CrossFit is sweeping the United States with its high-intensity mix of weight training, cardio and gymnastics. Despite the high monthly membership price, at least compared to traditional gyms, Americans are joining CrossFit gyms, known in industry parlance as boxes, by the thousands to get in on the trend. As a result, owning a CrossFit gym has become a popular business opportunity for many entrepreneurs. Before jumping into the fray, it is important to understand the economics of a CrossFit gym. Important topics to research include how a CrossFit gym operates, the gym owner's relationship to the corporate office and the cost of going into business.
CrossFit Gyms Vs. Traditional Gyms
CrossFit gyms are starkly different from traditional gym chains, such as L.A. Fitness and 24 Hour Fitness. In a CrossFit gym, you do not find a pool, steam room, sauna, treadmills, machine equipment or even, in most cases, mirrors on the walls. Instead, members are greeted by barbells with bumper plates that allow them to be dropped from overhead; Olympic weightlifting platforms; climbing ropes attached to high ceilings; gymnastic bars and rings; and rowers. Chalk covers nearly everything, while loud rock or rap music emanates from the speakers. Workouts are conducted in structured classes led by trainers, known as coaches, who are required to attend a CrossFit certification class to train members.
Perhaps the biggest difference between a CrossFit gym and a traditional gym is the price. While traditional gyms frequently offer membership specials for as little as $10 or $20 per month, a typical CrossFit membership tops $150 per month. CrossFit justifies the high price by noting the individual attention members receive from coaches, stating the experience is more akin to personal training than to working out at a traditional gym. Moreover, the membership rolls at traditional gyms are full of nonactive members, those who pay dues every month but rarely or never use the facilities, and these members subsidize the price for those who actually come. CrossFit gyms lack this advantage, since most members attend regularly.
CrossFit gyms are affiliates, not franchises. The corporate office charges $3,000 per year to own a gym bearing the CrossFit name and logo, but there is no revenue share. However, gym owners receive no territorial rights and very little in the way of marketing support from corporate. A competitor is free to open a CrossFit gym a block away, as long as he pays the $3,000.
To receive a CrossFit training certification costs $1,000, and trainers must complete a weekend course. Many gym owners, though not all, elect to cover this cost for the trainers they hire.
Initial and Ongoing Costs
Initial costs of opening a CrossFit gym include the $3,000 affiliate fee, equipment costs, rent, utilities, insurance, marketing, and salary expenses. For a medium-sized gym, a box owner can expect an up-front cost of at least $5,000 for equipment and $1,000 or more per month afterward to maintain and replace equipment. Rent depends largely on location but averages $3,000 to $6,000 per month.
Salaries represent another big ongoing expense for CrossFit gym owners. Most gyms have at least three to four coaches on staff, each of whom work between 15 and 40 hours per week. The market hourly rate for CrossFit coaches, depending on geographic location, is between $20 and $25 per hour. Given these expenses, it is recommended a prospective CrossFit gym owner has at least $30,000 to start his business.
Turning a Profit
Most CrossFit gyms that are well-managed turn a profit within the first year. A membership roll of 150, each paying $150 per month, equals a monthly revenue of $22,500. These numbers, though they require a lot of work and a strong marketing plan, are attainable. This revenue amount is also enough to offset all expenses, including the box owner paying himself a modest salary, and still having a profit left over.