendors like Rogue and Again Faster etc. You can shop around in order to compare prices so as to get the cheapest bargain. Another option you can consider when equipping your box is to use an equipment financing company like Rigquipment Finance. They offer both loan and lease financing options for those who don’t have cash to buy upfront.
- Staff / Manpower Requirement
A typical CrossFit gym would need
- Head coach (normally the affiliate owner)
- The manager
- Administrative assistant
But the owner of the CrossFit box can take over most of these positions if he is running on a lean budget.
- Insurance Policies Needed
You should expect to spend roughly $1,000 to $2,000 annually on insurance.
Requirements for Owning a CrossFit Box
Here is a list of requirements an intending affiliate has to fulfill before being qualified to open and run a CrossFit gym in the United States.
- Application letter: an applicant intending to own a CrossFit box has to first of all write an application letter to CrossFit inc. making his or her intentions known, explaining why he wants to be an affiliate, his background, skills, experiences etc. It takes between 6 to 8 weeks to get a response from the company.
- CrossFit training certificate: an applicant is required to obtain at least a Level 1 Certificate before considering applying for an affiliation. CrossFit organizes level 1 Certificate courses several times in a year and in several locations. Applicants need to check the CrossFit website to locate a training center nearest to them. CrossFit Level 3 certificate is also acceptable.
- Insurance: affiliates in the United States are required to submit proof of insurance. Though insurance from other companies are acceptable, but CrossFit offers its own insurance which is called CrossFit Risk Retention Group (RRG), which they believe offers a better insurance coverage for affiliates. You can check their website www.crossfitrrg.com for more details and go to the insurance section.
- Website: a website is another basic requirement for becoming an affiliate. You need to have an already standard and functional live website that would enable you to be linked to the CrossFit site. Note however that you are not allowed to register a domain with the CrossFit name until after your affiliate application has been approved. Doing thus is illegal and can get you sued.
A Brief History of CrossFit
- Date of incorporation: 2000
- Date of Affiliation: 2002
- Headquarters: Santa Cruz, California
- Industry: Fitness/Gym
CrossFit inc. is a fitness company or gymnasium that took its name from the pattern of workouts it allows. CrossFit was founded by Greg Glassman who in his teenage years was a gymnast. He participated in routine fitness methods that were available when he was a teen, which was working the body weight, but then he decided to incorporate dumbells, barbells and other paraphernalia into his routine.
With this incorporation, he discovered that he was stronger and faster than gymnasts who worked their bodyweight only. He could out perform his friends in all areas even though one or more persons could outperform him in only one or so areas. This realization got him thinking, and that realization was basically what gave birth to CrossFit in the future.
The CrossFit training program can be referred to as a ‘Jack of all trades and master of none’ approach. It involves working out across board with the aim of achieving specialized abilities and fitness that applies to one particular set of movement. The goal is to train every muscle in the body to achieve general fitness.
CrossFit adherents train to enhance key physical qualities which are; cardiovascular/respiratory, endurance, stamina, strength, flexibility, power, speed, coordination, agility, balance and accuracy. This fitness method was said to have been borrowed from Jim Crawley and Bruce Evans of Dynamax, the people who were behind the now popular medicine balls.
In order to achieve its objective of general body workout, Glassman had to incorporate various movements gotten from other disciplines into his regime like gymnastics, weight lifting, sprinting and other high intensity workouts with great emphasis on specific weights, specific distances, specific movements over specific times.
After putting this workout routine together, Greg finally opened his gym in a garage in 1995, in Santa Cruz, California. Because of his success in his workout routines, he was hired to train the Santa Cruz police department in the same 1995. This assignment shot up his reputation significantly and that of his gym and before long, he started getting overbooked.
This situation became dicey for him because he does not want to turn away any of his private clients. In order to remedy the situation, he started doubling up clients and was very excited when his clients enjoyed the group activity. This procedure not only eased the tension, but he also found out that he was making more money even though he was reducing the hourly rates of each client as an incentive. Not only that, because of the pairing, he was still able to offer enough individual attention to each client to ensure that his trainees followed the fitness routine. This was basically how CrossFit came into existence.
CrossFit was officially established in the year 2000, and its first affiliate was established in Seattle called CrossFit North. It was set up in 2002 by Robb Wolf, a biochemist. It should be noted that CrossFit calls its franchises affiliates because they do not follow the normal procedure of a business franchise.
In 2004, Glassman started giving regular seminars to his followers and participants in the CrossFit routine, and he formalized the affiliation process in that same year. Also in 2004, Glassman incorporated the business and hired his first employee, and CrossFit was then set on its way to becoming a real company.
In 2005, the fitness company was already boasting of 13 affiliates, and by 2012, CrossFit had gained about 3,400 affiliates worldwide.
CrossFit is basically a workout that stimulated the feeling of being in a competition, and since its early days, CrossFit has achieved this goal and has also made it a bedrock of the fitness center. The short-duration, high-intensity workouts of CrossFit also drew law enforcement agents who described it as being akin to real life foot pursuit or fight with a suspect.
Glassman developed most of his workout practices in his garage back home when he was a teenager, but the names given to the exercise routines were thought out much later. It would be noticed that most of the names were female names like Fran, Barbara, Chelsea, Elizabeth and Diane, though he also used names of law enforcement agents and the military who lost their lives in active service. In 2009, he explained that it was easier to say “Fran” than to say “front squat into push press followed by pull-ups”.
In 2007, CrossFit inc. instituted games that take place every summer, and it steadily grew in popularity. The first annual CrossFit Games was held in Aromas, California on a ranch owned by Dave Castro. All the games basically took place at various locations in California except in 2017 when the game was moved to Alliant Energy Center in Madison, Wisconsin. Athletes participating in the game compete in exercise routines that they learnt about hours or a few days before the competition.
Just like CrossFit workouts that is a compendium of exercises, the games consist of varied tests including weightlifting, aerobic and gymnastic movements as well as obstacle courses, ocean swimming, ascending a pegboard, softball throwing and just about anything else the organizers can think up. The goal is to choose the fittest athlete in the competition. The games season is divided into three stages; the opens, the regionals and the games themselves.
When the games started initially, the prize for first place was $500, and it was separated into male and female categories. James Fitzgerald and Jolie Gentry were the very first winners. By 2010, the games got sponsorship from Progenix and the cash prize for first place was increased to $25,000.
In 2011, the games went online and acquired sponsorship from Reebok. It also debuted the open round in that same year. The prize rose to $250,000 because of this and the games started getting TV time from ESPN, even as the games got increasingly more competitive and combatant.
CrossFit took the fitness and games world by storm when it increased the prize money to $1 million, and this singular act drew gymnasts and trainers into the competition in droves; and in 2015, the prize wins for the CrossFit games rose to $2 million.
The CrossFit training method builds whole-body functional fitness by utilizing various calisthenics, free weights, gymnastic rings, kettle bells and pull-up bars. This unique method of training is now being adopted by an ever increasing number of high schools and colleges. Currently, CrossFit has been adopted for different methods and different classes of people such as; for soldiers in severe environments, for the elderly, for children, for combatant athletes, and in the park.
In 2001, Glassman launched the CrossFit website crossfit.com in a bid to spread the word, and this was majorly how CrossFit got to expand from the garage in California into the over 6,775 affiliate gyms in existence today..
As the fastest growing fitness program in the world today, and unlike what is noticed when franchising, a CrossFit affiliate requires minimal startup capital to set up his or box. In order to qualify to open an affiliate gym or a box as it is also called, the person has to pass through a grueling two-day seminar.
If the applicant survives the seminar routine and finishes in record time, he or she was free to open his or her own affiliate or box. A box owner is not limited in the routines he can practice in his gym, but it essentially has to follow the CrossFit rule.
A box owner is further not restricted on the type of gym to open, fees to charge and in training methods, neither is education or any special qualification required except for the CrossFit certificate. As regards quality control or monitoring what goes on in the different boxes, Glassman believes that making the market free would provide its own quality control.
Glassman currently owns 100% of CrossFit inc., and the company makes most of its revenue from seminars. Each intended trainer has to cough out $1,000 as seminar/training fee, and CrossFit certifies hundreds of people trainers almost every weekend. It also collects registration fees for CrossFit games and royalties from Reebok for CrossFit apparels and annual affiliate fees which are currently $3,000 each year.
As of 2013, CrossFit revenue was $100 million and this was made possible by CrossFit’s rampant proliferation, and in all, Glassman protects his brand name fiercely even as he kept his business model lose. In line with this, CrossFit has a team of lawyers in its arsenal who are constantly pursuing trademark-infringement cases. At a point, they had more than 5,000 possible infringements, and it was litigating more than a dozen lawsuits in the United States and several more internationally.
Crossfit is also big on social media marketing as it positioned Russ Greene and Russell Berger to assist in balancing the company’s social media image, which led the company to have a huge followership on Instagram, Facebook and various other platforms. The company currently has 2.1 million followers on Instagram.
Crossfit took a huge blow in 2012 after Greg Glassman’s wife Lauren filed for divorce and equally filed a motion to sell her 50 percent stake in the company to a California-based venture capital firm for $20 million. After a protracted and messy legal tussle, Glassman was finally allowed to buy up the share for $16 million thereby acquiring full ownership of the company.
CrossFit has had its share of criticisms and chief among them is from the punishing CrossFit WOD (workout of the day) that sometimes inflicts severe injuries on people in the course of practicing it. One of the injuries that CrossFit workouts make participants susceptible to is exertional rhabdomyolysis, a fact that Glassman doesn’t dispute. In fact, a number of participants have been known to have fallen prey to that injury and others like it.
In a practical case, a former participant named Makimba Mimms who suffered rhabdomyolysis after performing a CrossFit workout in 2005, sued his trainers and was awarded $300,000 in damages. This was one reason why CrossFit instituted a mandatory insurance policy measure for its affiliates, but it still maintained that coming to terms with the risk of injury was one of the criterions of being a CrossFit participant. To buttress this fact, the logo of CrossFit at one point as was designed by Glassman himself was a puking image which he nicknamed Uncle Puke to show that this was a regular phenomenon when practicing the exercise.
Another criticism came from the iron fist with which Glassman rules over his empire, and the aggression with which he hunts down companies and stores that trade with the CrossFit name, which is the sole reason he invested heavily in litigation lawyers.
Currently, there are over 13,000 CrossFit gyms and boxes in more than 120 countries of the world with over 4 million CrossFit devotees, and the company generates over $4 billion in annual revenue, and CrossFit, inc. makes around $100 million annually.