CrossFit, LLC price hike - What if?

[grace4nan]

Based on the company’s moves and statements since the new CEO (Faul) I think it’s possible that they will try to raise their prices. This could be the easiest move for them to rake in millions more, instead of spending money to increase the number of affiliates world wide for example.

• Increase the affiliate fee: 14,000 x 200-500 dollars = millions
  
  (A commenter reminded me of grandfathered in fees that are even as low as 500 USD - if they do away with those too...)
• Increase the Open fee: 350,000 x 2-10 dollars = million(s)
• Somehow encourage/force affiliates to have coaches with more credentials: 125,000 current coaches x ??

Affiliate owners, what do you say?

How much more would you be willing to pay for the license without getting too much extra from HQ (they’ve developed the new map, they offer some business guidance and discounts).

This is on top off cutting costs (layoffs, cutting back on the Sport costs). I may have to take back what I’ve said, CF could be profitable. That is if gyms don’t disaffiliate due to this.

 

[jcc19240]

@grace4nan Increasing the Open fee is a quick way for me to not do the Open. Honestly, I pay my $20 and $10 for the Judges course every year but I see very little value for me, individually to do the Open.

So any increase is likely to mean me (and others) not participating without reason - bump it to $30 and throw in an annual t-shirt, maybe.

 

[grace4nan]

@jcc19240 Why for the judgges course?

 

[jcc19240]

@grace4nan Because I like to contribute to my gym's community by volunteering to judge.

 

[caze]

@jcc19240 But you don’t need the judges course to judge, do you?

 

[jcc19240]

@caze If you expect your athlete's scores to count...

 

[jungdanielle29]

@caze Yea you do

 

[caze]

@jungdanielle29 Wow, most gyms I’ve been at are not enforcing that. Obviously they are more careful for people who have any hope of qualifying, but for others, they are definitely validating scores where the judge had not taken the course

 

[yaoshi]

@caze The person validating scores is the only one actually required to take the course.

 

[sharzid]

@grace4nan The Affiliate fee is a fraction of a percent of my gross revenue. "CrossFit near me" brings in 10+ people a month through my doors.

3K USD yearly currently provides an amazing ROI. It's mind bottling that there are owners who do not see the value.

Outside of brand recognition, The professional coach and the Affiliate playbook have also both contributed to an increase in my bottom line.

My September 2023 revenue is 34% MORE then September 2022 while my expenses have remained the same.

 

[hallelujesus2023]

@sharzid Do you own your own building or something? How have your expenses not increased?

 

[sharzid]

@hallelujesus2023 I do not yet own my building. I re-negotiated a favourable multi-year lease following the conclusion of the pandemic by leveraging my uninterrupted lockdown lease payments.

Staff costs have also remained mostly stagnant as I over-staffed in 2022 anticipating the growth in 2023. Staffing will increase.

We also spent significantly less on equipment this year. We refreshed last year and retooled our space to fit 24 athletes and 2 coaches in our 4600 square foot space.

The stagnant lease and decrease in equipment spending counter-balanced inflation, as well as cost of living and merit based raises.

 

[rufus1963]

@sharzid A quick way to spot a bad business owner is someone who thinks the affiliate fee is a lot.

The SEO alone is worth multiples.

 

[grace4nan]

@sharzid Mind bottling answer... to what question exactly?

 

[sharzid]

@grace4nan That people would 'disaffiliate' over an increase in the Affiliate fee. Or even complain about it to begin with.

 

[grace4nan]

@sharzid I see.

How much more affiliate fee would you be willing to pay?

 

[angelsent]

@sharzid Our gym has 40 members and barely made it through our first year. It doesn't make sense for every gym. We don't all have hundreds of members. I live in a town of 12000 people. Not exactly mind-boggling.

 

[grace4nan]

I mean CF, LLC is already profitable, the debate is around whether they need to spend on Sport (Games season), and investors wanting to maximize profits.

And if they can grow and grow sustainably.

 

[thunderstruck]

@grace4nan They’re starting with a soft approach

Gyms which paid more money to HQ will be recognized on the affiliate map.

So if you want to stand out on the map

Send them more money!

 

[zongruger]

@grace4nan CrossFitHQ brought in $82M last year per reports, so one can say CF is already profitable. The question to ask is how much is being banked into the Games? And how bad is it hurting HQ? Glassman said a long time ago the Games were never profitable and even went as far to sell it. One thing we don't know is the breakdown of finances as who gets paid what, how much sponsors pay, and how much HQ dumps into the Games. Maybe its time to let the Games sink or swim on there own? Maybe its time we tell athletes prize money is dropping in big percentages and the Games should not be looked at as a career?

I think increases you're asking for won't go over well for a lot of affiliates, especially those struggling already or on the brink of closing. There was one affiliate over in Africa that had to reach out to Hiller because they were struggling with fees and what not. HQ just left them on read and never responded. If these little affiliates in Africa were suffering because of the high cost I think it's a nail in the coffin so to speak increasing it more, especially for overseas.

I've always said CF coaches should have more training and creds under the belt to coach. But I will say that I wish it was cheaper to attend and get these certifications.