State of the Industry Release Show With Sevan Matossian

It , it's , uh, it's , it's really an honor. Um, I I I, I, in the shower this morning, as I was like prepping my opening monologue, I was thinking, man, you , you're the , you're the guy.

You're the undisputed, most knowledgeable accumulation in a single person and a business for knowledge about small , uh, gyms , uh, worldwide, on , uh, all seven continents in the what , however, 200 countries there are on the planet. And , um, you've been extremely generous with all of your data. You always give it up. You have , uh, many free books out there for gym owners.

Um, there's no one who has your longevity or your success, like , and there's not even a second place. So, man,

Every single person we've had on the show who has used your services, has given us , uh, glowing reports. So thank you and thank you . This , this year I called you and said, Hey, do you wanna do an affiliate video contest? Um, I had no idea how well it was gonna do. It was massively successful.

It was 10 times as successful as the one we did when , when I worked at hq , um, I did steal the idea from , uh, Greg, 'cause we did do it once at hq. Uh, you immediately, you didn't ask any questions. You're like, yeah, I'll give 5,000. For first. I was like, what?

And I said, what he said, watching all those videos had unintended consequences on me. And it was funny because I just watched one, I just did one show, and it had unintended consequences on me. It really we're gonna show five of the videos, two honorable mentions, and the winners today, well , you're on the show, fantastic. They'll, they'll, you sit down and watch all these videos and they'll rock your world.

You'll be like, wow, I'm really in a , uh, I'm really in a special business that's all about just changing , uh, people's lives, by the way. So then I, I called Chris and I asked him for , uh, the money, and he said, yeah. And then I started talking about how we would , um, somehow incorporate two Brain . He goes, Hey, it doesn't matter. He's like, it doesn't matter. This is what I want to do.

It's part of my charter to help businesses. However you guys want to integrate Two Brain , it doesn't matter. I just want to help. I just wanna put content out there to drive the gyms. And it's always that easy to , um, work with you. And , uh, I , I really appreciate it.

It's basically like you drive by and you see a CrossFit gym, and you know, wow, that place is making people better, more confident, kinder , uh, less of a stress on the, the entire, you know, social infrastructure of a community. It's making people nicer . We all know that when you're more capable, you're more likely to help someone with their groceries. You're more likely to be kind to people.

We know that you use less resources at the local hospital. We know you're the person who shovels the snow for your neighbor when you're fit. We know that those people who leave there are in a better mood when they went in. They're truly, they'll never get the credit they deserve every single one of these little CrossFit gyms. But watching these videos, you start going, wow.

It's , it's the , the potency of what they contribute to just the global civilization of human beings on the planet is, is it's unexplainable. It's cre , it's , um, it's wild. We're , we're in a really good business where we can look our kids in the eye and be like, yeah, we're, we're doing the right thing.

But unfortunately, that's the reason that people quit the industry, is they're not making enough money. And they might give another reason. Like, I'm burned out. I I just couldn't get help. My spouse didn't support me. You know, it's too stressful, whatever. But it always comes down to money. And that's why every year you get 10,000 new Fitness Pros and 9,000 leaving.

And that's what we're about stopping, because the individual impact of every single one of these gyms is important. And , uh, I think we're gonna see that probably in the videos today . I'm really thrilled, guys, by the way that you're surprising me with this part of the show. It's awesome,

The honorable mentions that were two honorable mentions we're gonna play today could have easily won first place. It , it is at , at some point it just became a like, Hey, we just have to pick a winner. And , and I wanna thank Brett , um, Brett out of , uh, salty Hive CrossFit. Yep .

Um, uh, Chris pointing up even more cash than the prize money, and we paid him to make , uh, six original videos, or 10, I can't remember. And he did an amazing job, and he went through the videos and helped us pick the winner too . It was a extremely tedious, we bit off more than we, than we , uh, watching 200 videos or 300 videos and trying to categorize them. Which one is the best? Was a , uh, the

Uh, he is much said so on the Joe Rogan Podcast, that the only reason why he ran as a Republican was because that the , the system is rigged. So you can only come up through two of those ladders. Mm-Hmm . And that he wants to be, he wanted to come in through the transformation party.

He is , um, surrounded himself by people who are sharing like the , the means brother and sister , um, uh, RFK, these people , uh, and we , we know JFK was , uh, his, his uncle was an incredible proponent of , uh, fitness and health. He said it was like the singular most important issue in the country. And , and it never got taken care of. It's just slid down , slid down since he was in office.

Um, we know that these people are now talking about stuff that we have all had the honor to hear Greg talk about for 15 years.

And Greg never , um, thought that we would save everyone, or even most people, he just thought, Hey, the best we can do is get these 15,000 gyms up , uh, in , uh, on seven continents, and we can make these little lifeboats and people who want to take the personal responsibility and accountability and surround themselves by people who wanna , uh, eat well and move well , um, can, can , uh, um, have the best life

that they can possibly live. Right? Mm-Hmm . and his hid the corner of the cornerstones of his program, or no, sorry, not Cornerstone. One of the found the foundation of his program was don't eat sugar. Yeah . Move and don't eat sugar. Right, right. Um, so now we have this man who , uh, has taken office in the United States and is going to , uh, deregulate , uh, theoretically.

He says he is gonna deregulate so many things, which could really change the landscape in the whole health industry. Right. Dramatically.

He's saying he, all these rules around peptides or , um, uh, supplements or , um, you know, herbs and spices and all these places that people have been trying to regulate, he's gonna open all of those up and he's gonna put a premium on , um, the , I think the, the tagline is , um, make America Healthy Again.

Wow. And that, that , and , and he brought this guy on stage with him, and this guy has been, this r this , uh, uh, RFK guy has been a kind of a cornerstone of his campaign. As we move forward, have you thought about the implications it's going to have , um, on businesses here in the United States, if nothing else inspire more people to think it's safe to maybe open gyms?

Or have you , have you thought about the, the implications this is gonna have and , and , and then the ripple effect worldwide?

My hope would be twofold that number one, it does result in more gyms because in this information age, you know, we don't need more books. We don't need AI to tell us what to do. We need a coach to make us do it. That's one thing.

And the second thing is that I, I really hope that we determine in our schools that we need to teach science so that people know , uh, they have their own BS filter and they know how to self-advocate, and they have, you know, physical literacy so that they know what'll actually make them h happy and healthy, and so that they're not just chasing the nex ozempic.

We didn't hear a single , I don't know if , if Trudeau said anything, we didn't hear one leader say, not once , um, Hey, you should buy an assault bike or an Echo bike, and you should , um, stop eating sugar. And it would've been a , we never heard that once. No, Hey guys, you're gonna be locked up. Now would be a great time to , uh, work on your health now. It would be a great time to go for a walk .

Nothing we heard. And, and I do, to my core sincerely, I think that would've been the most effective method of , uh, of , um, uh, dosing the, the , the world population with something pos a net positive. Instead, we had an average human being gained 29 pounds in the United States. I mean, that's, that's a lot of weight. Yeah . That , that's 2, 2 15 pound dumbbells, , especially depending on where they started out.

That's

This was the, you know, we, we had two people running for Office of Vivek and RFK this year, who is part of their, you , we saw them doing Pull-ups we saw of Vivek , uh, Ramis Swami , one of the guys who was running to be president actually do Murph this year.

What really is the solution is coaches, people who care enough to dedicate their lives to helping you get rid of that 29 pounds, get off the couch, get off the sugar, who will show up , uh, at your house like Skip Chase did back in the old CrossFit Journal article, and empty out your cupboards into garbage bags and take it outside, and then take you to the grocery store.

Like, that's what we need is, is humans , um, doing those things. And I think, you know, CrossFit has probably inspired more people to become fitness coaches, certainly more people to become gym owners than almost any other movement. And that's, that's what's really important.

And it's res it's our responsibility as current affiliates, as former affiliates, and as future affiliates to keep telling a better story that draws people to fitness , um, starting from wherever they are, and then continues fitness for their entire lifetime. You know, it's, it's a heavy responsibility, but nobody else is gonna do it.

You know, governments both on both sides of the border just missed their best opportunity that they'll have in the next 30 years to do that. It's up to us.

Eat these m and ms and you'll be better. Or, here's your ozempic, you'll be better. We're, we're, we're selling something to people. Hey, I have something for you, but you're gonna have to do everything , push up some broccoli. . Yeah, . Yeah .

And , um, you know, while we do say to people, nobody is coming to save you, the reality is that there are thousands of people coming to save you and most of 'em own gyms .

Do you have a summation that you've thought of after looking at this year's , uh, uh, largest , uh, accumulation of data, statistics , uh, questions? What are your thoughts on the state of the industry?

Um, also, a lot of 'em are actually increasing their client head count . It's not a lot, but they're not losing more clients than they're gaining anymore. And even last year, most gyms were just kind of like holding steady. Now the average gym is gaining about three, three and a half clients a month. Wow . And , um, yeah. Which is really great. Right? They're, they're really having an impact.

And if they stay focused on that, and don't get overly optimistic , um, you know, that , that's great, especially when you consider that a lot of people believe that we're in a resection right now. Like they're, they're curbing their spending habits. Maybe they're not going into debt. Um, it's, it's good that the fitness industry is like actually rising, and that's lifting all boats a little bit.

It's a mistake to believe like, I am good at business because I'm successful in 2024 until you've been through another 2021. You can't say that. But , um, there's lots of reasons to be optimistic, which is awesome. The other big change that really thrilled me this year is that gyms are keeping clients around longer.

So if you, if you wanna measure your impact that you're truly having, it's not how many people come in the door and, and do a trial workout or whatever. It's how many people stay. That's how you measure your impact. And so, at our gym, we said, we're gonna measure our impact in this community in , in four ways. Like, do people stay for at least two years?

And the fourth thing is like, have they had a meaningful life changing experience? Have they, have they kicked , um, you know, metformin or, or whatever another medication? Uh, have they met the person who's gonna become their spouse? Like, so if any one of these four things are true to me, you know, I've achieved my mission with that individual client.

And what we see in the state of the industry this year is that gyms are keeping clients longer. Um, the first year that we did this, they were keeping clients for about eight months. That's not long enough to change their lives. Then the number went up to about 11 months, 13. And now what we finally see is that , um, a lot of gyms are able to keep clients for, you know, 17 months.

Wow. Which is absolutely fantastic. Like, we're, we're getting closer. It's not enough. Um , but like the top gyms in the world are keeping people for just over two years. If you've got somebody working out three times a week, you know, maybe doing a couple of no sugar challenges in your gym, and they're still there in two years, you've changed their life ,

Uh , increased memberships, meaning people are paying a little bit more money for their memberships, which is good for the gym owners with , uh, inflation and , uh, retention. Yep .

You know, the gym owner's gonna have to go get a job selling real estate. What it all comes down to is like, the owner has to make money, but if they've got more members, the members are paying more, and the members are staying around a long time. They've got the building blocks to do that.

So a lot of these things are just, as they get better, they, they, they breed more success on top of themselves.

And the owner of the better, more successful gym becomes bigger and better and more successful, and can open up more gyms. And what we've seen from in our program, you know, is like the top a hundred gyms in Two Brain are the ones who are most likely to open up a second location, third location, or a bigger location, and actually be successful.

And if we really empower those people, they are the ones that are at kind of the spearhead of the industry, and they're the ones that are gonna pull the rest of us along with them .

Are we at a all time low of , uh, of , of , of CrossFit gyms, but let's say boutique gyms? I don't know what the phrase you use in general.

And this is just like what happens with any service, when you raise the price, you, you're going to get a smaller number of clients who are paying more. And hopefully that makes up the difference in revenue. Um, and we have, I, I don't think we've seen that completely shake out yet.

There's a lot of gyms that haven't reached that part of their building cycle where they have to pay like four x what they were paying for affiliate fees last year.

Two of the Starbucks went away, and it went back down to , uh, three, or maybe they lost three and it went to two. And , and Starbucks seems to be doing fine these days. Um, is that, is , is that part of me thinks that like, yeah, dude, we , it shot up to 15,000 gyms, a retraction down to 10,000 seems totally normal, right? Like this launch and then sort of a , a , a resettling, this can't be unique.

Um, the , the , it , well, it's obviously not unique to CrossFit.

I mean, even before the sale , um, CrossFit had lost like 10,000 affiliates over time, you know, and, and you could, you could wonder like, where did they go? And the only reason that I bring that up is when you're looking at these, these stories, these videos of these gyms, we have to remember there were 10,000 more just like that. And they're not, they're not in play anymore.

So, you know, I'm not sure that like the , the changes that are happening are enough to , um, prevent the backsliding. A lot of the growth is happening in Europe, for example, where you still have like, you know, a lot of early adopters to CrossFit, these gyms are opening up and a year later they've got 250, 300 members. You know, that doesn't mean they're necessarily good at business. It just means like they're right.

Doing the right thing at the right time. And I hope that they can sustain it. Um, and I really, really, really hope that we don't sink any further. And I hope that CrossFit goes up to 30,000 affiliates. 'cause I don't think 10,000 is anywhere near like the, the carrying capacity for CrossFit. I'd love to see 30,000 ,

So it is probably, you know, if you see a decrease of a thousand gyms on the affiliate map, you're probably looking at like 50 50 de affiliation and closing, or 60 40 maybe even de affiliation. Interesting. And, you know, yeah .

I will say too, like a lot of these gyms are just flipping, you know, you had Chris Christina on the show, and he said something to me that was a real epiphany a few months ago that like a lot of the OG affiliates , um, have been through two or three owners. So the mm-Hmm . , while you have a 14 year affiliate out there, the owner might actually only be a two year G owner.

And so you , you know, unfortunately, like, hopefully that person is learning the lessons that forced the previous owners to sell.

And , um, so that's kind of what we did. So now we're, I don't know, maybe 70 gyms higher than we were at this point last year. Wow . The real, yeah. Yeah. Thank you. The real growth, though, is in the top performing gym . So if you look at like our top tier, these are the people who are consistently making it a hundred thousand dollars a year, and now they're investing for the future.

Um, a lot of them are tracking toward millionaire status, or they're buying their business, they're building, or they're like opening more locations. That number's gone up dramatically from about 60 to about a hundred gyms. And so , um, the best gyms are growing faster than ever, which I see as a huge benefit because we can copy what they do.

And, and the more gyms that are becoming successful faster, the more we can learn from them and just turn around and teach it to everybody else.

But when we have something like two brainin , you're able to take the aggregate of all that and then distill it down. And I ca I brought these metrics up here because, so if you're a gym owner, you're considering being a gym owner, this is your , uh, bread and butter here, these metrics that , um, Chris and everybody have two brain business laid out.

If you're not keeping your thumb on the pulse of, of these metrics here, then you really have no control over what's happening in your business. Um, especially if you're just like a ballpark type person. Um, so to dig into these numbers will , will give you a clear roadmap for your personal Jim of, Hey, what knobs do I need to start to dial to, to make this sustainable?

Um, the other , uh, question I got for you, Chris, here is , um, in terms of , uh, and Avon , I don't know if you had a, a plan with this, and forgive me if I'm jumping around . No, no, no, no. Please go, go, go. I'm , I'm writing down my questions so I won't forget 'em. Okay. Awesome. In terms of , uh, the demographics as far as like the average age goer of the gym. Yeah .

Um, have you seen anything interesting there?

Because one of the things that I know with talking with a lot of , uh, uh, gym owners, and then something I'm feeling myself is it seems like there's less of these young 20 somethings , um, that are showing up to the gyms and being dedicated, which has had some sort of , um, uh, strain on being able to elevate them to, to potentially part-time coaches or getting new people into the field.

Um, it's a good one, seeing anything around there.

You know, I thought, and this was 2008 when I started my CrossFit gym, I'd, I'd already owned a personal training studio for a few years and been a trainer for years before that, you know , um, I still lived under the assumption that everybody's gonna be just like me. They wanted to come in, do a crazy hard workout, throw up, fall in love, compete at the CrossFit sectional event in, in Toronto.

Like, that's what I thought everybody was gonna be. And what I gradually learned is like, not only are most clients nothing like that, but I'm my own worst client. Like, the people who were the most like me we're probably the worst Yeah . Clients to have. Like, because I was broke , you know, and I wanted to stay in the gym for two hours a day, and like, I did not want to clean up my chalk and all that stuff.

Mm-Hmm.

Like only 20% of your clients really can you draw on for coaching. And the other missing 13% are like too young. So now what that does is it reduces your pool dramatically. Yeah . Um , especially if you don't have the money to pay a coach a lot and you're trying to work out a trade or pay them like under 20 bucks an hour, man , that pool is small.

Because when I, you know, when I first started reopen opened affiliate 20 13, 20 14, it , it seemed like everybody that was there for a while was like, Hey, should I go get my oh one? I really love this. Like, I want to dig in and coach. And like, now it's like I keep continuing to raise the hourly price just to find some people to come in to fill in some part times .

And it's like, you know, just as a joke I've thrown out like, Hey, a hundred dollars per class. And people are like, oh man, I just don't really have the time, but I would love to do it. And you're just like. You know? And so I just , it's just , uh, something that I found interesting.

And I wonder how much that correlates or ties into , uh, the lack of media we've seen particularly around the sport for that younger group.

Um, I wonder if there's any correlation there, because before when you had kind of the road to the games and all these other media pieces that were coming out that told the story of actually making it into the CrossFit games, just not the actual events, but the stories behind the athletes, it really drew a lot of that younger crowd in.

And then once they got into the gym and started doing it for themselves, like you said, they started to fall in love with, Hey, I'm actually really helping people here. I'm making an impact. And they make that leap from , uh, you know , I'm going to regionals baby to , uh, hey, maybe I want to just help my mom air squad a little bit better. At least that was kind of the leap that I had made over time.

Like, they wanna buy, they wanna buy all the catalyst shirts, and they want to , you know, they want to , they wanna do the lingo. They, you know, and they're doing the selfies and all that stuff. It's super duper fun. Um, and I love coaching them, but none of these people are going to be coaches at my gym, you know? Mm-Hmm. .

Um , we got enormously lucky with an immigrant from Brazil who wanted to become a resident resident of Canada. And , uh, we were so lucky to help him meet his goal of becoming a Canadian citizen and, and coaching full-time for us. But, you know, if you look at like, what is the average GM paying per class on page 41, 32 50? I mean, that's up dramatically from last year. Last year was around 22, 23 bucks.

People were paying a coach per class. Um, but that might not be enough, especially if you're a demographic excuse toward over 30 people because it's like . I actually make a lot more than that.

I don't wanna say that people don't see more value 'cause they do see more value if they're paying more, but also , uh, the , the whole needle, everything got pushed forward, wouldn't you say Susa ?

I believe Mike Worthington , the great Mike Worthington gave that to us. So we'll put that in the , um, show notes. If you can get a hard copy. You really do wanna get it. Yeah . I , I think it's , uh, I think it's so fun to hold in your hands.

But one thing that we don't want is we don't want people estimating, because if you say to the average gym owner, like, how long do people stay at your gym? I would immediately think of my longest serving clients. Oh, 13 years. Well, that, that doesn't actually help me make decisions. , we wanna know the real number. You know?

Yeah. So , uh, unfortunately, even for me reading this report is sometimes a little bit uncomfortable because I'm like, wow, my GM is way behind in that metric. A RM needs to come up, but that's what the truth should do, is, is prompt you to fix things.

But the number two thing is like , um, what we wanna do is make this something that Jim owners can use. And so the first version of this was like this a hundred page encyclopedia of numbers, which was cool, I mean, looks great on the back of your toilet , but this year the , the ethos was less but better.

And so what we've done now is, you know, we've got graphics that show you like, are you in the red zone for client headcount? Are you in the middle yellow, or are you green? Are you ahead of the , and so what a , a gym owner can do is find themselves on any of these charts and say, okay, well, I'm a green here. I'm a yellow here, I'm a red here, that red is my first priority. How do I fix that?

So, you know, client head count is the one that Matt has up there. You know, if you've got zero to 95 clients and you are a CrossFit gym big group , um, how do you increase the number of clients? Like that's your top priority. And if you are in the yellow, but you're in the red for a RM or you know, retention, that's your top priority. It's not always get more clients, get more clients, get more clients.

So I , I think like we've made the guide more helpful this year by giving graphics, Workington believes that , um, we are evolving toward hieroglyphics again. And so like the , the simpler we can make things to understand , we are , he's , he's a brilliant guy. I mean,

9% of the people said , um, they were unsure or apathetic about the current status, but hopeful for the return of Glassman. Yeah . Where do you think that , was there a question like this in this year's?

He's, he's in typical Greg form . He is not trying to sell anyone anything. He's not pushing anything. He's just chugging along and making his little, you know , uh, diamond over there , um, the same way he did with CrossFit. Right. No marketing. Just put out the best product and see what happens. Um, are , are you hearing any rumblings anecdotally about what's going on and about the community's response?

And from what I've read about Mefi is it's a further simplification. So you're gaining focus on , uh, fixing metabolic health. And while metabolic health was also always like a cornerstone of what CrossFit did, there's a difference between being one cornerstone and being the sole focus of the program.

And so if , um, this takes CrossFit and, you know, focuses it squarely on fixing the , the metabolic problems that we face as a society, then I'm all in on that.

And the way the health insurance would work is it would , uh, it would , the way it was sold to Greg is, is that it would save you so much money that it would, it would pay for your affiliation that basically health insurance is so expensive that if you got this cohort of healthy people together and you got, got them their own insurance as a group, their premiums would be so low, or their monthly payments would be

so low because of the few , such few resources we use relative to the general population , um, that it would lower , uh, prices for , uh, insurance, health insurance, and then it would basically be a wash on your affiliation. You, you could actually make money and then eventually it would go from owners to trainers.

But there was a problem, I think I do remember that it would take three years to get to that point, and so it would start out higher and the gyms would have to make that leap of face faith to build that , um, that nest egg that would give that , uh, process stability. I , I , that , that's my rough understanding of it from when I worked there.

He was , uh, an amazing storyteller and people were willing to believe it's, it's a much harder proposition if you're a private equity firm , um, in any industry to get people to like believe that if we pay into this thing for three years, that there's going to be a benefit to us in the end, especially when Right. You know, maybe you're struggling to pay the , the landlord's rent increase that starts in January.

Um, Chris , um, going back to the state of the industry, are there any correlates that stood out to you that are outside the control of gym owners that you're like, Hey, if you're gonna set yourself up for success, like , um, uh, gyms that open at 2000 square feet , um, seem to succeed 80% more or gyms that open in epicenters with population densities at a higher level or a lesser level, or if you open a gym like

10 miles away, or it could be even contrary to , uh, you know, conventional , uh, thought if you open a gym within a mile of another gym, you're more likely to be successful. Was there anything that stood out to you that you were like, Ooh , that's a, that's an interesting metric. It's not in anyone's real control, but that's a valuable one.

And then there were actually some other things too in the report that are largely beyond like the affiliates control , um, but they're not beyond the affiliates control to deal with them. So for example, right now, a lot of people are facing rent increases. And as a landlord with some commercial buildings, I understand like a lot of us couldn't increase the rent for the last few years.

And we sustained losses because we were paying mortgages and stuff, and we were locked down, you know, in Canada for like two years. Um, and now we like, we have to recover that, right? And so we're raising rates and a lot of gym owners now are saying, ah , my landlord's raising my rent by a thousand bucks. Okay, you really can't control that. Maybe you can negotiate a little bit.

What you can control is your ability to handle that. So if you are profitable, that a thousand dollars a month raise that stinks, but you know, you can handle it. If you are not profitable or you're barely profitable, that a thousand dollars is gonna put you outta business.

And so it's really incumbent on all of us to run these successful businesses that are resilient, even anti-fragile to these things that we can't control. And , um, you know, I think like that's where two brain has probably been the most successful is when these things come up. Uh , you know, CrossFit's raising affiliation fees, well that stinks, but we got this, the landlord is raising the rent.

Oh , that stinks, but we got this. You know, that's where I'm most proud is , is when our community handles things that way. Unfortunately, like if you don't have a plan to handle that, if you're, if you're mostly volunteering, you know, if you've got 10 shareholders, , you're , you're pretty fragile . And , and any one of those things could kill you. And that's, that's a shame.

Or, you know, we are gonna try to sell the gym is happening through like rent increases and different things like that. Have you been hearing that as well too, as like the number one reason for , uh, gyms closing the doors?

You know, it's, it's like you're overweight, you're diabetic, you're very, very sick. You have no mobility. The first germ that you catch could be the one that kills you. And, you know , your , your gym has to be, like, fit from a business perspective, or you're just as susceptible as some of your sickest clients are.

And any other landlord would've raised the rent three times. Mm-Hmm . Right . I don't have to.

And he's like, that only hurt . Greg's. Like, that only hurts those people. They're like, it's just the way the law , it's set up in California, the way the taxes are set up. Yeah ,

But again, nobody's coming to save you. You gotta figure this stuff out. Yeah .

There's a an example right there where you're only hurting the middle class and the poor, because if Chris's payroll is 1 million , uh, uh, dollars , uh, and $1,000,600, he's not gonna, all he is gonna do is just cut that $600. And , and if he, if he stays over that million dollar mark, he's gonna have to pay an extra 2%. The wisdom is, is to fire an employee .

I don't know how this stuff happens where we incentivize people , uh, for their, or , uh, deincentivize people. We punish people for their success. It's, it's wild. Mm-Hmm.

And so the gym owner has all these extra costs going on. They've got inflation going on, they've got these extra taxes going on. If , if you're still running the same rates that you were five years ago, like you're losing ground. And unfortunately, that could be the thing that kills you.

And all of them say , uh, yes. They wish they would've signed up before they even opened the gym. They, they wish they would've gotten their location and two brain at the same time, hand in hand . So,

So 14.4% of gyms admit to never even returning a phone call from somebody that's interested. So let's just like put this in perspective here, right? This person has said, I've had it, I'm fed up. I need to change my life. What are my options? Okay, I'm gonna call this gym . And that, for most people, is as scary as, you know, being like a 13-year-old boy calling a girl to , to your first high school dance.

Like, it's terrifying. Oh , oh , they didn't answer the phone. I'm gonna leave a message. Uh, an hour passes, no call back, huh? I guess I won't wait around anymore. I'll go to the grocery store. Maybe they'll call before I get back. Have 'em call by the next morning. Have 'em call by the next day and they never call you. What message is that person getting? They're getting the message f off.

We don't want you, you don't fit here. You don't belong. Yeah . It's, it's not just like, oh, well, they must be really busy. It's no , they've turned their back on me. And for a lot of those people, they've had the experience of somebody turning their back on them earlier in their life, and you've just done it to them too. Hmm .

And so when somebody contacts you, it is important that you extend your hand right away and say, welcome. We've got you. Mm-Hmm. . Imagine you're in line at Starbucks, and you know, Matt's got a cool shirt on. It says Phoenix, he told me it was from this cool gym, but my watch is also called Phoenix, spelled with an F , and I tap you on the shoulder. I'm like, oh , man, that's such a cool T-shirt.

And instead of turning to talk to me, you turn the other way. And you obviously don't want to have a conversation. How do I feel? And that's exactly how people feel when they call you a gym and you don't respond. Uh,

You'll let them, if you ate 20 minutes for coffee, you'd be in furious. But if they, if they look at you and acknowledge you three times in that 20 minutes, you're cool as. You're just over there fooling around on your phone, you know, they're busy. You get a little empathy and compassion for 'em . It's crazy how little it takes to settle someone down so little.

But like, the first thing that we do, you know, the good cafes, they'll come out and be like, Hey guys, there's a lot of you. We're gonna do whatever we can. And we're like, yeah, cool. You know, and , um, you know, from there it's all good. Um, but there is another number there that I'd really like to talk about too. And that's like the average wage.

Okay. So I just got a text from somebody who's really kind of a , an idol to me. Let's call him Bill H. And he's like, you know, the industry average for . Is that too obvious? No.

We're not there yet. That needs to come up even higher because this is a profession. Um, that might be a challenge for the owners. If you are having trouble retaining coaches, well, you know, you probably need to raise your rates. It's not a marketing problem because you need to pay these coaches. I don't know about you, Matt, but like, the reason I founded my gym was I wasn't making enough working for somebody else.

And I said, I've got a wife and a brand new baby in a house. I've, I've gotta go start my gym. Like, gym owners are all millionaires. I I have no choice. And , um, you know, I I really think like it's important that you have to be able to pay your staff a good amount of money. And, and that means you have to be more profitable.

So if you were to take tho those two right away, you could say that you could probably increase your revenue by 22% if you just picked up the phone and called faster. Because some of those people that's crazy , probably aren't even coming in or already getting contact.

And as you have to, as the gym owner, assume that every single person that's calling is gonna be your next 10 year member on the other end , other end of that line, right? Because if you knew, and then , uh, this is why length of engagement is important.

Because if I knew that if I picked up the phone, had a great conversation with that person, got 'em in, started helping them out, started helping them achieve their goals, and , uh, making their life better around them, I could now say, Hey, this, and the average for us is like three years and three months.

And so it's like, if , if I could get that person in and we could start to deliver some results for them and get them , uh, integrated under our community, chances are I'm gonna have them for the next three years. Right? And , um, and so I just wanted to point that out because there's nothing more under your control that's even easier than , uh, just picking up the phone and making a call back .

Especially if you could stay in the under an hour or one to three hours. I mean , um, I heard this phrase, I forget where it is, but it's a , money loves speed and wealth loves time.

And the quicker I can get those calls and get my people in for the no sweat and get 'em into a trial class, or get 'em into a startup or whatever it is that I do, the faster I'm gonna start turning , uh, turning those , um, potential clients into dollars for me, which is gonna be really important into being able to pay my staff a livable wage.

Like we made that effort, I made that effort here about a year ago, to bring in a GM and to give him something that he could actually live off of. Pay rent in California, you know, have some groceries. Hell maybe even go out to dinner on a weekend if we get crazy. I don't know, . But in order, in order to do that, you have to have , um, some sort of game plan.

And even if you invest , uh, like we use gym lead machine with a kilo nice .

And even that small investment, like if you look at the percentage that I just said, and you had some sort of software that was able to have some sort of automation to deliver right away for your , uh, people that are coming in, that helps a ton, you know, that they got handled, you know, that they're going down your client journey system, and , um, you're able to, to field those a lot easier.

And if you paid, you know, 300, 400 bucks a month for one of those, but you captured part of that 22% that is just going out the door because you're simply not , uh, contacting them, that's a huge turnaround. And so having that game plan , uh, is really important.

But I think us as an industry too , um, we just have to continue to move towards being professional so we could professionalize the trainer and pay them , uh, livable wages

If I call a gym going back , if I call a gym and I wanna sign up, if you don't call me back within 15 minutes, I may have gotten cold feet and got scared. I may have found somewhere else. I may have already be like, at the donut shop with my friends. I may have already taken off to the bar.

I may be so e I'm guessing that each second you wait, that you don't call them, it actually gets worse and worse and worse. And , uh, it , it , it , these numbers are shocking. It almost makes you think it to some point , um, they wanna fail if you're not calling people back or you don't have a method in , um, and answering your phone. Yeah.

If I was just looking for any Juujitsu instructor, you know, in Scotts Valley or Santa Cruz or whatever, I , I would've called somebody else.

And she said, Chris , that's a $10,000 phone call. You always answer the phone no matter what. Well, we can tell you what that phone call is worth because we know what the lifetime value of a client actually is, and it's, you know, it's pretty significant. So if we go to the LTV section here, Matt,

But , um, that tells you, like the average client in the US is actually more valuable than any other place on earth. They stick around longer and they pay a little bit more. And so if you are a US based gym, and you're not calling this person, you're saying that $1,300 doesn't matter to me, let alone that life doesn't matter enough to me to call back.

So, I mean, if you're busy, you're out with your kids, it's 5:00 PM on a Friday. Okay, maybe you're not gonna call them right away. I get it. It's 8:00 PM you're unwinding, send them a text. Can I call you in the morning? Like, pretend it's somebody that you already know and care about and just treat them like a human.

Because they , you know, there was a time, and , and you know, you're closer to Bill than I am, but there was a time when every Tom, Dick and Harry was buying a barbell and a set of rings. Yeah . And I'm sure that the perspective that Rogue has on the industry is quite unique and very valuable, right? Because if they're all of a sudden selling , uh, lap pull down machines, they know there's been a shift.

Do you, do you talk to him about that so that gyms can maybe accommodate with different kinds of trends with equipment?

I mean, first the flight to visit Bill in Columbus was insightful because I used to walk through the Detroit airport and I'd run into maybe three to five people wearing a CrossFit shirt. Right. And if there was an opportunity, I'd say, hi, this time I ran into three people wearing a rogue shirt.

I think that the, the best scale for somebody who wants to get a pull up is okay, like a pro and row in the rings, but before that, the most obvious scale is a lot pulled down. So we use that type of equipment. The , the rogue stuff is absolutely gorgeous. And it's no surprise that he's selling more stuff to in-home users now than ever before because it's over-engineered.

It's not like the old life fitness thing where you had the three inch pulley

And like, no matter what happens to CrossFit in the future, CrossFit can hold its head up high and say, that is the effect that we've had on the industry. Right. The gyms are amazing. The the people who come to the games are incredible, all that stuff. But the average person in their average house is getting a rig from Rogue. Like , that didn't happen without CrossFit. Mm-Hmm . . Mm-Hmm . . That's, that's amazing.

And yeah, that stuff is just so gorgeous. I wanna own all of it.

And so if you start with, here's what you know how to use, the reason that most commercial gyms have lot pull downs and just lots of machines and no free weights is because a newcomer walking into the gym can stand there for two minutes and know exactly what to do and not feel dumb. Mm-Hmm . , and this has always been a challenge, you know, and this is why we meet with people.

One-on-one before they start with our gym, is so we can explain where's all the equipment? And like, what's that box for? What is that rope? You know , the , the first woman that ever walked into my gym , uh, her name is Tiffany. She, the first thing she sees is this power cage. And I've got changed draped over the end of the barbells. And I , I could say her last name, I still remember this vividly.

She goes, what the is that? Turns around and walks out. I never saw her again. Right? . But if you've got rogue equipment with lap hold downs on it, people are gonna say, okay, I kind of get it. Right . And if they see other people doing things that they think they can do, they'll say, maybe this is for me. You know? So I love it. I I think it's so important.

And I guarantee you, I've, I've never , um, used one of those rogue pulley systems before, but I bet you that that thing is smooth and works really well , uh, relative to the life core , um, traditional ones that you would see inside of a Globo gym.

So I think it's, and I think it's great too, because I wouldn't be surprised if we started seeing those , uh, racks and stuff in more and more of that, that type of setting, which would be great. Great. Which would be great for Rogue.

Um, but I wonder how much of that, if you look at like, the sales versus , uh, individual garage versus , uh, gyms and stuff, you might , um, it's kind of interesting to compare, because as a gym, you couldn't necessarily , like, I couldn't buy one of those because with the class size that I have at ranging from anywhere from eight to 25, it's like, you know, how many of those would I need? And what would the cost

There's always been press about how much Rogue benefited from CrossFit. And Bill, I think is gonna be the first to say that, but the reality is that CrossFit has benefited even more from Rogue and continues to benefit from everything that Rogue does, even just from having this guy in , um, the ecosystem. Um, and yeah, that's it.

And without having that underlying support for the ecosystem of affiliates, there's no way that growth would've been , um, possible because you just wouldn't have had the access for equipment to serve all your members. Right. Like, it just wasn't there before. Um, and so yeah, they've made just a credible, incredible , uh, contribution to the space. Did you

And no matter, you know what, who the owner of CrossFit is, who holds the CrossFit baseball card , like the method will survive. The, the ethos will survive. The community is gonna be alive and strong. And I just felt like a rededicated self of purpose to serving that community and helping , uh, you know, from where we are. Um, and even if CrossFit HQ wants to push to brain to the outside, that's, that's fine.

It doesn't matter. You know?

And you know, eventually, like as we, as we gain focus, we lose scope and that's how science works. But at some point you have to say like, wait, this is a valuable addition. Zone two training might actually help some people, you know , um, putting a , a bar across the, the rig might help people substitute who don't have room for A GHD in their garage, you know?

And , and , um, it's lucky that that bill is the kind of guy that he is because, you know, he can, he can introduce innovation like this that doesn't harm the original movement.

Would you rather have people scale in a band on their pull-up or go use the lapt pull down ? All of us would agree, the lapt pull down would be better for them to strengthen their back and to achieve a strict pull up .

And , um, and with that being said, I think like what you were saying earlier, Chris, like if you're gonna open a gym, you have to be just as intentional as , uh, RO is with their engineering. And if you look at , um, this metric here, I'm gonna swap that out real quick, . And we have like the average attended class at six, you know , 6.3 , uh, people or whatever.

So essentially it's called six pe six people per class. Like if you're, if you're listening to this and you are , um, hoping to open a gym one day or considering to make, to make that move relatively soon, or you're looking at buying a gym, this is where you need to start. Because if you look at your number of people that are coming in, there's a couple of metrics that go unnoticed.

And we talked about it in the school platform, which is like, you could take down your expenses to how much it costs for you to run that particular class. And then you could take the average members that attend that class and you could do the math on the different , say, is this class profitable? Do I need to have all these classes?

Or should I start to , um, shed a few to save on labor and other things like that. Right? The other thing is, is with looking at this size, is you could start to , uh, say, how much equipment do I need? What size building should I start out with? Because it's really easy to have these grand visions of everything.

And one example was like, we had, the first facility we had was way too large from when I had started, and I was so gung ho that I was like, my gym is gonna open at five 30 in the morning. It's not gonna close till 7:30 PM And it turns out that between one and three, nobody works out .

But you know, early on, Greg admonished people that, like you expand when people are doing burpees on the sidewalk, you don't start with something that's gonna drive you into a serious debt hole right in the beginning. And if you look at like the average gym size here, you'll see their , their square footage is not massive.

Um, but they're enormously successful because they, they know that they're gonna have six or seven people in a class. They're gonna charge appropriately, they're gonna staff appropriately. They're not gonna waste money, you know, running a class for two people where they're actually like losing money. Yeah . And they're gonna have a plan.

Now, she doesn't charge any of them , but the , these are, these are, she does nothing but walk around . She does nothing, but, you know what I mean, get in and outta the car. She's at the side of the pool wrapping a towel around a kid, and some mom will come up and there's , it's , it's here every week I hear the garage door open and here come the one to three moms.

Uh , and that's just, and that's starting to Jim . That's what , zero effort. That's just, my wife is not outspoken. She's not , uh, doesn't consider herself a , a trainer, you know? But , um, that , that method of starting that small is possible. You can go to the park and work out yourself and someone will come up to you and be like, what are you doing?

And , um, yeah , I mean , you know, you're not, you're not , you're not gonna be cranking in the a hundred thousand, but it's there. The spark is always there. If you're a practitioner of CrossFit, people are gonna come up to you and be like, yo, what's going on?

I mean, that's the key is like you people think like, I'm gonna jump into this. I'm gonna skip five steps. I'm gonna open up a 10,000 square foot gym. This guy's promising me 30 leads a month. This person's telling me I need to have 300, 400 members. Like the reason that we publish this guide is to shine some light on the actual truth that you can open up with 1200 square feet a box you made yourself.

You can pour pebbles into old basketballs and make your own. Like, that will still work. You can open up a gym that changed people's lives and you can put it on a credit card. You don't need the 90,000. Right. You can do it with your dog running around upstairs. That's fine. Right? , like, it will still work. And, and get yourself stable and then build up from there and , and grow a little bit at a time.

Um, don't try and skip steps . Skip steps. 'cause that's what kills gyms. They , they get into this massive hole where they've got this massive payment, they're willing to sell their souls to get one client. They'll do anything to make a dollar, and they wind up hating the industry and quitting.

And at least for myself, the way that I've answered is it's like, okay, if I didn't want to build something really grand or I didn't have, you know, some, you know, huge, huge vision here, but I just really wanted to have a great business that served my community and did it really well. Like, I would do exactly what I said. I'd probably go to like a 1200, 2000 square foot facility.

I would do semi-private , uh, group training. I would do a full nutrition like wraparound service. I would high charge a really high premium, and I'd have like 50 clients that I'd be making $150,000 a year. And you would, I'd be done with working by like noon because you would serve 'em all in the morning or different things like that.

And so you could make yourself a really great, like, lifestyle business doing just exactly that. But not unless you have some sort of game plan ahead of time. The

This person gets zero, except just some love. Here we go. Wow.

Like, I , I was getting a lot of, I was getting a lot of kickback. Like I , I used to kind of have this in , uh, uh, uh, with, with CrossFit some of the people inside there. Then they recently kind of like pushed me out. And then for a little bit I was, I was , um, I was doing a lot of the stuff with , uh, with Met Fix . And that kind of went, went silent for a little bit.

And it was funny 'cause on both sides people were like, oh, like he's, he's bought in, like he's bought and paid for by Met the other people were like, well, what is he doing? Is he, is he kind of on CrossFits side? And , and finally I was like , dude, I am here to serve the affiliates, the people that are inside those gyms, changing those people's lives.

Most of those gyms you will never hear of most of those people you might never hear of . But it's happening all the time. And anyhow, for whatever reason , um, it just, like, it stuck with me. And even that was like a , that was, you know, a couple weeks ago. And I still feel very , uh, strongly about contributing and giving everything I can to , uh, continue to , um, fight for the cause here. Um ,

I've been coming here now very consistently watching my diet finally, and really starting to find myself again, find my groove again. And honestly, this gym has provided me such an outlet of positivity. It's provided me an outlet of finding myself laughing again and just like having fun with athletics. It's been such a long time. I really feel that that has helped me progress within this CrossFit gym.

I have found friends for life. I've never felt so good about myself, my body , um, my body image. So a lot more than just strength has come out of this. It's, you know, the growth of my mind and understanding that this is my body. God gave me a strong body. It's about time I tap into that and let the world see that I'm proud of it.

I'm not gonna hide behind big baggy clothes because my shoulders might be bigger than yours. It's just part of the game.

Okay, so we got one more honorable mention and then we c an g et into O h, I h eard Honorable mention. Okay. Yeah. ' cause we had the two, uh, when I sent you to kind o f pick through, and then when I was going back through last night, I mean, I just really wanted to go through a ll I know, I know. Crazy. I t, it was impossible for me to pick. I mean, Chris, the s tories it, yeah.

Yeah. I'm just r eally, um, really thankful for everybody who did it. I'm really , uh, happy that you guys all did it. I hope, I hope, I hope that this inspired you to pick up a camera to tell these stories. Um, and we'll still continue to play them on the Seon podcast here. We'll, we'll slowly release 'em on the channel over time . We'll play one here . Even the ones we'll play. Even the yeah , even the ones.

We'll play . So everybody's gonna get a lot of , uh, airtime with these over the course of this year . Okay. Last Honorable mention. Here we go. I'm having Bryson on tonight. You should. Yeah. D team . Geez .

I was also told there that it's after the surgery or even if I don't have the surgery, I'll probably never exercise again.

I'm going to take care of it. Three months into CrossFit, which was six months post surgery , I was doing things that no other person that had open heart surgery ever had done. One of my friend's sister had open heart surgery. I saw her six months after mine and she says, look at you. You're absolutely amazing. She's like, it took me one year before I could start moving around. And I said, are you kidding me?

I'm doing CrossFit. I said, I'm pulling up. I'm lifting, I'm running. Energy is up . I came to the realization that this was gonna be the rest of my life. I was going to be in CrossFit.

Like, half of it was mad and half of it like wasn't. But like, I mean, it's just, it's so familiar at the same time. And their community , um, was definitely , uh, um, you could tell it was a really tight-knit community, which was , uh, which was cool. Um , she's very relatable. Everybody. I knew this was gonna happen. Sev

It has shown me the skills that I've never thought I would do as an obese person. They love my story, they feel inspired when people say that, it makes me feel good. I just don't want nobody to go through what I went through. And I'll have to be that advocate for my family, be that role model that I want for my future kids thanks to fitness and CrossFit. I've been able to do that.

But the truth is, is that we've reached a point where there are a lot of people in Jose's condition and , uh, I I , it's gonna take that group, it's gonna take him to speak up because he's gonna be the most relatable to that cohort. And , uh, you can't put a price tag on how valuable messaging from him is. Mm-Hmm . .

Because it's gonna give people, I mean, you know, most people probably 500 pounds, they've just completely given up hope. Completely.

Now the reality is the best way to get started is to just start. And I, I love telling stories like Jose's

And to see the two ends of the spectrum, to see somebody that looks like that, and then it cuts to a clip of him, you know, handstand walking. I just, I love the messaging in that because most people even fit people that weren't in his situation would've came in and be like, I can't do this. This guy's handstand walking, they're moving the barbell. I've never seen these movements before.

But to take somebody to , uh, how far he's come and to see it go through that, I mean, it, it really shows that there's nothing that , um, can't be achieved with a proper coach, a great community, a great gym , and somebody who's just as consistent as , uh, dedicated as, as Jose was. So, and Jose actually made that video too.

Congratulations guys . Um , congrats.

Uh , years ago, Tyson Oldroyd , when I was in , uh, Scotts Valley to do a podcast, Tyson was like, I don't understand why more gyms don't just do what they see us doing at HQ telling stories. And I was like, well, you know, we gotta tell 'em. So it ,

Um, and for some reason, this d stuff comes easier to some people than other than others. But yeah. Uh, telling , telling the stories is huge. I, I saw one. I sometimes I see stuff and I'm almost like, you know, that doesn't capture my attention at all. But also , um, there's different , um, uh, there's different audiences, right?

So something might not get a lot of views and , and it might show, you know, just some 70-year-old person doing , you know, just doing something. But those might be the clients that you're going for. And even with those a hundred views, you'll get more clients than someone who got 10,000 views. Mm-Hmm. .

And we actually have , um, somebody else , uh, Lisa who , um, I'll talk to her again about it, but she was saying that she'll give some , uh, money out to the winners. Um, she has a ad agency. She'll run some ads for them in their local markets , um, with a few ad dollars that they're willing to donate in , uh, for them if they want to , uh, do so.

So we'll be getting in touch with , uh, the gyms here, making sure that they get their prize money and then also setting them up with her , um, if they wanna do that.

And she has , uh, jumped in with both feet and been working very closely with , uh, Kevin and his team. I mean, she's, she is part of that team. The adaptive games are so easy to work with, but she is a specialist in taking , uh, content and putting money behind it on, you know, on social media , uh, to, to get numbers and results. Uh, so I'll definitely need to put you in touch with her. She'd be great.

She'd be great for someone for you to have at the summit. By the way, last year the summit sold out, and this year before the summit was over, the 2024 summit was over 300 tickets had already been sold to the 2025 summit. The summit , uh, last year was in Chicago. Is it in Chicago again? Yep .

And , uh, so that should speak to you about how much people , uh, they go to this summit in Chicago, the two Brain summit, and they leave so invigorated. Uh, it's a very special , uh, meeting. It's , uh, obviously, you know, as CrossFitters, it's not your traditional summit. It's, it's a , it's a great bonding experience.

Lots of education, a lot of friend building, some great , uh, sincere networking , uh, that occurs there. So , uh, I can't recommend it enough

And it , it's just like , these are the people who have run great affiliates and , uh, because they're just so magnetic themselves. And , um, we just love having them and , and putting them all together. And when you come to the summit, you're gonna meet 50 more just like them .

Um, it is not, it is not , uh, your, your , um, uh, Chris isn't selling you anything there. You're not leaving with like protein powder or 10 box DVD set, or this is a , this is ,

Or , or anything as well. Um, I'd be happy to help assist with that anyway .

They went places I didn't think that they were, that anybody would go. And uh , it was wild.