The Sevan Podcast - #792 - The REAL Cost of Running A CrossFit Affiliate w/ Chris Cooper

Episode Date: February 9, 2023

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I'm really excited, actually. Bam! We're live. Perfect. Bye, Caleb. You're a good human. Bad things happen to good people. Look at that beard he's got coming in. Guys, I am very excited about this show for a bunch of reasons. It's a show that I've been wanting to do for several, several months now.

And I'm like nervously, I'm very nervous about the show because I don't want to mess it up because I think it offers a tremendous amount of value. And the premise for the show, there's a lot of different premises. complaining about how expensive CrossFit gyms were are for people to go to and participate and get the cure for the world's most vexing problem in a real, you know, holistic way, meaning a nutrition support from coaches, support from your peer group, and then obviously the movement piece. And it's, I, I, I, and everything is free on the internet so i was just like frustrated and that's how a lot of us actually here uh probably started um crossfit we probably were just going to the internet and taking stuff for free because that was the model that greg wanted to use even though many uh people with business acumenumen told him not to do it.

Then that being said, I worked at CrossFit Inc. I had something called the CrossFit Podcast. I had Chris Cooper on, and Chris Cooper is the gentleman over there. And I think I had him on twice. I really enjoyed him. I liked him as a human being. And he was an OG affiliate owner who did a lot of good stuff and all the things for the gyms. You know, he even had the program there that helped autistic children and autistic adults.

I mean, the whole gambit, right, from the elite athletes to people that it could actually, people overlook nutrition and movement as a huge benefit to those people's lives. So, and then we have two former, we have two other affiliate owners. Do you still own an affiliate, Chris? Yeah, I actually just got that one back, CrossFit Brain. Okay. And then we have an affiliate owner, CrossFit Livermore, my partner, Matt Souza. I'll tell you a little bit more about him in a second. And then we have uh an affiliate owner crossfit livermore my partner uh matt suza i'll tell you a little bit more about him in a second and then we have uh andrew hiller who i've built a dear friendship with um who is over there it's probably not the best what use of my hand to do that that's perfect i can think of better uses but that was all right i don't know what is going on here how come i'm there over there he's down

there um and andrew hiller is a former affiliate owner uh still a personal trainer and a man who may or may not have even put a bid on a crossfit gym to repurchase it in the last let's say few months maybe congrats he didn't get it um i i used to bring business info on that it was pretty good well it didn't work that time i did there's a website on the uh the value of a crossfit affiliate and it's written by chris i'm sure you use that when you put your bid in okay okay cool um and then and then matt souza who um i built a friendship with, kind of a superficial friendship, just like – let me use a different word. Over the years when I worked at CrossFit, he was just one of the many in the kingdom. You had to say hi. You had to say hi.

But we built a friendship, and then after I was fired, Matt reached out to me, and it's a story. My sister sent me a text, I don't know, six months ago and said, hey, don't ever stop telling that story. It never gets old. And the story is like this. I had Chris on twice on the CrossFit podcast. Matt was watching the CrossFit podcast. He owned a struggling gym. He used the free resources, which there are many from Chris Cooper. resources, which there are many from Chris Cooper. And he was able to get his gym back in the positive cashflow. And to the point where several years later, after I'd been fired, Matt reached out to me and said, Hey, I'd like to support you to start up a podcast again. And he had enough resources to actually offer me one of his employees to work on the podcast for me. And that was his way of paying it forward based on the information he had gotten from the crossfit podcast which we had shared with the public via chris cooper by the way both of those podcasts are still available somewhere i'm sure you could just type in

chris cooper crossfit podcast um and it looks like caleb took one took a potty break already you gotta say you told him to leave. He took it literally. So, and then I want to show you this document here. This is a yearly magazine that comes out to all the people who are members of Two Brain Business. And it says up here at the top. Everybody, man. Everybody? Yeah, we send 15,000 of these out for free.

Wow. Okay. Yeah. This thing is amazing. If you are a gym owner and you don't own this, you want this. It says Two Brain Business. We make gyms profitable. And it's a state of the industry.

It almost seems like this stuff should be kept secret, the stuff that's in here. But I guess Chris isn't keeping it secret because he gave out 15,000 of them. They're very nice, by the way. This is like – this is – I've gone through that. It's cool. Yeah. Very cool.

I like it a lot. We designed that. This is Warkington? 100%. Yeah, this thing is – even the paper choice was uh it's yummy the visuals are great too there's a downloadable pdf too right i think that's where i saw it yep you can get the pdf for free too and so what we did is um i have a list of uh questions for uh the group uh for chris but also at some point during this podcast,

we're actually going to pull up a spreadsheet and we're going to plug in the numbers so that you can see. So in my community, Santa Cruz, California, a family of four that makes less than $120,000 a year is living below the poverty level. And so we'll show you how much money you would need to charge. And there's probably six affiliates in my area. Yeah. And so I'd like to show you what you, um, and so if there's six CrossFit affiliates, you also have to remember there's probably six knockoff gyms. And I say that, obviously I know I'm being kind of mean like that and I know I'm biased. Now you're going to call them out. There's six gyms that are using the methodology that aren't calling themselves CrossFit.

And if you want to fight with me on that and say, Sevan, it's free, no one has to be cross. I'm not going to fight with you. I agree with you. I'm just, I know I'm biased. So I'm just going to start with something really broad. And any of these questions chris if they're just too broad just go ahead and just push back and be like hey dude it's too broad but but um sure uh and by the way so i want to say this is data from 11 000 nearly 11 000 gyms

closer to 11 000 than 10 000 gyms around the world it's pretty crazy and uh and another point is uh 25 of the respondents have been in business for less than four years and 75 of the respondents uh have been in business for less than 10 years so it's a pretty good uh swath of um experience okay and there's the layout that's beautiful okay so you can see the vast majority of the gyms are CrossFit gyms, but we've got some martial arts gyms, some other personal training, strength and condition. Yep. Yeah. I coop is the man. And so another thing that happened, um, no, not you, Hillary. I said, Coop's the man. I know. Okay. Okay. Fine. Okay.

Shots fired early. shots fired early uh we we started this affiliate series um on the show where we bring in an affiliate uh once a week and i knew it was going to happen but just like a couple days ago you have this great guy on uh javier jaime out of texas and i'm not even i'm not even searching and lo and behold he's like by way, we do two brain. And that's the largest gym consulting company in the world that I'm referencing. And that started by Chris Cooper, uh, an affiliate on. Um, so, uh, Chris, I'm going to hit you up here, right here, uh, start off. And I have some of these questions I've asked because I think that they would

make great, uh, clickbait videos in the future. I've never because I think that they would make great clickbait videos in the future. I've never been clicked. Would you open a CrossFit gym in 2023? Yes or no? Oh, OK. Hey, I don't even have that. Yes. Let's go with that. Do you not know what I do for a living? Go ahead. Hiller, ask him that. I'm going to defer. Your Honor, I'm going to give my first question to Andrew Hiller. Chris Cooper, would you open a CrossFit gym in the year 2023? 100%. Or in the near future?

Yeah, there's never been a better time to start. Hey, are you saying – Yeah, thank you. Well, for a few reasons. I mean the – By the way, Don just wiped his his brow sweat off his brow he's like that would be that was starting to form he's like okay well don would be in my top 10 list of reasons to do it now honestly okay uh i i had never met him um before he was on your show seve but in the

last five minutes he said something like crossfit's job crossfit hq's job is just get everybody doing crossfit i was like that's it that's the mission mission. He's right. And so that's one of the reasons. Economically, it's not expensive. I started mine on $16,000 back in the day, and you can still do that. And there is enough of a worldwide brand, let's face it, for $3,000 a year to be able to leverage a brand like that in almost any way that you want, there's really no parallel to that anywhere else in the world. So the best business to open is a gym, and I think the best gyms to open right now are CrossFit gyms. What about the – let me also say this. I don't see it in my notes, but I know I read it in your State of the Union from Two Brain Business.

Oh, here it is. Average cost to open a gym, though, in 2022 is $58,000 page 45. So that's a mean average. So you'd be looking at, you'd be comparing like me and Sue St. Marie with people in like Seattle, right? You've also got two or three really big, like access-based gyms. And those things are 300 grand to a million to open. And so that's going to pull that number up.

The reality is like, you could, you could build yourself some plyo boxes. You could make yourself some wall balls out of the old CrossFit journal with the rice and the expanding foam. And you could start in the park for virtually nothing. Okay. No reason not to do it that way. What's the cheapest gym that you've seen open? Do you have that off the top of your head?

Yeah. I mean, it's, it top of your head? Yeah. I mean, it's, it's $0 really. Yeah. That's, um, it's not as common anymore,

but you used to see it. I mean, we used to get these four by four pressure treated posts and put like plumbing pipe in and make our rigs that way. And, um, you know, if I,

if I look at, at mine, I think like all I had, so my first gym was a personal training studio, but my second gym was a CrossFit gym. I might have had five grand to spend on equipment, and we did it. Like a K-star gym. Yeah. Yeah, there you go.

It looked a lot like that. I used to just go to the track with a – we had a 330-meter track in Berkeley open to the public. It had pull-up bars there, parallel bars. And I would take, I would in the back of my truck, I would just throw my weights and some D balls. And, uh, and I, I was doing, uh, probably 10 people a week on average that I was, I wasn't even trying to just people because I went there so often and worked out myself. They joined, I didn't charge them anything. I never opened a gym, but I probably had 10 regular clients a week. It was pretty crazy. You know, can I give you guys another little piece of

please, please. It's never been easier to open a CrossFit gym. It's never been harder to keep one open. Oh, okay. And explain please. Yeah. So what happens is like, we all, we're all passionate practitioners and a lot of us really just like love the method or whatever. I had opened one gym before I found CrossFit. So you get off and you're like willing to work crazy hard, 16, 17 hours a day for no money. Like you're willing to take a vow of poverty to make this thing work.

But what you find now is that you're coming into a much more crowded market. Like when I opened my first affiliate, it was 08. I'd been a gym owner for a while before that. I was getting all the early adopters who just wanted to try CrossFit. But now you're competing for their eyeballs with Orange Theory, with F45, with all of the other similar ones. And these guys have more business acumen, right? There's nothing out there that's actually helping affiliates open profitably and

accelerate fast enough to stay ahead of the wolves at the door. And when you say business acumen, I want to be defined that basically what you're saying is because of the low barrier of entry with CrossFit, because of this freedom that we love about each person can run their own gym, there's a greater kind of hit or miss but with orange theory and f45 it's like they're all the same right you need these mats you need this number of machines you need this much square uh square feet and this is what you're going to say to people yeah here's the script and so they have this sort of like proven way for you to make um uh twenty eight thousand dollars a year in the first year opening your gym?

Or more, yeah. And the thing is, like, I think Greg's greatest gift, honestly, was he launched 30,000 or 40,000 small businesses, right? Like, fitness was amazing. But the reality is, though, that most CrossFit affiliates – sorry about the phone there. No, this makes you sound professional. That's what I was going to say.

It's not even a real phone. It's not even a real phone it's not even a real phone too corporate yeah i know i was gonna that is a corporate cheesy ring uh chris i know it's my fax machine you know just a moment yeah so um what it does is it attracts first-time entrepreneurs and they are scrappy as hell. They're tough. They have like a very, like a mission to pull them through. But there's always this misconception that like being a great coach is going to make me a great gym owner. And that's what almost killed me. It wasn't like I expanded too fast or anything like that. It was, I thought being a great trainer would make me a good gym owner and they're completely

different jobs. So, um, what generally happens is you get all these first time entrepreneurs opening up CrossFit gyms. And then there's this, this lag where, you know, passion keeps them going. And then slowly there's this dawning realization. They're like, Hey, you know, I've got to answer the phone and I've got to like learn how to run a business. That's what we're here today to talk about. What is the main reason why people open a CrossFit gym? The number one reason. They like doing CrossFit.

They want to buy themselves a job doing that. Isn't that just crazy? People love something so much that they want to turn that into that's not why people go get a job at starbucks you get you don't get a job at starbucks because you love coffee right you get a job at starbucks because it pays decently and because it has health insurance and because you can it's going to give you regular hours and you need to pay rent and support your weed habit i mean right well you gotta pay for the beanies yeah yeah yeah all right guys i see how it is no beanie today for susan okay and so does doesn't that doesn't that why doesn't that

automatically guarantee success it what there's that conventional wisdom that's like hey do what you love and uh and eventually you'll get success. You'll never work a day in your life, I think is the point. Bullshit. Yeah, yeah. Thank you, Hiller. And there's that one, you'll never work a day in your life. My high school guidance counselor literally had that on her wall.

But the sad reality is there's this very real thing called the technician's curse where you open up your coffee shop because you love coffee and you absolutely like ruin your passion because now you're a starving barista, can't even afford a new beanie. And then, you know, you eventually grow to hate it. Like the best way to ruin something you love is to like open a business where you're doing it 16 hours a day. And so what happens is like, you just have to kind of fall in love with the business part of it. And that's tough to do. Um, you know, and I, I know that I'm going to be here talking about spreadsheets and stuff, but I, my goal is get people so fired up about these numbers that like they want to run a mile and crush a beer can on their head and, you know, whatever. Okay. If the, if the number one reason why people open crossfit gyms do we all agree on that hillar and sue the number one reason people open crossfit gyms is because they love crossfit they love the working out yes how many affiliates are there right now 15 000 unknown uh our count says 11 6 okay 6 was there ever anything close to 15 or oh yeah i'm way off on no there were yeah

okay i would bet that 10 000 of them were probably because they love crossfit yeah so is there is there a better reason to open what would be the litmus test to to not only open a gym but to know that you're going to be successful at it what what else should it say on your teacher's wall besides um you'll never work a day in the life if you pursue your dreams uh it should also be that you are going to create um create impact by creating a sustainable platform for your family your staff and the clients in your town. Ah, I like that. The problem is like, you know,

there's 30, 40,000 affiliates that have started less than a half or left. Okay. So it's, it's really, really easy to start, but it's really, really hard to keep.

And that's where that mindset pivot has to happen. Is there anyone else in the market? What, what's the deal with that on like Starbucks? Like I remember, I don't know what year it was but there was a year where starbucks closed like 25 of its uh locations are there any other i don't remember do you remember what year was that like 2011 there

was a time when starbucks like they realized they'd open up too fast are there any other businesses you know where that's happened but it just happened with f45 it just happened with soul cycle The problem with the franchise model- Meaning they shut down a ton of locations. It happened with Curves, right? They shut down like 75% of the locations, right? Okay. That's a throwback there. That's the problem with the franchise model is it's so fragile. Anything goes wrong, it goes wrong for all of them. And we do know, we do have other franchise, um, franchisors and coaches call us. And I, you know, I just met with some and they're like, well, you know, we've got

4,000 franchisees in the States, but half of them are losing money. Thank God they signed a 10 year commitment to this or they'd be gone. Where, uh, I think if, if a lot of affiliates were making more money, they would still be here in 30 years creating an impact and actually changing things. We can go down that road if you want. This is a conversation that I have luckily had with Don Fall and Austin Maliolo a few times. I want to say this.

I don't want to drag you into the gutter, but there's some huge truth to this. Of the 11,000 boxes, what percentage were opened by guys looking at Chase Tale? Honestly, I want to tell you you i guarantee you it's um uh 50 and of those 50 oh dude i'm 100 dude i don't do this that's 32 yeah yeah yeah oh yeah do you have the graph here here's the thing most guys don't even know that most guys aren't even willing to say that i'm telling you uh remind me to tell you something when we're off the air i'll tell you the origin story of crossfit that's never been heard why actually there is a crossfit inc

uh yeah that that's why men are born that's why when we're all sitting in the ether and like you're like a god turns to you said you want to go back to earth the 99 of the reason guys come to earth is for that reason oh thank you caleb for bringing us out of the gutter and this is an important stat here uh uh the clientele breakdown is 50 50 which is just cool to see what's the relevancy of this because i mean i like to see it most chains and franchises right now are targeting women because um their their data set would show that women would spend more. What's really interesting though is the fastest growing market doesn't even call themselves fitness anymore.

They call themselves the after-school industry because they know that you can charge a kid three or four times what you would charge an adult. And the adult will usually pay that, right? Your kids are the exception, Savan. Your jiu-jitsu instructor is wildly undercharged, but in ninja gyms, cheer gyms, etc., they're charging like four times what we would charge an adult in a CrossFit gym. Okay. Wow. What's interesting about that is I think I saw a stat also that only – give me a second here. I think it was like 3% of the revenue. No, that was 3% of the revenue comes from supplements. I, yeah, I'm not sure what pages, but I think it's only 5% of the revenue from CrossFit gyms around the world comes from

CrossFit kids. So you're saying that's a huge missed opportunity for gyms. Yeah. I mean, I, I know exactly what happens. You think, well, that kid is half the size of an adult. I'm going to charge half as much. Like we're charging people by weight or something. And, um, yeah, exactly. So, you know, we definitely undercharged for that when in reality, like that's probably our place of greatest impact. And, uh, if you have a CrossFit kids program, that's super important. So the two reasons you should want to open a crossfit gym are one you love fitness and you love crossfit and then the second reason is because you want to have make an impact on your community with a focus on sustainability for not only your gym

but for your family your lifestyle and you want to build a community where people can feel that yeah i mean if you really want to have a meaningful impact on your community, you have to be around for a couple of generations, right? Like our goal, our mission at Catalyst is to expand the health and lifespan of 7,000 people because that's 10% of our local community. And I think that if we can get 10% eating better and exercising, that's immediately going to impact spouses and kids. So that doubles that number and that trickles out to affect everybody. Yeah. It's this totally untapped, I don't know, maybe marketing slogan or something, but I totally agree with you. So when you say you want to affect 7,000 people, it doesn't even necessarily mean you want to get all 7,000 of them into your gym. No, we only take 150 at a time.

Your gym, that's it? Yeah. 150. Okay. And we'll get into that in a minute. Because there's this thing that I've been just keep thinking about over and over that, wow, paying money to an affiliate is you should feel great about it. You should feel absolutely great because of the ripple effect it has on the entire community. Because every person who does CrossFit is a good influence on someone else's lifestyle that's right yeah yeah we're all just mirrors here hey well it also provides ascension value right so it's like the people who are working out at 24 hour whatever, they have nothing to aspire to unless you place, you know, a higher level.

So forging elite fitness, I, it at least creates the mindset that like, this is easy for me. Now I'm going to go to the next thing. And, and, uh, you know, that's what CrossFit did in our community is there's a lot of knockoff gyms and maybe people start there, but then they come to catalyst later. And not only get fitter, but, um, uh, start more importantly, at least for me, as I get older to, to make sure I'm around people who will inspire me to fiddle with my diet, to eat better, to do things that are just generally better for my body sleep, sleep more. I mean, that's, that's a huge topic in the community in the last couple of years, right? Yeah, big time. Real quickly, Stefan, we kind of touched base, but I just want to make this point here because especially coming out of the affiliate gathering, one of the things where a lot of people were speaking up was like, hey, we need more or less what they were saying is we need more control over the brand of what's happening in our affiliates. So that way there's consistency because they think that by them going to CrossFit Gym A, getting a bad experience is turning more people away.

And I just want to take note with this real quick. That is not what you guys want. If you just think about some major franchises that are here that have a consistent product like McDonald's or like a Starbucks, you know that you drive past the one closest to your house to go to the other one because they're better than the one closer to your house. So if you guys think that kind of franchising the model, which essentially is a separation from a licensee to a franchise is the more control you usher in, that's what switches it over, that that's going to be good for the brand in total. And I just want you to be a little bit more thoughtful about what you're asking for there, because we don't want more control because all these things that Chris is talking about,

about implementing him in with supplements or the kids course, you have the freedom to kind of choose how and why you want to do that. Um, and then how long you want to do that for. If it was a franchise model, you would not have those choices. You would have to go down the path of every single other one. So just want to make that point real quick. You agree with that, Chris? What, what about, what about the gym? I go to a crossfit gym and the first day is just absolutely horrible for me i don't get the attention i need i'm asked to do movements that no one explains to me people are rude to me um you don't think that there should be a protocol where every gym um hey you have to say hi to your clients this has to be the first workout you do

with everyone you don't think there should be some protocol in there that protects all the gyms? Well, it's a slippery slope. If you control that thing, then what else are you going to control? And while there's some argument for that, right now, honestly, CrossFit HQ does not have to do that because guys like me will say, here's what you should do and publish that every day. here's what you should do and publish that every day. And so, um, there's kind of like a mutually beneficial relationship there where they don't need to produce data and numbers and best practices because guys like me are just going to do that. Um, as far as like enforcement, there's no way that's going to happen. You know, uh, Andrew did a great show a couple of weeks ago about trying to enforce the use of the CrossFit term by some products and not others.

Like it's just impossible to even enforce use of hashtags, like let alone enforce policy in gyms, right? Yeah. Andrew's tripping right now that you watch one of his videos. He's like, shoot, I just made Chris dumber. I'm sorry, Chris. Damn it. It wasn't my intention.

Andrew, why did you open your gym? I bought into my intention andrew why did you open your gym i bought into my gym and why did you do that 2014 um because i had this ever like never-ending goal of trying to work with as many people as i could for as reasonable as a price as i figured it would be i had an issue working in studio gyms and a personal trainer charging $100 to $150 an hour while I was making $20 to $30. And I would only see the benefit of them coming in no less than three days a week. And then they'd be $450, $500 a week, $2,000 a month. And I'm like, well, it'd be even better if you could come in four or five days. But then you're paying $800.

And then when I saw crossfit for the first time it was 150 200 bucks a month the more you come the cheaper it is and it was just beautiful i'm like all right keep coming in and then you could also work with 150 people at once like chris just said it was like the golden ticket so let me see if i understand so you were already a trainer but you liked the business model of CrossFit more in terms of how many people you could affect and at what cost? Correct. And at the time it was just, if I wanted to make a living and if I wanted to have people come in more, more, more, more, more, but I never had this sense of good in me to be charging the price point. And it never also made sense for me and the person at the time. And then CrossFit, it kind of made sense from all angles. Just the model. Yes, the model.

Jacob, I, oops, my mouse isn't working. I went to Popeye's Chicken once and got the worst service you can imagine. I went to different Popeye's and got great service. This is the nature of people, not franchises. I go to the places with, honestly, I go to the places with the best-looking people. We all have our preferences. Yeah, I'll go to whatever – if there are attractive people or young, happy people. I mean I have no interest in going ever really to Chick-fil-A, but every time I've been there because the people are so nice, I kind of like,

I'm enamored by it. Do you know that place? Do you guys have that place up there? Chris? We don't have Chick-fil-A. We have Popeye's though. So I do know what that person is talking about. Chick-fil-A is like this hardcore, like, I think they're like a hardcore Christian company, right? Too. Like they got John 16 on the bottom of their cup, even in and out, like you walk in and Pete, the fry guy's like, hey, how you doing? You're like, whoa, this is weird. The thing with Chick-fil-A is they actually choose their values over money. And you could note they do that because they're closed every Sunday. And if you were to take all those franchises and say, how much dollar amount are we missing out just by being open on Sundays?

It's a ton. So they're purposely refusing that profit in exchange for their value. So that's why a lot of people shift to it more so than just the John 316 at the bottom of the cup. They're actually living their values, which is something that is attractive as that company. There's also something like 60,000 applicants each year for that franchise model and less than 1% get to become a franchise. Yeah. I had heard that. Very difficult. Yeah. It's a cool place. It's a tricky place. The kids there always,

uh, it's pretty amazing. Do you, what did you have any, um, talked about values in your program? Chris, does that word,

uh, is that a word you guys use? Yeah. I've been noticing like rich fronings thing in the early days, he started CrossFit and I would, I told him, Hey dude, you shouldn't be wearing your Christian values on your sleeve.

Good thing. He didn't listen to me. And it and it's been uh it's been awesome for him yeah there's a we tell people uh how to get really clear about their values because sometimes it's really even hard to define and then actually publish them and so what that does is it clears the path for them to make other decisions too so like if you're one of your values is inclusion, then you're going to make decisions in advance about like who is welcome in your gym and who is not, you know, and then you can write like a staff playbook or a handbook to guide everything without going totally corporate and being a franchise. And that's the beauty of an affiliate or a licensee model is you don't have to follow the franchisor's values. You can have your own as long as you define them.

Would a value be like, don't date your clients? Or is that a policy? Yeah, yeah. Well, I guess that was a policy actually that we had. And then one trainer who had been with me since 2005, Mike, he's like, yo, I started dating this client. And I'm like, well, that's, you can't either. You have to marry her or like, she can't be our client anymore. And he's like, fine, I'll marry her.

And he did. Wow. Yeah. His point was, he's like, I'm here 14 hours a day. Like when else am I going to meet anybody? It's a great point. Are they still married? They are. Yeah. Eden is the compassionate right brain of two brain business, his wife mean, money doesn't fix every problem, but it sure fixes the money problems.

And a lot of the reasons that these gyms close is not lack of passion. It's money problems. They just can't figure it out. And so unfortunately, you've got this graveyard of like 10,000 to 15,000 former affiliates selling real estate now when imagine the impact they could have had 10 years down the track if they'd stayed open. And that's really, it comes down to underpricing. The reality is like, you don't have to sell personal training. You don't have to sell supplements or anything else. If your prices

are in line with what you need to make a great living, this is what almost killed me. I think Andrew was saying, this is what almost killed him too. Meaning if you're charging $10 for a membership, you should be charging 12. Yeah. I mean, you know, when we were talking earlier, you said there's this thing that CrossFit affiliates are overcharging, they're undercharging dramatically. And like, we can show that we give people tools to show them like how you can make a hundred thousand dollars a year, not revenue, but like income on 150 clients. We also show what the average people are charging and it's like, not that. Yeah. Once again, going back to this state of the union, this two brain state of the union,

by the way, how do people get this? Best way is just go to gym owners, united.com. That's a free public group. There's 7,000 gym gym owners in there and we just give stuff away every single day for free in there like here's another present you know and that's you know go in there ask for the guide and we'll just give it to you um uh one of the stats in there is 72 percent of crossfit gyms are profitable page 41 yeah so that may or may not include them paying themselves though and so this is this is place. Oh, that's scary. That's scary. But again, like, you know, Greg defined fitness, right? He did not define what success in business means.

And so the problem is that some gyms will self-report as like, we are successful because we've been open for a decade, but they're not making any money. They're living off their like wife's teacher salary or whatever. Are they actually successful? And so when we were putting this together, I wanted to know, what do you mean by successful? Because I really think CrossFit HQ could potentially build the most financially rewarding careers in fitness too. If they make it successful. Sorry. I just want to be clear about what you're saying, what we could. careers in fitness too. If they make it successful, sorry.

I just want to be clear about what you're saying, what we could, meaning it's all set up for people to be that successful. You're not suggesting CrossFit HQ do something different. You're just saying that people need to get the right tools. Once they get their L1, they need to get the right business tools and then, and then, and then they can have that success you just mentioned. That's right. Yeah. Yeah. I mean, right now that's the weak link in the CrossFit trifecta is like the method is great.

The training is best in the world. Okay. The licensee model is, we don't know what it is. So like, there's no reason if you look at like, you know, what do personal trainers make on average? It's 26,000 a year. What do gym owners make on average? It's like less than 38,000 a year. But if, if they had the tools to do it successfully, they could make over a hundred thousand dollars per year or more, and they would be in business. They would employ more people who

would take more L1s that impact more lives, et cetera. And they would attract the people who are like attracted to opening the F45, people who understand business too. Just to let you know, one of the stats in here is the average gym revenue a month, CrossFit gym revenue a month is $15,900. nine hundred dollars the people who participate in the two uh brain uh business uh program their average uh monthly revenue is twenty one thousand three hundred dollars yeah and i just say that to so that you know chris knows what he's talking about like so he sees they have it's kind of it's kind of interesting um your success keeps just breeding more success because the more people that join you the more data points you get of what works and what doesn't work. Right. Yeah. It's like, um, we have kind of like generations of clients. So let's say that, you know, Alex is like client number one for me. My job is to make his gym better than mine was. And then out of 10 Alex's, we hire one more mentor.

And then the third generation does better than Alex's's gym did you know and so we're on generation eight right now and um you know we produced 23 millionaires last year that's insane and like these right and like they're all way ahead of my gym now my gym has to catch up to the two brain average but that's wait a second wait a second here this is a crazy step uh you're telling you're telling me not revenue, you're telling me that there's 23 gyms of that nearly 11,000 gyms that are in your program where the people pay taxes on a million dollars? Yeah, they have a net worth. Personal income tax? Yeah, so that's not income, right? That's net worth. So it might be it that's not income right that's net worth so it might be okay they've reinvested that into owning buildings but if they sold everything paid off all

their debt they'd have more than a million dollars cash in their hand wow and what's the fastest someone's done that i think three years two months holy smokes yeah probably taryn debryl of crossfit function are you allowed to say that? Do we have to bleep that out? She doesn't care. She almost made the game. She's good for anything. Sousa, CrossFit Function, Taryn, let's circle back.

Taryn. Yeah. Taryn, Taryn. I'm not good with names. I'll check her. I'll make sure she's okay with that. I should have asked. Too late. Too late, Taryn. You, I'm not good with names. I'll check her. I'll make sure she's okay with that. I should have asked. Too late.

Too late, Taryn. You're screwed. Yeah. Your family member's already asking for you to pay their medical bills. Can we pull up her Instagram? And one thing, too, going back to the discussion earlier about why people normally join gyms, for those of you guys that are listening to this that might be thinking about it, when I sit down with my coaches, the one thing that we have the discussion with is what do you

want to do in life? You can wave a magic wand where there is no obstacles, those obstacles lifted. What would your path look like for you? And a lot of times the default answer is I want to own a gym. Then you do the follow-up. Why? And they normally don't have a good answer for that. They just think that that's the next level of ascension. And truly, you need to really be very clear on the why you're going to open your gym and make sure that that's part of the vision that you're casting for yourself. Because if it's just because you think it's ascending to that, or you want to tell people you own a gym, you will end up being the 50% that don't make it through past that first year, because it takes a little bit more than just thinking you're going to the next level in life. Andrew and Matt, do you guys agree with what Chris says when I ask him what's the number

one reason people open gyms or should open gyms? And the kind of the two, the A and the B are the love of fitness, but also to be wanting to make an impact on other people's lives and to run a sustainable business for you and your family? Do I fit or do I think most people fit? Do you like that? Do you like that answer? Do you like that answer that Cooper gave like that? You have to have both of those. Yes. Yeah, I completely agree. If you're not, I mean, it's such a forward facing business. You're interacting with like what a lot of people call their end user or the customer of your business every single day.

And so you have to really have a love and a passion for doing that and making an impact in the community. Otherwise, it's not going to be the right industry for you. I've got one more. And I think Chris said that people fail often because all they wanted to do, or maybe it was Susan who just said it. Why do you want to open a gym? Because they love fitness.

It's just like the next level up. I think that many people are poor at sales slash don't like to push sales slash I've even fit into this before where I was a car salesman at one point in my life before I did any of the fitness stuff. And I had such a hard time as a car salesman at the point where I left because I felt like such a piece of crap. Then I went into CrossFit and it's like, oh, this is great. All I got to do is push this, which is what I believe in. And I think that it is important. And there's a balancing

between like, I shouldn't have been so I don't want to sell. I don't want to sell. I don't want to sell, but you should want to because you do believe in it. And I think you do have to have that belief as a salesman, because if I were a car salesman and I thought that I was doing good, I think I would have been the best car salesman in the world. But I do think that there is this point where a lot of affiliate owners don't want to sell the same way that I didn't want to because they don't want to have that conception on them. I think it's important to have both. Yes. it's actually coming with help first. So it's not about selling them something. They're coming in with a problem and you are solving that problem for them by offering the help, which is your services. And by reframing that and then what you're backing, then what you're saying, Hiller, is you truly believe in the methodology and what you're selling. You use the product and service

yourself and you know that it's bringing value to your life. It's easy to help find those people with solutions with the service that you offer. Yeah. Hey, that's the value thing. That's pretty amazing. What Andrew just said, his values, he wasn't comfortable selling a red Camaro to an 18 year old kid in the back of his mind, knowing, Hey kid, this is going to cost you $3,000 to fix next year when the brakes and the transmission go out. He didn't like that. I love selling CrossFit. Say that again.

I have a crazy last day story about why I quit, but that's for some other time. Yeah. Save that. Very similar to the monetize that later. We'll monetize that again. I have a crazy last day story about why I quit, but that's for some other time. Yeah. Save that. Monetize that later. We'll monetize that. Right, right,

right, right. Um, uh, but, but I just like it cause that's the value piece, right? Chris.

Now Hiller has no problem telling people like, Hey, I can save your life. And we believe what we're selling. That's right. Yeah. That's why I was the worst treadmill salesperson. I think I've heard you say this before where was that that you've said this probably a couple of times right

sous-saint marie yeah we had this treadmill shop and you know i'd work there and not sell any treadmills and then at six o'clock i'd borrow the door and go into the back parking lot and there'd be an athlete waiting with a barbell and a sled and we'd start training, you know, in hindsight, it's obvious, but yeah. Wow. Okay. Yeah. Go. You were like, Hey, don't buy this. Just go run outside. It'll make you tougher. This was like 2001. So, uh, I didn't know anything about CrossFit at the time, but like we were doing power cleans on broken asphalt and you know i had a homemade sled that i had made by like using a torch on a shopping cart that i found in a snow bank and um you know we were getting people super fit but not on the stuff we were selling in the store were you ever

good at crossfit chris did you get pretty good did you have a sub five minute fran uh sub five yeah yeah that's pretty good yeah i mean i can say that I went to sectionals and regionals, but back then you could just walk on the floor and do it. Right. Yeah. But that's still pretty hardcore. Okay. So you loved it.

You loved it. Yeah. Yeah. And do you have a pretty strict training regimen still to this day? Yeah, but I'm a cyclist now. And that's where I was originally cycling. I got tired of being a skinny weakling and said, what's the opposite of this? Started powerlifting, met guys like Dave Tate, Louie, and then found CrossFit.

And I'm like, oh, I don't have to be injured all the time anymore. Did CrossFit for a decade and then picked up the bike again. So most of my training is cycling now. But I did. Yeah, I'm back in the on-ramp program at my gym after a little hiatus for the summer and fall so you touch dumbbells every week um no no no really uh barbell yeah barbell yeah okay so at least once a week you do you because i know these crossfitters you say they went back to coaching but i mean went back to biking but once you're across for you're always across for you always

end up still just having to pick up some heavy stuff. Yeah. Yeah. There's definitely you. It's the one thing that attracts cyclists or attracts nerds to cycling is like you have so much data and you can clearly see like if you stop lifting weights, your power output goes down. Like there's a graph, you know? Interesting. Okay. Jay Hartle, what's Chris's thoughts on crossfit gyms not having full-time coach other than the owner that's okay i mean you know what greg and dale saran told me years ago uh we were talking about like should you have a partner when you open a crossfit gym is they were trying to create owner operator businesses for people and so in that model like you know the the owner is the primary coach, but I mean, I don't honestly think that that's feasible forever. Eventually you just get tired and you need a vacation. So you need to bring in some help at least. And there are some good numbers

regarding that. Once again, in the state of the industry piece, there was something in there. There's a, I don't, I don't remember exactly the context of it, but there's talk about a 4,000 square foot gym that can make the owner a hundred thousand dollars a year with 150 to 160 members and employ some part-time staff. Now, when you say make a hundred thousand dollars a year, you're talking about like, that's the money you get to take taxes on that you take that home, give portion to the government and the rest you keep. Yeah. And I mean, you, you minimize the taxes taxes you pay which is why we don't call it profit we might call it net owner benefit like my my gym owns my truck and whatever but yeah well that's

and can anyone do that anywhere in the united states of America? Can anyone in the United States open a gym? Yeah. And, you know, when I mean anywhere, I mean like within a – like I put a pin mark somewhere and tell you, okay, Chris, you tell me within 100 miles. Yeah. Where to open a gym where you think that I could actually express my passion for fitness, community, health, sustainability, raise my kids there and have a gym for 15 years. And within five years, I'm making a hundred K a year. Yes. I think you made a super important distinction there though, because people will pick the right town, but the wrong neighborhood a lot, you know, so they'll go into Seattle and they'll be like, Oh, don't go to

Seattle. Don't go to Seattle. Don't go to, don't go to k i know you're in canada don't go there either let's do chicago how about chicago no not chicago not chicago they go to miami okay you can pick seattle chris it's it's your whatever yeah you pick seattle please pick any place right and what'll happen is they'll they'll look at this city and be like wow there's no crossfit within three square miles of this i need to put a CrossFit in there when instead they should think, wait, why isn't there a CrossFit there? And sometimes they're just being really altruistic, like, wow, there's a low income community here that really needs a box. They open the box up and now they're martyring themselves because they can't attract anybody. So my philosophy over the years has evolved to be like, your business should be profitable for the owner. And then you just donate as much as you want of that money

instead of trying to sell something for a very low value and struggling your whole life to survive. But that model that I mentioned, 4,000 square foot, 100K, 150 to 160 members. Yeah. And then I want to ask you this question, and then I want to pull up the spreadsheet, and we'll look at that, what that looks like for a gym owner. What's the number one reason gyms succeed? Or what are the reasons gy Jim, succeed that you like? Yeah, it's not like this is more important than that, but you really have to have all of these. And so the first is like passion.

Like you have to be devoted to service. The second is you have to be skeptical. So I think you have to like have the ability to question what you're being told, enough that you look for proof. That's all. Not cynical, but skeptical. The third is you need to have at least some kind of business knowledge. The majority of gyms that are in Two Brain, these guys don't want to look at spreadsheets either.

But they understand that's what they have to do that enables them to pursue their passion as a career. that enables them to pursue their passion as a career. And then the fourth thing is basically you got to have the resilience to understand that there are always going to be ups and downs. It's not a straight line even with a mentor. Meaning your government leaders could shut down your ability to open your gym.

For two years, yeah. I wish I would say I was joking, that that's a reality an unfortunate one i asked work into how many trudeau jokes we should tell on the show today as many as you want none i don't want okay okay good all right fine fine i know i told myself i suit triggering for me the whole thing i good okay good because I gave myself a pep talk. I said, hey, do not, Chris. I heard my mom's voice say this. Chris is a gentleman of the highest level. He's a good dude. Do not drag him into any of your dumb shit, Sevan. I was on her podcast last week. My mom's? Yeah. And one thing I want to note about the ups and the downs that Chris was talking about,

a little thing that actually I do believe I got from you, but correct me if I'm wrong, was that it was a line that when October comes and it's a down month, you don't stress because you're a pro. And you know that the down months come and the up months are going to come. And year after year as it goes by and you have that experience, you know when the lows are coming and when the highs are coming and being able to maneuver through that with your head on straight is really important because when it starts to go down, it feels like the whole entire end of the world's happening. All of these members just left. There's no one new coming through the door, you know, what's happening here. And, um, and that's the resilience that Chris is talking about. Not, not the black Swan event where the government shuts down your gym for two years, although that is a thing.

But even then, we were fine, honestly. And when you say we, who are you referencing? My gym and most two-brand gyms. I mean, I can get into stats on this, but we were very fortunate to have been collecting data for a few years. And so we work with clients around the world and the first place to shut down was China.

And when we saw that happening in China, we said, well, that's weird. Can we try these things? And then the next place to shut down was Italy. And we looked at our gyms there and said, okay, well, this worked in China. Can you try that? And then as it swept westward, we had a lot of different attempts to keep gyms profitable while they were closed. By the time it hit Eastern U S we already had a working plan. Like we had published a guide, do this step-by-step. So. And you, and you knew what, I guess when China closed, you knew that Xi Jinping and Klaus Schwab would tell Trudeau that he has to

close your gym. So you knew it was coming. Well, it didn't, it didn't really happen with SARS. So we didn't think it was going to i mean nobody would have predicted the magnitude of the effect on the industry but like we were able to at least have a plan that was working well and like um you know i don't think two brain lost a single gym in that time where massive franchises closed yeah like uh we were closed for two years. That is amazing. Yeah.

Thanks. It's incredible. Yeah. It just shows your problem solving skills too, by the way, guys. It's not like they have some magic information. They're just looking at the problem, collecting the data, and then solving their way through that problem. Yeah.

How about the fact also that you belong to a strong community of other people who are like-minded even within the niche right so within this niche of crossfit we know we're pretty strong-minded uh you know group that thinks alike but then even within that if you have this two brain group it's even more dialed in yeah and and honestly there was so much support given um you know it it really helps to be around people who think the way that you do and they're empathetic to your problem and they're willing to chip in and support. I mean, I can't tell you. There is probably a dozen different gyms who said, let me pay double this month and you cover somebody who can't afford it.

Javier Jaime, run a profitable gym. You're welcome. Couldn't have achieved our first year results without. Thanks, Javier. Two Brain. Thanks, Javier. Hey, have achieved our first year results without. Thanks. Two brain. Thanks. Hey, have you ever met that guy?

No, but I'm definitely going to send them tickets to our summit so that I can shake his hand in person. I'm so proud of him. The impact. What a good dude. Yeah. Yeah.

Yeah. His parents are, if his kids are listening, you were lucky kids to have him. As your dad. Okay. So go ahead. Go ahead, Chris.

No, his whole town is lucky because here's a guy who cares enough to invest in making his gym sustainable, right? Like there's generations of health that's going to be created from that. Maybe I think different than other people, but I do think that if I went to an affiliate, I think that my affiliate owner should be making a very good living, meaning they should be able to save money, put a down payment on a house, raise two kids. I don't think it's a – I want my affiliate owner to thrive. Anywhere that I see that is like community, I want them to thrive yeah but anywhere that i see that is like community i want them to thrive so if we could bring up i think we should bring up the spreadsheet and just kind of just let people see like hey this is what it costs to make this is what it costs to run a gym i know it's very difficult in california to run a small business because everyone's trying to get into your pocket

from the government it is nuts oh my goodness nuts. And for people who don't know, I'll give you an example. Like once you go over this certain threshold of a certain number of employees, I don't know if it's from 12 to 13, all of these other set of rules come on to you that are almost insurmountable to go from 12 to 13 employees. You basically have to jump from 12 to like 30 in order to make the difference up. I wish I could give you direct examples. I don't remember them now, but I remember as CrossFit was growing in the early days, I couldn't believe some of the stuff California was making CrossFit Inc do. It was absolutely, I don't know how any business gets big. It's almost like that there's a mob that's trying to make sure that no business grows beyond a certain size unless you're gouging people.

Right. But do we all agree that a baseline should be $100,000 for a gym owner to take home so that they can have a Toyota Sienna, a three bedroom house. You know what I mean? Three bedroom house. We're going to be a little more than that out in California, baby. Cat food for their cat. You know what I mean? Tithings to their Mormon church, whatever. Yeah, we picked that number because if you look at like the index worldwide, the number is really about $75,000. But we want you to have a little bit of money left over to reinvest because there's no pension plan that comes with gym ownership. You need to build your own wealth. Yeah, what does this mean? Dick butter? It depends on depends on where you live. A hundred K is jogging some places. Yeah, of course. That's a mean average, right? So like, um, Vancouver,

a hundred K a year means that you're sharing an apartment with two other people. So you say Marie a hundred K a year means you've probably got a lake house. So that's a mean average, but that, you know, you make a great point that like, you have to base your prices around where you live so that you can make a sustainable income because you live there right yeah so in my town a uh a trailer at the trailer park was six hundred thousand dollars i'm not joking that's badass probably a cool trailer yeah i've seen it leaks when it rains. How's that? Well, it's not as cool.

Okay. So I just want people to see this. Hopefully this will help some affiliate owners, but I'm more interested in helping just the people who participate and go to gyms. They're like, hey, don't be critical. Don't try to nickel and dime, uh, your gym owner. Like don't try to, don't try to take advantage of them. Um, you do not want a poor gym owner because it means that your gym, your community, your coach, they're, they're gone in three years, right? Like you don't want, you don't want a broke financial planner. You don't want a sleepy airline pilot, right? Like you don't want a skinny chef. You want somebody that can actually live the life required to provide you with the life that you want to live. Right, right.

And that's going to be your community, especially those of us who have kids. Like you want a gym you can go to for 10 years. Yeah. Yeah. I'm sure anyone who's ever lost a gym, they were going to a gym for five years and then the gym closes. You don't expect the pain that's going to cause you until it happens. Your whole life changes. The people you hang out with, the people, the guys you did bike rides with every Saturday, everything changes. And usually for the worse, I hate to say it. it i i moved from berkeley to santa cruz and i lost two friends i didn't lose them but i used to go bike riding with them every saturday on these long bike rides and in the hills when i moved i haven't been on a bike in six years an outside bike because my those those people left that's irreplaceable right and um those things will just happen so you don't want your gym clothes

okay so can we pull that up the spreadsheet spreadsheet, and then just start looking at – So are these all the big gears, rent, utilities, licensing meetings, being able to use the CrossFit name, marketing meetings, flyers on windshields, labor is I guess the people who come in, the coaching, but also the people who come in and clean your gym at night. Supplies would be toilet paper and pens and pencils. Equipment would be weights. Pens and pencils. Subscriptions would be software you use to run your business. Yep. What about that sugar water, Wattify,

or the one that your members can fist bump each other on? That's in there too, okay. Yeah. The one that's not there is insurance. Okay. Sorry, sorry matt i forgot to bring that no it's toss it in that's why i have those line items there so we could kind of continue to add to it as it goes i don't i don't want to be insurance you guys use insurance yeah and and what is insurance what is insurance um is what are the most obvious right is your dog bites someone but what are some other what about like a flood or a fire or or you get sick and you can you can't come to work for a

month you probably won't get that type of insurance for a crossfit gym that's um business interruption insurance and because of unfortunately the history of gym turnover um nobody wants to insure that but you could get personal liability which you you need, which is like, I won't hurt you. Oh, okay. So someone claims that you told them to pick up a kettlebell that was too heavy, and they sue you for – and they try to take your house. and they try to take your house. Yeah. Or, you know, they fall off a plyo box and break their wrist. There are a couple of other things there too.

Like I would put merchant fees in there, Matt, because your payment processor is going to take 3% off the top of every dollar that comes in. Oh, that's like if someone uses a Visa or MasterCard. Yep. Yeah, yeah. Even if they use debit, they're going to take a few cents. But yeah, most people would charge 3%.

Chris, how would you make Sevan's podcast profitable? That is a great question. Well, it's funny you said that because I just published a new book called The Simple Six,

which would help like any business, basically. Okay. I'm on it. Inside, does it recommend staying away from controversial topics? So YouTube doesn't crush you. Have you,

have you, have you seen our last six videos we posted have been demonetized. Have you seen that? Son of a bitch. Demonetized. They have all these rules, Chris, that we don't really know the rules.

It's like you're not allowed to say a swear word within the first 30 seconds or you can't have like the word abortion in the title. There's all these like nuances that like the real silly rules. And abortion. So Will Branstad, a great question. So that's why all these gyms that get burned down or flooded or tornadoed, that's why we see the GoFundMe for them. So Will, there's two reasons. The first is that the gym is not profitable. If my gym got flooded, I would just, you know, I did, I had to replace the roof of my gym for 110,000 last year. Like I just did it. If you're profitable again, like money doesn't

solve every problem, but it sure solves the money problems. If I see a gym doing a GoFundMe because they flooded, I know that they were probably on shaky ground to start off with, but you're right. Like no insurance company will give you business interruption insurance for a gym. Uh, look at this, uh, Chris, Brittany, or I pay a couple thousand, sometimes 3K in merchant fees per month. Sure, yeah. Absolutely. Doing well. Wait a sec.

Wow. So that's a racket. So credit cards are a straight racket. I don't know. They also enable you. Like I pay 3% to Stripe every month because we have mostly an online business. And I hate it. That number is big. to stripe every month because we have mostly an online business but the and i hate it i that

number is big but like um the the thing is they're also enabling you to collect money right like there was a day before credit cards when i took cash and checks maybe andrew you too but maybe not this was a long time ago and every month you would be like savon can i have some money alex can i have some money you know and i want to pay to the dick yeah it's it's actually i'd rather give somebody three percent to do that for me oh okay okay yeah so it's not awesome but it's necessary so they do provide some service besides just taking money yeah 100 right like i don't i don't have to worry about andrew's check bouncing they worry about andrew not making his visa payment. It's not my problem.

Because they're invested in it because they want the 3%. Yeah. The reality is in the States, it's legal for you to charge a 3% surcharge to cover your Visa credit card bill payment if somebody uses Visa. And that's just legally become okay in Canada too. But honestly, just like everybody's undercharging in the first place, that's just legally become um okay in canada too but honestly just like everybody's under charging in the first place that's the problem that's the answer uh graciano rubio a former guest on the show uh this comment is my recommendation for gym owners to become a client of two brain not only will your gym make more money, but it will put 20 pounds on your deadlift. Wow.

Wow. That's crazy. I didn't even know that. And you'll press 315 straight. What page is that? What page is that in the – Guaranteed. And, Sevan, just to simplify that merchant fee even more, here's the big difference to what Chris was saying.

When I'm asleep and the clock hits midnight, all my members get charged, right? All that money comes in and it transfers into my account as opposed to if I didn't have that, I'm going to spend potentially the next two weeks hunting down all those members to try to get them to pay me. Question is, is that worth one to 3,000 like the comment said to you? 100% it is because half of those people may not even show back up that month to pay you. And they might come in and show up the next month to pay you. And then now are you going to go and say, hey, you know, Sevan, I know you weren't really here that much in January.

You just paid me midway through February. You still owe me January's payment. And they're like, I'm not paying. And then it's causing all this friction between you and your community and clientele as well. So it is worth it. And Brittany Orr made another comment in there. She said a lot of companies are passing that 3% on to the customer, which is very common. You could see that too.

That's where I wanted to go to. Let me ask you this, Chris. There's this cafe in town that I go to with my mom and my kids, the old California avocado toast and a smoothie we get there, hang out on the patio. And they have the thing pay. Hey, shut it. Hiller. They have the thing pasted on the counter.

Um, uh, they have the thing pasted on the counter taped on the counter. It says pay cash and, um, and save 3%. Yeah. And so,

and so they have it built into their menu to charge the extra money, but they'll give you a 3% discount. What about doing that? I know this is falling into the weeds a bit. What about doing that with your clients? Kind of a pain in the dick as well. Kind of a pain, Chris. Your dick gets in a lot of bad situations.

Susie, I think Chris will probably talk about it, but it's like, then you got to remember who's paying cash and you have to collect it again. It's like, oh, some people are getting charged. And yeah, they're saving, but then they're also not really also paying on time all the time sometimes. Yeah. Yeah. I always think of it. It's all about allocation of my time. So if I'm spending my time chasing down those people, that is time away from anything else I could be doing to continue to

evolve and improve my business. The difference between the avocado toast situation is they're giving you money for the toast and they can give you cash at that moment at the affiliate. It's just a monthly service that you got to, all right, let's go see if that 3% back. Right, right, right, right. Okay. I see what you're saying. So at that point, if you spend 50 hours doing that, collecting those money from people in cash and your times were $20 an hour, you just lost a thousand bucks when you could have got the time back and just given that thousand bucks to a visa. Okay. So I see it. That, that 3% though. I mean, when you have buying power, because you've got economies of scale, like you've got a lot of gyms, you can have people negotiate that down for you. That's

what we do. Like we have a, a service that works for two brain that negotiates this rate down for gyms and like half a percentage is a big deal wow so so just so company a is a credit card um you know swiping service and they normally take three percent from other people but if you're in the big big brain two brain big big brain two brain two big brain community you get i just changed thanks for saying big yeah yeah i just changed the name of your company to fake the two free brain business uh you well are there other things like that too besides the credit card that you that you guys work on yeah yeah and i don't know i don't think you want to go down this track but when i saw what the apn was when it was first rolled out i was like we can do that so much better and we just started looking at just for people who don't know what the apn is it's a group of uh it's

crossfit's way of offering discounts to simplify it to gym owners it's one of the benefits you get as an affiliate fee you can get a case of FIDA for $37.99 instead of $42.99. Yeah. So Dale just named one of these people. Merchant Advocate is another. We'll Pay and Merchant Advocate were both at our summit last year. They'll go in and negotiate with your credit card processor. And even if they can bring it down 0. percent like most of them will do that at no cost to you it really doesn't cost you anything to get this set up and over time that money just compounds and you you know you make a few hundred bucks a month from it and so he gets that so he gets that from you or he gets that from the apn no from us uh i don't know maybe the the APM has it. Oh, so Dale's a two-brain too? No, no, no. He's not. But these are independent companies too. So for example, Wheelpay,

any gym owner could just go to Wheelpay and say, hey, negotiate with Visa for me, and they would do that. We just have a vendor that we lock people into. We introduce people to, and if they want to use them, they can through two-brain. We just make that really, really easy. The difference is I don't have to make money on that right and um that's crossfit does yeah i want to know what's coming soon there's two empty boxes on the apn hey so that guy did you know dale king do you know dale king no i met him one time um he makes this soap yeah okay and i think that this soap might be good like it might be like a lot of soap these days is coming out as like toxic for your testicles okay and i want dale to and he in so i have this soap and i want him to sponsor

the podcast so i can push his non because i'm big my wife is like really cracking down on what soaps we have in the house so if after the show you have any suggestions for me on how I can get Dale's company to sponsor the podcast. If I use the, like if I make a short video of me scrubbing my pubes with this or something. Probably the opposite of that. Shut off the world.

There you go. See, that's why look at Chris already giving me free advice. The opposite of using doc Spartan. If, if you don't sponsor the show, here's what's going to happen. Yes. Oh, I like that. Dale, if you don't sponsor the show here's what's gonna happen yes oh i like that dale if you don't sponsor this show i'm gonna soak my pubes we we went to like bob real quick

right yeah gangsta security for your car might get broken into huh tony buss that's right uh what was interesting is when i was also talking to javier there's so much so many resources uh that two brain gives away for free and uh what was funny is is javier says that barely scratches the surface that once you kind of get into the club all sorts of like resources open up he said the video library is insane for any questions you might have but like that's another one right there so you're part of this group that can sort of, um, leverage your, your group as a posse to get better, better deals. Yeah. So like, as an example, um, some group, some gyms are interested in doing semi-private training. So like Andrew and I, they started

doing some one-on-one and they're like, this is taking up a lot of my time. Let's put some people together. And so we just found an expert out in Long Island. He owns, he is a CrossFit affiliate. We flew him up here. You know, he stayed with me for a day and a half. We shot video, built a course. It cost us a few grand, but we can give that to everybody in Two Brain as like an instructional on how to do this stuff. That's just like the power of scale. I'd be curious, is it hard for you to stay in your lane? Oh yeah. Yeah. I constantly start other businesses and then just like sell them off because

they're just too distracting to brain. It's just way too big and it deserves my full attention, but I'm constantly chasing rabbits. Yeah. I know that you guys, do you own any other businesses, Chris? Like, do you own a coffee shop or anything like that? That's you're just like dumping money into. And it's like, you're like, what am I doing? You know what I mean? Like, this is exactly the opposite of what I preach. Did Robin text you before the show? What? No. So we, I've got the gym obviously. And then I'm constantly starting other companies and selling them off.

But we do own a self storage business because it's just the easiest business on the planet. You know, you talked about this. I was like, I'm going to order a fricking storage unit business next. It's kind of ridiculous. It's there, and you just collect the recurring revenue. That's one of those places I see on the side of the freeway where people just go and put their shit in, and they give them a padlock on a sliding door. And they have a TV show where they go – they have a TV show, right, where when people die, they go open those or something? Storage wars, yeah.

And you can buy – Yeah. like storage wars yeah and you can like buy it on yeah i hate to say this i really hate to admit this but i would be so excited to go through some random dude who died oh my god we have our new series for the podcast that make me a bad person savant and storage wars it's funny to own a weird person yeah it really just shows you like the the fitness business is the hardest business on the planet um when we bought this self-storage business i looked for a group like two brain it really just shows you like the fitness business is the hardest business on the planet. When we bought this self-storage business, I looked for a group like Two Brain, you know, who's, who's a mentor in the self-storage business. And I found this rant group and I'm like, okay, what's working in advertising for self-storage. And three days later, somebody is like,

did you put up a sign? And I'm like, no. So we put up a sign and now we're full. Like that's the business. Oh, it is like that. Yeah, because everyone, there's so many pack rats, right? People, the thought of, sorry, I don't mean to shit on your business, but the thought of having a storage unit outside of my house makes me want to vomit. I don't like the stuff like in one of the drawers in my kitchen. Like I have loose trouble with sleep on it.

I lose sleep at night thinking that why am I keeping like I have eight rolls of tape and like seven of them barely have barely enough tape on them. But but for some reason, I can't throw them away. It's like, dude, just throw those away. But as somebody who's been in your garage a couple of times, like you need some external storage. Oh, OK. Coming from someone who owns a storage business so yeah that's thank you okay uh let's pull up the spreadsheet yeah i can't believe how much time has went by whole show is supposed to be on the spreadsheet instead we're going to get 10 minutes on it

okay so um let's pick a 4 000 square foot gym and uh gym and let's go back to our favorite city of all time. Let's go to Seattle. Okay. A few blocks from Microsoft. Let's say it's an expensive – is Microsoft in Seattle? Who's in Seattle? Amazon. Redmond, Washington.

Russell Wilson. Let's say a few blocks from – let's say it's an expensive area by Microsoft, 4,000 square feet. How much for the rent? So I've got an affiliate here from seattle right in front of me okay oh you're a good dude yep um so their total expenses for the month is 16 000 that's all that's not staff so their staff expense is 27 staff so their staff expense is 27 so their actual rent is going to be around 11 000 a month okay 11 000 i like that yeah and uh and so you're going to see a total at the bottom and then basically what we're going to do is we're going to show you this monthly nut and then we're going to figure out how many members it takes so that you can just keep the doors open but you have to be sleeping in your car in the parking lot and then we'll and then we're going to figure out how many members it takes so that you can just keep the doors open,

but you have to be sleeping in your car in the parking lot, and then we'll kind of talk. Or the price you have to charge. That's right. More importantly than the number of members, yeah. Right, right. Thank you. Right. Those are the two dials, right? Yes. Okay. Utilities.

And utilities is heat, air conditioning, and electricity. And does that include – what about internet? Internet, yeah. Okay. So utilities for a place like that, $1,000 a month? It looks like just under $830. Now, this was December's numbers for them. How do they do that? Internet's $200 a month, isn't it? Maybe not in Seattle. I don't know. Right.

Okay. All right. Don't come to San Diego. I just spent two grand hauling snow away, so I don't know where that fits in the expansion. So at your gym, so much snow was in your parking lot that you had to pay someone $2,000 to clear it out so that you could park at your gym? Miscellaneous. Yeah, miscellaneous yeah miscellaneous that's right yeah like dump trucks come in they load the snow up they take it somewhere else to melt uh licensing is uh uh i think susan i talked about this 250 a month if you want to put where the crossfit banner yeah

uh uh marketing what is marketing uh so if they're buying facebook ads for example that's what most of our guys spend money on is like buying digital ads we don't do a lot of physical stuff um and i think this person probably is just doing that but really um so this guy actually has two gms one's a crossfit affiliate and they mostly do referrals. They don't pay anything for referrals, but they're just very active about asking for referrals. So their marketing budget is going to be pretty low. What does that mean? I don't even know what that means. Referrals. So, uh, I would say like, Hey Savvy, can we go for coffee? How are you doing? Are you making progress? Are you where you want to be? You know, um,

making progress? Are you where you want to be? You know, um, uh, like, Hey, I know Haley's really, really busy with the boys. Um, do you think that she's like happy with her fitness right now? How can I help with that? How would that improve your home life? And then if you're like, no, Haley's way more fit than I am, which is the truth, then I would be like, well, how about your mom? You know? Okay. So, and that's's a marketing expense taking someone out to lunch to do that is that what you're saying yeah but i mean most people just do it at their gym and they you know have a coffee or something so i mean that that marketing is like the most effective but it's also zero cost so now with banners and coffee signs and signage also fit under that marketing expense yeah and really it's up to the affiliate where they put this stuff like um we integrate

with software like quickbooks so if their bookkeeper is putting their coffee expense somewhere else that's fine it all washes out yeah your christmas party is that marketing yeah yeah and then you know maybe you have to double your insurance because of what happens at your christmas party too all. Can I ask this question? And bribe prophylactics. Uh, yes. Rent.

You said it's a 4,000 square foot facility. That seems awfully high. Can we have more of an avatar of what this place looks like? Or is it in the middle of downtown? What's going on here? Yeah. I don't know where it is in Seattle. Um,

okay. But yeah, okay. Yeah. 11,000 for 4,000 square feet in Seattle. Uh, I guess wherever they are, it's going right hey also to give you an idea a two-bedroom house uh with a small garage and a small yard in santa cruz is 4 500 a month to rent and it's a shithole and it's a shithole wow

yeah okay so so it's but but what's crazy is this isn't even like the and i'm i'm i'm in a small like community this isn't even the expensive place like if you go 17 miles north to where apple and where all the millions of people live it's um it's even more expensive yeah and i'll tell you right now those first two line arms were in utilities i pay more than that in livermore in livermore yeah okay and then then down here in Miami, that seems normal for 4,000 or 5,000 square feet. Okay. But thank you, Hiller, for trying to ruin our story. Not trying to ruin it.

I'm just speaking to the comments. Everyone wanted to know, all right? Yeah, how many of those people are renting? There's at least 10 comments. Careful. Out of those 10, one person actually rents and leases a space let me see this uh hillar listen um spieler uh listen to spieler talk about what he paid in denver it was ridiculous and probably i think spieler's in park city he probably plays

a fortune i don't even think he's a crossfit affiliate anymore is he does anyone know i know he purchased a space he did okay i don't think is. I don't think he's affiliated. More recently. Which was interesting. Another subject. I don't think he's an affiliate, and that interim CEO was a member there for like 10 years, which is a whole other – that should be a whole show. Okay, we'll get into that.

Mark, so how much for marketing? I don't have anything there. I have zero. Okay, I think we should put something in there. Bold strategy, Cod. I could – hold on. Give me one second, and I'll look something up, and I have zero. Okay. I think we should put something in there. Bold strategy, God. I could, hold on, give me one second and I'll look something up and I'll give you guys a number. Coming from the guy who sells storage centers. Hey, I don't think a hundred dollars a month.

I mean, at least a hundred bucks a month, right? Yeah. My gym spends $5 a day on Facebook ads. So 150 a month. Okay. So that's, that's two. We dropped that under the advertising that we have down at the bottom, not paid ads. Give me one second.

Let me give you a number. You can keep going. I'll jump back into that. Okay, so labor and coaching. So we actually break that out differently on expenses, but he paid his labor, his coaches, $19,925 in December. nine hundred and twenty five dollars in december and i want to say something that that's another thing that i found interesting in the two brain business state of the industry book that i've talked about several times the average gym um spent 33 percent of gym expenses is on staff yeah and the average coach makes 22 dollars per class the uh 11 000 gyms that were respondents in this survey

so i thought that was interesting that's quite a chunk that's one third of your expense is a pain for help oh that's that's low so most gym i mean a lot of gyms will be higher than 40 percent okay a big chain global gym they would allocate about 20 but the reality is that like it's a kind of a big piece of a very small pie so it's still not enough okay and you need help right you'll burn out oh yeah hillard you need help you need help you need help and this is from a guy who can and i ask killer that because i know he's extremely passionate and crazy high energy and willing to give every ounce of himself to people. And if he's saying you need help, you need help coaching until 9.

PM and waking up at 5. AM. That kind of kicks you in after about 18 months. Yeah. There's definitely a time limit on being the sole operator, but at 19,000, that might be a little high for a monthly. Well, no, that's his whole staff. That's everybody included rolled up into that.

Okay. Except for himself. Yeah. Oh, except for himself. Yeah. Oh, my goodness. Okay. All right.

Fair. Okay. Supplies. That's toilet paper and chalk? Yeah. I don't have anything for that, but you can assume probably about 300 bucks a month usually really that's it for toilet paper that's how much my three boys use yeah and detergent for washing like towels and yeah well yeah we do do have a gold bidet. Maybe that's, yeah. Okay.

Equipment, that's all the stuff? That's your rogue habit? Yeah, yeah. So we usually tell people to budget $250 a month for that. And usually they're not going and buying like one barbell a month. They're usually just saving up and spending three grand on something at the end of the year. God, seems that seems low to me i um let me just push back on that if one assault bike breaks um you're out a thousand bucks yeah and the reality is that if that happens most gyms can't afford it yep and so and so how is 250 uh realistic there can we put in 500 sure yeah put in whatever you want i mean it's your gym my gym okay thank you by the way bill has texted me since the since the start of this okay good i hope he texts me too tell him to text me i always like i he's like one of those people that text me that i

don't open right away because i'm no no text from bill because he sent me a snapchat so him and like rich froning if they text me i like i i keep it closed for a couple days like just kind of like yeah i'm the shit that's why i just dropped his name yeah and uh and katie i keep closed for like four days dear bill and katie yes okay um okay uh subscriptions um those are uh like like quickbooks and like the SugarWattify thing. Yeah, so a lot of people would – professional services in here. So like your bookkeeper, your accountant, your mentor would probably go in subscriptions too because it's a recurring bill. Okay. So you put two-brain business in there.

Yep. Okay. Yep. I was going to say maybe we should increase equipment to 505 just to make bill happy i know he wants to see that number uh padded yeah yeah there you go you just improved his pnl well you got to remember too we're just talking about we're not talking about the the initial startup cost for all the equipment that you're buying right we're saying that you already have all the equipment what's it going to take to switch out a monitor, fix a chain on an assault bike, maybe buy two new wall balls or something like that?

So collectively, that gives us $6,000 a year for that. Yeah. So we have an eBay alert for Concept2. So if somebody in town is selling their rower, I want to buy it. So I want to have money in the pool for that. Yes, exactly. Is that a good place to look where should people look um to be looking for equipment rogue.com i've scattered all over the place and this isn't i'm not i'm not being paid by bill for an advertisement of the podcast but i wish we were that that was my wink there too but we could be no but i've searched amazon other places and all all that stuff trying to find a better price than rogue offers because there's shipping and tax including that. And after 10 years, I still have not.

So not only that, but the quality of the equipment will last for freaking forever. We make the joke that if a nuclear bomb went off because I'm right next to the Lawrence Livermore lab. But if that place got attacked, the only thing that would be standing at Livermore would be my rogue rig against that cement wall it's indestructible uh good good point um uh the kemski clinic uh dr kapinski uh i would recommend leaving any area that costs 11k a month for commercial leasing for a 4k square foot building members would have to pay 400 a month yeah that's what we're going to get to but that here's the thing then you wouldn't have gyms in any of the major metropolises i mean you would never have a gym on manhattan one of the most densely populated places uh in the united states you would never have a gym in high profile spot in austin you just won't have gyms in good in places

where where where you need gyms you wouldn't have a single gym in the city of san francisco right i could only imagine what it costs in San Francisco or a place. If you want to open, there's a building that they just built, Apple built. It's like their spaceship building. It's massive. It's probably as big as the Pentagon. Dude, homes there are like $10,000 a square foot. I'm not joking.

Like a thousand square foot home there could be fucking $8 million. Yeah, it would blow you guys away. Yeah, so there has to be a McDonald's there, a CrossFit gym, and a Starbucks. And there has to be. There's a shitload of people there. Sorry, go ahead, Chris. What's your pushback on that, Chris, or do you agree? Well, there's a lot of flaws in that argument.

But number one is like there are many gyms that charge more than that. And number two is that there are gyms that charge more than 400 a month. You've heard of that. Sure. Yeah. Yeah. But what's more important is, is not the membership price. It's the average revenue per member, because some clients are not going to want to do group classes. And so they're going to pay a higher rate. Right. And so they, they might just do personal training or they might want group classes combined with something else. And so what that does

is it pulls the average revenue per member up, even if your prices stay the same. You know, the other thing- What's the distinction there? Before you go forward, there's two things you're saying, membership price versus average revenue per member. What's the distinction there?

I don't know the difference. So for example, like you could have a membership price of 150 bucks a month, right? But some of your clients, 10% of your clients will pay quite a bit more because they'll want private service or they'll want nutrition coaching separately or whatever that is. What about parking? Sure. Yeah. Like you charge 200 bucks. I mean, in Manhattan, you could probably charge 500 bucks a month for a parking spot. I mean,

it's not about what you can get away with. It's like what adds value to the client. And so for a lot of gyms, it's like a dedicated nutrition coach adds a lot of value. So they charge for that. And so that pulls the average revenue up, even if they're like the price of a CrossFit class stays the same. I'll add this in there. And this is also in the uh two brain brain business state of the um industry book i know chris is starting to get impressed with how much i'm bringing out of this

thanks man in 2000 uh no thank you it's making a whole show i'm gonna make money off this in 2016 In 2016, only 10% of CrossFit gyms offered nutrition coaching. Now in 2022, 73%. That's pretty cool. But he goes on to say that of those, they're not monetizing it correctly, meaning that the value that they're getting for the service, they're working harder and not necessarily making more money. Exactly. Exactly. And so he can – 2B Brain can definitely help you with that, but that is cool. And it shows that people care. That's the caring piece.

Yeah. I mean, you can remember, there were stories Greg Amundsen told me about showing up at the original CrossFit with empty Tupperware and saying, Greg, like draw a line on the Tupperware of how, how full I should make it with carbs. And this is my one for protein, like draw a circle in the Tupperware of how much protein I should have. Right. Like that's the kind of one-on-one attention that most people need. And it's just, you, you can't provide that in a group class setting.

So, yeah. And so you, so you offer, so you offer stuff. You offer nutrition, parking. What are other things? One-on-one. I mean, for me, that's about it. But other people have different things that they offer. Like they might offer an online service. They might offer an accountability program. A lot of gyms are adding what they would call a high-ticket service where maybe 5% of their clients take it, but it's $12,000 to $2,000 a month.

And that's full coaching and they're helping you in every way you can think of. Okay. I like it. Do you recommend gyms? What's like if you're going to put three add-ons to the $150 a month membership, what are the first three? Well, first you need an on-ramp. So when new people come in, they need to be brought safely up to the average level of your group. And so they need an onboarding process. Usually five sessions.

Some gyms go like even 90 days. And what they want to do is make sure that you're safe and you're comfortable and fluid in the movement. make sure that you're safe and you're comfortable and fluid in the movement. The second thing that people should have is a one-on-one or at least a very small group option, because let's face it, like some people could benefit from CrossFit, but they do not want to exercise in a group, you know? And then the third thing going by the data that they could be adding is like the option to have access to the gym in off hours. That's a dangerous one. You have to be careful with the way that you do that. But most gyms who offer that charge about $70 per month. The client finds a lot of value in it. And the key to all of it though, is like understanding

what the client values, not what you would value as an owner. So, you know, five years ago, gyms would be offering like weightlifting clubs where you could come in and use the jerk blocks for three hours on a Tuesday and surprise, nobody wanted to pay more for that. Right. But it's really like asking your best clients what they want and then offering that to everybody else. Oh, I like that. Uh, Hiller, uh, Susan, what do you think about this off hours, uh,

70 bucks a month to give people some off hours access? I, I, I like it anyway. You could, you're already paying for the fixed cost of the building and everything else. The, and anyway, you could find a way to create more revenue in there is going to be extremely advantageous.

Mr. Hillary percent. I like the key fobs. There's a service out there that gives you a key fob and then it just tracks members coming in and out to see who's using it when they're using it. Okay. You have to be careful and we don't recommend it for most people until they've got a solid service base because like it almost killed me.

Honestly, it was, we were offering this when we opened up and it's this way. Well, we're, this was before key fobs. So now you've got to have a human policing everything. Right.

And so now it's like, Hey, it's seven o'clock. The group is starting. The gym is full. You got to get off the rower. I don't want to get off the rower. Well, sorry, get off the rower. Right. And like, um, the other thing that would happen with us is we weren't insisting that they were being coached. So they would come in, they would do the on-ramp, they do the group coaching CrossFit for two or three months, and they would descend to the lowest priced option,

which was open gym. We thought the opposite was going to happen. They would come in, they would be so excited about our amazing coaching that they would just keep ascending, and it was the opposite. Oh, I would make it so that 70 was on top of that baseline. That's the right way. That's the way you do it.

That's the way you do it. I just didn't do that back then. God, I'm smart. You see how smart I am? How do you, if you are not, there was a commenter that's like, are there avenues in which you, the owner is not also the head coach. So you said that it almost killed you. Let's just say that you are not the head coach. You were the owner. How do you create a situation where that person gets off the rower because they know that it's got the priority of the class of the group? So there you've got systems in place where you write these policies out and you hold the staff to holding the policies. But now you've got two layers of humans here. You've got to make sure

that the staff holds the policies and the staff has to hold the policies on the members. That's really tough. And so, um, you know, you can systemize it definitely, but like, I don't work in my gym at all day today. And this is what they do. They have a clear set of systems and policies and that's how they operate everything. Like they know exactly what time to open the door, exactly how the class starts, et cetera. And they sign the paper for the open gym and then just like get off the rower at 7am because it's no longer open gym time. It's your fault. They know. Yeah. And you also have to mentor your staff a little bit. Like, Hey, look, if you let this person go over by a minute that everybody sees that and they go over by two minutes and it snowballs. And so you have to be strict, right. And teach them how to do that tactfully too. Um, I mean, I got one example that I was

thinking of when I said that story, this guy was a long time client. He was doing a half marathon row five minutes before class. Our general manager said like, look, we don't think you're going to finish in time. Just so you know, like class is starting in five minutes, no matter what. And he called her bluff. And when she was like, you have to get off now, you know, of course he storms out, creates a big scene, never comes back. And like, you know, impacts everything that ever happened. Yeah.

Yeah, exactly. Long-term for sure. And I would say too, that also sets the precedence for the members that witnessed that because they now show that their time and their class is the most highest priority for that gym and for the trainer. And then just one other little piece, when Chris talks about the systems and procedures that is in place and then managing the people and managing those systems, that's the transition. part to make from trainer to business owner, from owning a job to owning a business, because you switch from coaching people on the floor and doing that to managing systems, procedures and people. I just want to say something, Jacob, I hear you out loud. You're saying that it's unrealistic and it's horseshit. The numbers were thrown out there. I want to tell you that I think I

understand what you're talking about, but I do live in California. So I really don't know what you're talking about, but I want to tell you something there's a guy oh yeah it's fair it's fair this is cool this is the ohio example next totally cool let me let me just tell you a story here real quick are you good for time is everyone good for time yeah okay let me tell you a little story here uh my kids every thursday go to uh sunnyvale california um to a professional skateboarder at a park that's owned by the city. And they they take a skateboard lesson there that he probably teaches illegally. And it cost Mike. It cost me one hundred dollars. I slipped the guy one hundred dollar bill every Thursday for a one hour class. And this guy is so amazing on so many levels. Connects with the kids.

Love the kids is a true profession in his craft step by step has everything been doing it for years now um the park is is very nice and clean it's a bunch of rich asian women mostly uh they're skateboarding like 40 to 60 year old women really trippy demographics yeah yeah it's all the facebook you know amazon apple the people who are rich as shit already um and um and so uh if that skate coach charges a hundred dollars an hour and he teaches 300 days a year and he has four clients a day which is crazy which is what's the sustainability of a human being teaching four one hour classes on skateboarding? I mean, this is some there's you have to work out with your class as a skateboard instructor.

Yeah, it's not like CrossFit where you get to sit there and just say shit. You skateboard with these kids. You have no overhead. And if he does four classes a day, 300 days a year, this guy makes $120,000 a year. He cannot fucking live. He's never going to get a fucking girl and a fucking house. A skateboard cost – a new skateboard cost $250. I mean so I hear what you're saying like maybe in Oklahoma somewhereoma somewhere but like um a coffee at starbucks here

is like six dollars you know i mean i mean and i'm telling you millions of people are living like this in california so i i hear you and we can maybe punch in some other numbers but like like vancouver like where um chris spoke of that may be one of the most expensive cities in the world where half the buildings are empty because the Chinese have just come in and fucking bought everything. I mean, shit there is crazy, dude. So,

so, so I hear you. But, but, but not, but people like this skateboard instructor, I don't know. I don't know what the sustainability is of this.

He's never, when's he going to retire? What money is he saving? How is he going to meet girls? Like what's the, and this is an older guy. This guy's probably pushing 40. Sorry, anyone want to chime in?

Go ahead. I do have an Ohio example and an Oakland example too. We just happened to start with the highest one. Which one did you say, Oklahoma? Oakland and Ohio. Oh, but Oakland's expensive. Oh, Oakland and Ohio. Okay, we'll switch to Ohio.

Oakland's going to be crazy expensive. That's okay. Let's finish this one. I just want everybody to keep in mind. And i want you to know what happened in oakland they legalized marijuana and every fucking shithole in the town became so expensive because people wanted uh huge places where you would typically open a crossfit gym they started buying all these warehouses up and growing weed in them yeah okay happened in denver too okay uh so subscription um i would say probably about 600 bucks a month you know okay that's exactly in line that's like

a mentor plus a bookkeeper maybe you use other stuff i don't know uh taxes i mean that it depends right so it i guess we're probably talking about like property taxes there. If you have a triple net lease, you know, and you're paying $11,000 a month in rent, you're probably paying about $3,000 in taxes too. And I don't know if you guys know the story of what happened to Sousa, but Sousa had a gym and the taxes in the city went up. And in the small print in the contract where he rented the gym from, it says if taxes go up in the area, you guys have to take on the cost as the renters. Kind of close, kind of close. The building I was in got purchased for a much more higher valuation than was already valid for it.

So then the property tax went up because they were paying off what the company who bought the building was. And the property tax went up because they were paying off what the company who bought the building was. So overnight, mine jumped from $522 in what's known as CAM costs, the common area maintenance, and property taxes rolled into that. It jumped from $500 to $2,200. So it went up from $500 to $2,200, and then they backcharged them over a year. So you do the fucking math on that. That's what I mean. It's just crazy. I think cooper might have froze or he's not he did he did he did i was like

yes it was sorry just i did the math seven told me to yeah it is the and uh caleb it's seattle not oregon that we're in right here. Thank you. Sorry about that. Oh, dang. Look at you, Caleb. That's Caleb doing all that fancy stuff? Yeah, he's got the spreadsheet. And he'll run them side by side like that too because we could do a second one.

Cool. Man, Caleb learned. I thought he just learned how to bandage people up in the military. Look at him. He's a renaissance man. West side. Okay, insurance. Usually about $2,500 a year, so whatever that works out to.

The yearly on that, so it'll be closer to $200, Caleb. Yeah, $200-ish, yeah. And then what's merchant fees? So that's what Visa charges you, 3% of revenue usually. And so Brittany said she's spending between sometimes she spends almost three thousand what's a normal yeah twenty five hundred to three thousand sure depends okay depends where you are and stuff yeah so here's the number here we get to do the fun part so we're at 30 oh did that grow i don't think that grew when you put in that 2,500, did it? No. Oh, yeah. Oh, it did, yeah.

It did. Okay. Everyone get out their calculators. Is it this simple? How much are we going to charge per month at this gym for a membership? I can't tell you exactly what he charges, but I can tell you that the average, the average revenue per member is $270 and 35 cents.

So that's not what he's charging for a membership, but that is like all of the memberships, all of the personal training, all the nutrition coaching divided by the number of members you have is two 70 35. Okay. Will you just entertain me just for one second? Cause,

and just, and just make it, make it less than two 70. Will you say, because in this, in this two Brain yearly state of the industry report, it says – I didn't write it down. I think it says the average gym membership is – 160. 160.

Yeah, 159 a month. Okay, so let's go with 160. Let's put in 160 there. Let's just put 160 instead of 270, 35. I do like 35.'s nice nice touch okay so now we have to figure out how many of those members we divide uh 38 8 615 by 160 right and that would be how many memberships we have to sell to break even and now the coach doesn't even get in the coach doesn't even get in the coach doesn't even get any the owner

doesn't get any money exactly 241 members okay two hundred three so call it 242 so so let's say let's just say even 240 so you need 240 members and this gym and do you know how many members this gym has i think so and 4 000 square feet 271 members it looks like he's got 14 people getting a free membership for coaching so 285 total okay so does does that help does that let you see? Now, can you add, let's say you want your gym owner to make $10,000 a month to take home. Yep. and his wife and his two kids and his car that he has to drive back and forth in and just in his health insurance and all

those things. Buy Christmas presents for his family, all that stuff. Or Kwanzaa or whatever he does. $48,615. Now can you divide that by $160? $48,615 divided by $160? Sorry, Caleb. I know you're being asked to do a lot it was doing awesome i am retarded at

math so just give me a second no no you're good 348 000 divided by 160 yeah divided by 160 yeah so now you have 303 so you need 303 members and by the way as we get to this 303 members. And by the way, as we get to this 303 members, you have to remember that a bunch of this other cost would probably start going up. Also remember the cost of each member is not – Remember that Chris said that the membership cost is $160, but the value of each client is $110 more. Right, and we'll get to that. We'll get to that. We'll get to that in a second.

So if you charge $160 for a gym or a membership and you're in Seattle, you need 303 members, but then it becomes like a dog chasing its own tail because then your labor and coaching goes up, your supplies go up, more equipment breaks, et cetera. Everything goes up, right? You're probably your insurance has a limit. Once you go over like 200 members, your insurance goes up. There's all sorts of things that will start happening to you. Okay. If anybody actually wants a P and L where they can put these numbers in and have them change automatically,

just go to start a gym.com and you can download one for free. Okay. Is that your website yeah okay start a gym.com okay and um and he i think he did say how many members this gym has this gym has uh 285 285 okay but but but 14 of them are for free so let's say it has 271 yeah okay so now let's figure out um that the let's make the membership cost what did you say 270 so his arm is 270 35 yeah which is like and what does that mean people buy bottles of water they get a massage they got a nutrition they get one-on-one all these other things you stated yeah they've bought the off hours access. They bought the on-ramp class. Yeah.

Some people will have bought like are paying 500 a month. Most people are paying 160 a month, but the high value clients like pull that up, right? Okay. Don't misconstrue when I say high value clients. Everybody's a high value person. It's just some people pay more. It's someone's argument for first class in the airplane. Yes, yes, yes, yes, yes. Let them pay all that crazy money that's right yeah yes uh okay 30 uh

38 615 divided by 270 dollars the only thing that happens when you go oh and now we're at your magic number sorry chris we're at 143 143 members weird how that works but but this dude this dude still doesn't get to take money home with that number no you've got him taking 10 000 home don't you or no that's it again okay no we took that off again that's at 38 016 right so that's your shit breaks even at 143 members at this gym at this gym it does like in general and including staff pay, right? In general, if you're not including staff pay, you should be able to cover your expenses with 50 members. That's a good just kind of rule of thumb when you're determining what to charge. To say that.

So you're saying a good plan for a gym, what you like, what you want is at 50 members, everything's paid for except the owner. I mean, yeah. Or, or less. I mean, if you can do it with 30 members, that's even better. We chose like the, are you kidding me? How would that happen? Okay. Let's go to Ohio. This is great. I don't see, I don't see how that could happen, dude. That seems impossible to me. I don't see how that could happen, dude. That seems impossible to me. 30 is like the lowest, right?

50 is pretty good. This is like an extreme example. And we chose that on purpose because it is a very expensive market. But I bet you there's 2,000 gyms in this market. Could be. By this market, I don't mean Seattle. I mean, Hong Kong, Vancouver, San Francisco, Manhattan, Los Angeles, Miami, Chicago. The other key to this guy's success is his retention is stellar. Like I'm looking at his retention numbers. He churns about 4% of clients a month,

but that means that he still has to bring in 25 new members a month to grow. So you got to keep that in mind. Like when you get to these gyms of 300 people to maintain like really, really good retention, you're still getting a new person almost every single day. Like that is your job. Oh, one of our friends has a gym with 600 people, a dear friend of, I think of all of ours. And, um, and, and the stress that he told me, he says they lose about 12 people a month. And so they have to bring on 12 people a month and the, and I could only imagine the stress of on-ramping, uh, 12 to 20 people a month, the burden that must be that's crazy.

Or yeah. Or learning the marketing to do that is tough. Yeah. Uh, I do want to add to that statistic that you just said. I'm client retention in the this is going to be a good one. You guys are going to like client retention in the gym industry is about seven point eight months, meaning about every seven point. A client on average lasts only seven point eight months. So some people last 15 years and some of the life of the gym and some people leave after a week. But two brain gyms the uh retention is 18.8 months almost three times as long what why why is that because you teach them how to retain people you tell them to clean their bathrooms we're very we're very intentional about retention

because um i mean honestly that's how you build a sustainable gym it's not how fast you can get people it's how long you keep people and um so adding an on-ramp program is massive for retention i mean even that will like almost double like the like retention length um and then having check-ins every quarter where you're like are you making progress uh encouraging them to refer a friend builds their retention because now they've got another friend in the gym, right? So there's like, you know, there's a whole bunch of different pillars to retention that we teach. But the key point is that you're paying attention to that more than anything else. And the real reason is that like, honestly, if your gym's only keeping somebody for seven months, they have not made a life changing commitment to fitness. It's not long

enough. I will also tell you this, this goes back to what we were talking about in the very beginning of the show. And it's probably really interesting issue. You probably have it to brain too, because you're giving people tools and then they, and then they're done. That is the biggest problem for CrossFit Inc retention like that. Everything else is just off. Like everything else is so easy to do. It's easy to sell L ones because it's great. It's easy to get people to affiliate. It's all, everything's easy.

The retention is no one's cracked the code on that. The retention is, uh, the fact that affiliates come and then they leave. Like, what did you say that we suspect there's been 30,000 gyms, CrossFit gyms. That's a wild guess. I don't know. But the answer is make the gyms more money because it's not like the price of the affiliation goes up the more successful I am, right? If $3,000 is a huge decision to me, then I'm going to think long and hard about the value of that $3,000 every year, where if it's really like nothing to me, then it's just an easy, yeah, keep it rolling. Justin is saying merchant fees on 242 members would be $1,200 at 3% of the membership cost. Oh, cool. We can adjust that then for the sake of this.

But that's membership cost. If they're being charged that extra $110 anyway, it's still being charged. Yeah, that's right. What do you mean? That's on membership cost which was 160 and we're talking about the arm which is 270 which probably brings it back up yeah okay yeah i love it there was an auditor in the audience that's amazing oh we got we got a handful of them and i wonder too for those of you guys auditing please let us know which gym you run. Run a profitable gym, two-brain business.

Real data, $270 average revenue per member is not uncommon among two-brain clients. On September 2022, leaderboard, the 10th place gym was $365. So $100 more, and that was the 10th place gym. That's awesome. Jim World, 12 cancellations with 600 members. Awesome. This is a pretty awesome dude. That's a good churn rate. That's amazing. I wouldn't stress over that too much.

I don't care if it's true or not, to be honest with you, but this dude's a great dude. The spirit of what I'm saying is just that, like, I was just adding to what Chris was saying. That, like, yeah, people don't realize that. People leave. People move out of town. People have sex with the wrong person at the gym and have to leave.

Shit happens. Tune into our last show. And, by the way, the move thing has been crushing me out here in California. The what? The moving thing. I would say that, well, I could tell you this with confidence because we have the data.

What's the moving thing? What's that? I'm going to get to it. So I could tell you this with data because we do exiting surveys here and people, our biggest loss is people moving out of state. Oh, oh,

oh, that kind of moving. Okay. Yes. I thought you meant moving your gym. I know. That's why I was getting to the end there for you. Sevan retains viewers.

Maybe there's a value there. He hasn't tapped. I don't know. The subscribers keep dropping. I don't know what's happening. Hopefully having Chris on. I think people come for the game stuff and then find out that there's other stuff here. Retention stat.

stuff and then find out that uh there's other stuff here uh retention stat uh in 2018 the average gym owner who filled out our gym checkup would have earned an extra 45 000 that year simply by increasing average retention by two months wow yeah that's crazy please stay please please stay two more months yeah okay back to our spreadsheet how are you are you on good on time caleb okay thanks brother okay let's do ohio we'll do ohio fast yeah this could move quick here oh okay so their recurring expenses total so this is is rents, heat, lights, et cetera, is $8,065.43 per month. Okay. And how much of that is rent, you think? I would guess about half. Okay.

So 4,000 rent. Okay. And then the rest would be like their insurance and whatnot. So the grand total at the bottom of this sheet for these people would be, excluding labor, would be $8,065.43. Okay. And can we put, what's their labor? Do you know their labor? Their labor is higher.

So their labor was, so this is not including the owner, $13,040.29. Okay. So let's spread out that other 4,000 over there. Utilities, licensing. Let's put in the ones we know. Let's put in licensing we know is 250. Do you want to do this for me, Sousa? What are we trying to match it with? We want to make sure that they have another $8,000. So we have $4,000, and then they spent another $4,000 on utilities, licensing, marketing, supplies, equipment, subscription. Yeah, so just for simple math, we could just break that into a couple $500 pieces. It won't be accurate to the line item, but at least it will be accurate to our total.

Just to move through this one a little quicker to save time. $500 to $4,000 in miscellaneous. There you go. That's how I do my books too. Big guns love the miscellaneous. Journal entry. Go ahead. So go ahead and put $500.

Why don't you own a gym anymore? Thank you, Caleb. Go ahead and put another $250 in – yeah, okay. $ go ahead and put 500. Why don't you own a gym anymore? Thank you, Caleb. Go ahead and put another 250. Yeah, okay. 500 or whatever. Yeah. I mean, we're not making it consistent with the light item. We just want our total down at the bottom.

So that's 1,000. Just put 1,000 for supplies, 1,000 for equipment. That brings us up right there to 3,000 in total. And then just go to taxes and drop in another 1,000. Just give it to the government. Yeah. There you go. damn right okay and then that so then that total would be uh 21 000 40 right yeah he'll get that squared away right here you just gotta click all of them hit enter and we'll have our total bada boom 21 2 9 0 okay sounds right and the membership cost there uh chris their arm is 238 88 which means uh i would i would guess that their like membership average price is around 170 ish and

then the personal training and everything else pulls it up really so you think that that gym in ohio i mean is is more expensive the monthly than the seattle gym uh yeah plus minus 30 bucks probably okay interesting this is really common in crossfit like people don't set their prices based on their location they set their prices based on their perception of crossfit so we do see this like this gym in ohio charging the same as what they would charge in seattle yeah the reason why that membership number is so important is i'm very curious to see how many um members they need okay um to uh because we can make because i think that's a big problem i think people go into gyms and they say hey why is it 150 a month to train here yeah i don't even see any expensive

machines put 160 yeah just make an equal cost and you'd be surprised i remember in my early years a few like five or so years back i went to a gym in the middle of nowhere in arizona and i was like how much you guys charge here and the place was like much bigger obviously taxes much lower how much people and they're like oh we charge x and it was at that time 10 more dollars than i charged and i was like what the fuck am I doing? It's both. Will Branstetter is saying that number you put in for membership cost was the average number of memberships in that manual. It's both.

It was both. It's 160 gyms, I think, on average, or 159 members, and it was the average cost, right? I think that number was both. The medium gym membership is $159 a month. Yeah. Yeah. And then so also we were – but yeah, that's right. I think I'm right, Will. I appreciate the check. Okay, so let's divide then $21,290. $21,290 by 160. And we get 133.

Yep. So this gym needs 133 members. Yeah. Keep in mind, though. So isn't that crazy? It's, it's, it's, um, it's $17,000 less a month to run, but, but, but still only nine members less. Yeah. Look at the staff cost though. Right? Like that staff cost, he's paying his staff a lot for Ohio compared to, you know,

if we assume that 19,000 is okay, pretty good for Seattle. Then we've also got to assume like 13 000 is a ton for ohio again neither includes like what the owner is making the owner in ohio is doing really really well i've actually got that here somewhere we could figure that out pretty quick i'm sure yeah right yeah i mean oh i'm looking at the wrong one do that ten thousand dollar increase on the twenty one thousand and then do it off of the ARM. I bet it's – Yeah, $12,497.81. $31,290.

You already did the math? I've got it on his sheet here. Oh, $31,290 divided by $160. Is $195 per – okay. Okay, so yeah,160 is $195. Okay, so yeah, he is. So he's making – But you want to divide it by the ARM because that's the actual number he's pulling in. So it would be $31,290 divided by $238.

Oh, yeah. Sorry, sorry, sorry, sorry. Thank you. Thank you. Sorry, sorry, sorry, sorry. Thank you. Thank you. 31, 290 divided by. Divided by 238. I'll put 239. Yes, sir. 130, so 130 members. And that's what the gym owner making 120 a year. Right, right.

And I think it's the Chris Cooper number of 150. He'd be making more like 140 yeah maybe even maybe even more right yeah okay and to address uh sarah's um question here i'm pretty sure these labor costs correct me if i'm wrong chris are making it to where your gym is turnkey as an owner you're not on the floor because the labor costs cover yeah so hours that's a really great question and it could i happen to know who his gymnast is. And it is the case. He's not in the gym every day. He has a general manager. And that's why that labor cost is high. You're right. Yeah. Usually, your labor cost scales with the number of clients that you have. So if you have more people, you need more coaches. The one that doesn't is if you have a manager, and that's just going to be a fixed cost. And in this guy's case, he does. So, man,

there's some astute people watching. Oh yeah. We attract, we attract an audience here that they are, they are, they are smart and they're enlightened. So I just want to see this real quick. So a one 60 times two 39 equals uh 38 240 so that this dude is this dude is bringing in um just from this rough look of anywhere between 10 and 17 000 a month he takes home yeah 12 497 81 and it's just because we rounded in a few spots. But that's pretty good. That's pretty good.

So let me repeat that again. This guy, that's $38,240 a month he's making. And his total costs are $21,290 for a difference of, here, I'll tell you exactly, $21,290. It's $16,950. Yeah, his actual is like $12,500. Okay, so we got something wrong, but okay. Yeah. Okay.

Awesome. How long has that gym been open, that Ohio gym? I'm not sure. He owned two at one time, but one was very far away, and so he just recently sold it. It wasn't doing as well, even though they had way revenue um because they were in a very high touristy area and a lot of their revenue is coming from drop-ins so it's hard for them to project every month uh so they'd like overstaff on coaches etc um but the gym in ohio is crushing it for them uh thank god i live in portsmouth ohio chris is that is this a bigger city in ohio um this this owner is yeah i don't even know if there are any bigger cities in ohio uh hillary

no forceful but are we doing are we doing another avatar here or is that kind of what we're doing on the spreadsheet i've got an oakland one too yeah an oakland one okay i'll ask the question at the end more towards uh hillary hillary can you tell us the most you ever made you ever took home at your gym myself personally yeah yeah fifty two thousand dollars and but and you had two owners so you would have taken home 104 000 incorrect it wasn't split that way it wasn't he had he had a uh another job where he made most of his income. So most of the money was put towards my salary, the leftover. And how many members did you have? Anywhere from 135 to 150. Okay.

So I can allot this to having our ARM not being nearly as high as the ones that we have shown right here. So our membership was 160, but the ARM would have been closer to 140, which is actually under. And that was because we'd have people like, here, go clean the bathrooms, we'll give you a free membership. We had people coaching.

I didn't even know that was possible. Coaching memberships. It's very common. Yeah, that's like the main source. That's why you asked me to be on the show. This is an example of what not to do. Hey, so that's fascinating. So you're saying that your ARM – what's that stand for again? Average Revenue Per Member.

Average Revenue Per Member can be lower than your membership. That's not – when he said that, you're not shocked, Chris, when Hiller said that? It's so common. No, it's so common. Because he's too nice? He's giving away free shit way too many discounts or we like grandfathered rates for somebody that just happened to stumble by when we were opening up or whatever but it's really common for people to have like a very low arm and then they try to make up for it in volume by just attracting more

and more people and the worst case is you know we saw flagship affiliates, like even in Hawaii, go under because of this. You offer more discounts to get more people in. You fall short, so you offer more discounts again. And it's this downward spiral. Yep. Check out the comments. Everyone's in agreement because I just said what no one wants to own up to, in my opinion. So when Hillary – making 50K a year is actually pretty good with with uh

we were for that murdering it in terms of attendance and membership numbers we were not murdering in terms of arm you were getting people amazing life-changing results but you that was the goal it's always been the goal it's more common than not that's right yeah and we could do this oakland model after that like we could put in no labor costs we could just put in the stripped down expenses and then run it how i could give you the oakland numbers you want to go but but i will say something here okay so 52 is just slightly above like the industry average for like a personal trainer strength conditioning coach which is like 43 or something.

Say that, repeat that one more time, Chris. So if Andrew took home 52 a year, that's slightly more than the industry average that you would make as like a strength and conditioning coach at a university or like a decent personal trainer at Equinox. But imagine if that number was twice that, right? Like a CrossFit affiliate takes home an average of a hundred thousand dollars a year imagine if crossfit hq could say that think of the level of professional they would attract to the crossfit brand yeah i wouldn't be talking to you right now

i tell you that much that's it really you should get out of here right i'd still have my gym yeah yeah yeah oh yeah and that is the big opportunity right now that's missing in the trifecta is that if CrossFit could provide a value proposition to the affiliate, that was twice as good as what they could make doing something else or driving Uber and paying for their CrossFit membership somewhere else, you would start attracting higher level professionals. And that would mean more gyms, which would mean more trainers,

which would mean more outreach, more impact. Is this a kind of a facetious comment, like 50K for 80 hours a week, meaning he's saying like, hey, don't forget how hard you have to work. But I think what Chris is saying. Very good point, yeah. But I think what Chris is saying is you can do it with working 30 hours a week. You can do it by only working Monday, Tuesday, Wednesday, Thursday if you own the the gym, you could take three day weekends, right? It's doable, right? You could. That's not the average. Yeah. The average is the hours a week. Sure. It is what?

Like 80 is an exaggeration, but 60 is not like that's typical. So what do you do? Are you saying that's a good thing? Who the fuck gives you a number after taxes? It's before taxes. Are you saying that's a good thing? Who the fuck gives you a number after taxes? It's before taxes. What do you do, Chris, if you've been running a gym for five years? You start your gym at 23. At 28, you decide to have a kid, and you want to start working.

Instead of 55 hours a week, you want to take Friday, Saturday, Sundays off and only work Monday, Tuesday, Wednesday, Thursday. want to take a Friday, Saturday, Sundays off and only work Monday, Tuesday, Wednesday, Thursday. Well, I will say like when Avery was born, she was born at 5 AM and at noon, I left the hospital to go train clients. That's what you don't want. So the way that you do that is that you build a staff that wants to be professionals and make a career. And the way that you afford that staff is that you charge enough value that you can afford that person. Now that person is going to grow the pie also, right? Like you're investing in staff and the return that you see on that staff should be like 2.5 X what they pay them, but that doesn't happen right away. So you need to make enough of a margin that you can

afford to hire somebody. You know, another thing that happened to me, I tore my, my QL in a powerlifting meet on Sunday afternoon and I had to go to work the next day. Like Andrew, right? Like Alex, you guys know, yeah. Yeah. I actually have another story about that too i was informed that my now father-in-law at the time my girlfriend's father had uh passed away at the house he was suffering from pancreatic cancer and i got the phone call and said okay i'll be there when i can and i went to the gym and coached two classes and then went to the house my favorite was i got lasik and i had to go coach after like i can't see it's like yeah your lights are off My favorite was I got LASIK and I had to go coach after. I can't see.

Driving lights are off. Sherman Merrick, a former guest on the show, was Sherman a two-brain guy? Was, yeah. Oh, okay. I had about 110 members and made about $9K a month, Gainesville, Florida, college town. I don't take home as much right now from the gym because I'm not involved so that's good 110 members 9k a month take home for the owner yeah and sherman is really good at um referral marketing like affinity marketing too so he didn't mean if you look into his eyes you're buying shit from him he's a very charming guy yeah yeah

i read that comment i like i still don't understand referral marketing i just hear taking someone out to a cup of coffee and and sell them shit uh data the 10th place gym owner on february of 2022 net owner benefit leaderboard earned 15 667 i like it's how you keep giving the 10th place too that's pretty cool okay so I believe that there's a leaderboard. Yeah, man. So that's, that's important to me because what we do is we'll say like, okay, what are the best gyms in each category doing every month? And then we'll interview them. Michael put them on the podcast. Well, like, what are you doing? And then we'll take that and teach it to everybody else. And that's how these gyms keep doing way better than mine ever even did so you have a podcast a two-brain business podcast

where people can listen and hear like success and horror stories and like learn this learn yeah the horror stories come from me the success comes from our clients okay so yeah uh cory lapel in vancouver has more than doubled his revenue he better living in vancouver almost doubled his membership that's awesome i reduced his work hours dramatically and quadrupled his salary since August of 2020. Wow. That's amazing. I'm like quadrupled. Yeah. It's a nice word. Crossword of power. That's awesome. And then just to address

this comment, yes, the reason why all three of our stories have that same comment was because we either couldn't afford to have anybody or it was during the day where if you were doing a value exchange membership for coaching or something like that, they just were at their regular jobs. Yeah. And they're not on call like that because they're volunteers and they do their two, three hours a week. And it's hard to get them outside of that window.

Or you just can't afford the 30 bucks or whatever to pay them. Like that was me. Yeah, that was me in the first two years. Yeah. Hey, Chris. Go ahead. Go ahead. Hey, Chris. Go ahead. Go ahead. Tell the story.

Go ahead. Sorry. Imagine not having $30 to spend one more hour in the hospital with your new baby. It's terrible. That's what we're trying to help people avoid. Yeah. Chris, there's this – I don't know if this is going to be relevant to the gym but i but i think it is that there's got to be a time where you just know you should tap so i'm going to give you an example

of like just the the youtube space so if you're in the you there's a there's a threshold in the youtube space where you have to put in the time like so the vast majority of youtube stations 95 percent of them are just swimming barely barely trying to get a hundred viewers a month. Right. And then that, and I'm just making these numbers up. I don't know the exact numbers. Taylor, take your hand out of your mouth. The top 5%. Thanks mom. Yeah. That's what I say to my kids all day. The, the, the top, the top 5%, there's a massive disparity between them. You know what I mean? The top 5% of YouTube channels get 201 viewers a month to 100 million views a month, right? But you're in the top 5% if you can just break over this threshold because there's so many people groveling down at the bottom.

At some point, let's say you've done a podcast for five years and you still can't get more than 10 listeners a show. You have to be like i'm gonna i quit i quit like is there a point where like you you just you're just a weirdo let's just face it like you're just socially fucking awkward uh the second you start talking people tune out like you just you're not made to run a fucking gym yeah i mean i can't give you numbers on that because honestly i don't attract those you don't have a weirdo page let me see if there's a weirdo place on the leader who's the 10th place who's the 10th weirdo i mean we know those people we all have those people in our life where it's just like someone just needs to tell them like uh hey

did you give horrible haircuts stop like you've been at it 20 years and you just suck stop i mean doesn't the market decide and don't they just take that as a sign and eventually stop and then i also i also hate the whole thing about like when do you when do you just pack it up right because if you are only having 10 listeners on on your on your show for a certain amount of time, depending on what other metrics you're using for success, I mean, if there's none, then yeah, maybe it's time to hang it up. But if you're getting these other metrics that are also continuing to rise, maybe you're three feet away from gold.

So stopping would be bad at that point. So you're just going to have a dashboard of metrics to make sure that you're understanding you're moving forward and growth is happening in various different ways, right? You wouldn't be a crossfitter and say, well, my back squats never improved.

So the crossfit is not for me, but yeah, your two K row prime approved. You could run a mile without stopping. You could now swing and hang from a pull up bar. You couldn't do that anymore. So just make sure you have a, a dashboard of metrics you're looking at.

Okay. I'll give you a real world thing. There's people out there whose breath are so bad that they just can't be a coach. They got, like, some piece of meat stuck in their mouth behind their fucking – one of their canines that's been in there for 18 years. And no one's told them to take it out, right? It's in gum. Not even gum hell. We had a guy who worked at HQ.

Oh, shit. Now we're getting to the same thing. If you were in the – I liked the guy. But if you were in a room with him, you'd be in a room with him, and there'd be meetings, and there'd be 12 people in the, I liked the guy, but if you were in a room with him, you'd be in a room with him and there'd be meetings and there'd be 12 people in the room and I'd walk in and I could just smell his breath. It was crazy. I'm not even bugged by breath. I'm not bugged by BO. Like, like I loved India, like a bunch of dudes running around smelling curry.

That shit doesn't faze me at all. But there's things, there's things that are just, um, uh, there's gotta be things where you just can't succeed is what I'm saying. It's just like, hey, dude, it's just not for you. There's certainly that. And like Matt said, the market usually filters them out. All right. What's more common is somebody will come to us and say, I just don't have the energy to fix this.

And so what we would typically say to them is like build build the gym up so that you can sell it and actually get some kind of reward for your work oh can can you do this for three more months and then they'll okay yeah i can do it for three more months i can build the gym into something valuable and then the thing that makes the gym saleable is the thing that makes them want to keep it because three months later they're like oh i'm not working 60 hours i am working a little bit and so those but you know generally uh i'll be honest with you like people who are assholes don't want to work it with or the creepy guy let's just even go there just the creepy guy like you're just a creepy guy like somehow you got some something fucked up about you and uh no one's ever you you can't fix it and you're just

creepy and no one wants to bring their wives or daughters or their sisters by the way the person am i talking about someone who has bad breath like you just smell their coffee breath on them i don't give a shit about that stuff i've transcended all that i don't care about garlic breath i don't care about onions i'm talking about just someone who like they smell like a fucking raccoon died in their mouth you've obviously got somebody very specific in mind oh if you meet once you meet one of those you're you're uh aaron schiebel before we get to oakland yeah maybe i drank too much coffee someone's aribo five dollars uh thank you any advice how to start raising membership prices to start getting more in line with where we want to

be uh in wisconsin near milwaukee yeah so aaron there's a there's a process to this and we've had prices to start getting more in line with where we want to be in Wisconsin near Milwaukee. Yeah. So Aaron, there's a process to this and we've had to go through years of testing on this, but basically I'm going to lay it out for you, man. So first off, you want to figure out where you want to get to. Okay. And then, and you want to figure out the arm that you want to get to first because raising your prices is hard. So you want to find the easier path first. So if it's just like, well, our membership price is too low, but we could also increase our arm first by adding some personal training, adding an on-ramp, having a nutrition option, go that route first. It's so much easier. When you've exhausted all the other options and raising your rates is the only avenue left to you, remember that you

can only go up by 15% at a time max. And that includes removing discounts, that includes increasing rates. So there's usually some steps to this. The first step is like, you know, if you are going to go up by, let's say $10 a month and you work through the math with like an objective person, a mentor, your accountant, whoever, you're going to go up by $10 a month. The first thing that you figure out is like, how many people could you afford to lose and still break even? So if you've got a hundred members, you're going to go up by 10 bucks a month. You go, okay, I can afford to lose, you know, 10 people. And I would still make the same amount of money. Then you print out your client list and you pull out your highlighter and you stroke like the, here's the 10 people most likely to quit if I go up by $10 a month.

By the way, if somebody is quitting your gym over $10 a month, at my stage, I'm happy to say goodbye, but maybe you can't. Get the fuck out. Yeah. Story. But it's a good reminder. But what about this also? Um, uh, this is, this is a real thing. You could have people on the books. I know you guys are going to hate me for saying this, but you could have people on the books who don't realize on their books. And when you raise the

price, they're not leaving because you raise the price. They just realized, Hey, I don't really don't need this anymore. You're drawing attention to them. Yeah. And that comes down to your core values. Like some people need, don't need to keep keep those people and I get it, but nobody wants to keep them forever and offer a service that nobody's using. Right. Okay. So it's like keeping a girlfriend around just for, well, you know, okay, go on. Yeah. No, I don't. Yeah.

So you call those 10 people and you're like, here's the situation. Our rates are going to standardize January the 1st at this rate. You've been enjoying the current rate since 1985. Hope that's been good to you. Do you have any objection to us bringing you to the average rate that everybody else is already paying? So the first step is equalization. You get rid of discounts. You get rid of the people who are underpaying and bring them up to the average. You get very few objections to that. And then from there, you know, a lot of gyms now even add in like a 3% increase every single year as part of their gym agreement, because like, look what's happening with inflation, right? We didn't even address that. All these other things are going up right now. And the gym owners are usually not raising their prices.

So their own income is shrinking by 5% as inflation happens. My kids went to a Montessori school for a little bit. And it was built in every year. The monthly price went up by 3%, which is pretty crazy too. If you think about it, because if your kid's going to go there for 12 years, um, I mean, the price is going to go up significantly. It was going to go from basically 2000 a month to 3000 a month. But, but yeah, I guess it's smart to have that built in. Did either of you have that built in that, that 3% increase a year in your gym memberships? No, I didn't. I wish I had, uh, God, that sounds really smart. That might be

two hours and 20 minutes that might be the best advice we got so far we're just getting going yeah i mean so what happens though is the gym owner like assumes that they're giving the best service they possibly can on the day that they open but they get better as a coach and they get better results and equipment and space and lights and they clean better 10 years in they're still charging the same price, but the value is increased 82%. That's the problem. What about when you raise your rates to paint the walls the same month? You know what I mean?

Like do some sort of thing. No. You never want to tie the rate increase to a specific outcome. Like, hey, we want to buy new bars so we're increasing your rates and then the members like these bars suck let's go back to the old rates right because then yeah you're you're running a democracy and that's a great point i'm late how does sebi get people to stay on this long uh ask your mom uh riley s ouch sebon chris has given great tips i wasn't suggesting that he hasn't given great tips. I just, that 3% one is just really easy to put in and it makes a significant change.

I never would bury Chris. I love Chris. It's much better when you tell people just the way it is the second they sign up. That's one thing I know for sure. It's like, hey, what you just said about, well, we're going to charge because these barbells are new. It's like, well, we hate these barbells. Let's go back. It's like, that's kind of an option that was there. It's like, we're going to charge because these barbells are new. It's like, well, we hate these barbells. Let's go back. It's like that's kind of an option that was there.

It's like, we're going to get these new bars. They're going to be cool. It's like, well, they're not fucking cool. It's like, well, you knew they were coming in the case of the sign up 3% every year. It's better when they're just told. That's something I know. Ben Bergeron said he charges $1 more every year. You know what's interesting about that is the homes that I have that I rent out,

even if I don't want to raise the rent on them every year, I always do. So even if it's just $20 or $25 a month, I just do it. And I know that they're laughing at me, but it's okay. Because after four years, that'll be an extra $100 a month. But I just want them to know that, like, hey, it's going up. It's going up. I just hope no to know that like, Hey, it's going up. It's going up. I just hope no one notices that dollar. Do you have any opinions on this? Charges a $1 more every year, Chris?

Yeah. If that works. Yeah. I would honestly say that 3% is just kind of more in line with what the cost of living is for the coach, but yeah, a dollar is better than nothing. And I do nothing. So Ben's doing better than i am right there you go humble christ whoa whoa whoa whoa i wouldn't go that far you're not gonna let me be that humble just let that go next topic yeah okay okay thanks no i respect i respect where's your notes yeah okay let's go back let's go ahead the key is that my gym doesn't have to be the best one in two brain in fact if if it's working

every new generation should get better and better and so like my gym has a mentor to bring them back to the two brain average again, you know, because the average just keeps getting better. Let's pull up the spreadsheet. While we pull up the spreadsheet and talk about Oakland, I would do want to say this. Do you think that somehow you might be a lazy gym owner manager because you have other businesses and other streams of revenue like Javier Jaime,

right? So he has a real job. And so he's got this gym on the side. So maybe he's not even motivated to maximize it. He's motivated to feed his family. He'll go into full-time gym ownership. I mean, that's the dream for everybody, but it takes people a different amount of time to bridge that gap. Okay. Then let's say, let's talk about you specifically then. Do you think that there's things that you're just like, you let your clients and your coaches and people get away with because you have other revenue streams, like you're not maximizing your gym, not maximizing the gym. No, I can only be CEO of one company at a time and two brain business.

You know, for three and a half years, it was a daily blog that made me no money. Now it's a massive worldwide company with like 70 staff and requires my best attention. Yeah. So in those three years you were doing that blog, that's a perfect example. Did you see it grow slowly or at any point where you like, Oh shit, I have horrible breath and no one's coming to my blog. Yeah, no, I was writing myself the textbook that I needed. And basically like number one encouragement, like Chris just keep going. But a lot of it too, was like, you learned this thing and you can't ever forget it. Um, so three and a half years I did that. And then, um, the CrossFit affiliate blog found it. And one day I had 100 readers and I thought I had won like the reader lottery or something. Yeah. That's awesome.

Yeah. Hey, people ask all the time about this show the numbers on this show are so fucking tiny but we're still in the 0.5 percent of biggest podcasts in the world and it's crazy i had actually a friend reach out to me yesterday and they're like dude how do you do it and i said our live shows used to only have 40 people i remember when we broke a hundred that susan and i open mouth kissed through our cameras cameras after the podcast. I mean, it's crazy. But as long as you keep growing the viewers, you know, you kind of know you're doing something right. And you have to keep kind of like taking some risks.

And that's not your primary motivation. I mean, you're just you're passionate about doing this in service of the CrossFit community. not your primary motivation i mean you're just you're passionate about doing this in service of the crossfit community that was what my facebook post this morning um was just kind of a tribute to you and why you do this savvy and that's that's what fuels it right that's what fuels it right right so someone asked me the other day they're like dude why do you care so much and like part of me is like it's all i know um but but but honestly Chris, if no one watched, if I didn't see growth, if I didn't see myself making myself more vulnerable, if I didn't see myself getting better guests, if I didn't see growth, I would stop. Yeah.

I, I, um, there's a certain plants that I love that I try planting in my backyard like six times and I'm, and I just can't do it anymore. Like I would have to like start putting in the winter. I'd have to start putting like sheets over there or something to keep warm i just don't want to do that there's only so much i want to do to succeed right yeah so yeah it's it's it's interesting you're right there's no way i would have the energy for this if i didn't love it but on the other hand um it's got to grow yeah so i tolerate hillar that's right he's's right. He's my mentor. He brings his audience.

Well, he just tells me things that I can't know at 50 that he knows at 30. I taught him how to use Canva. Yeah, 30. Nice. Okay, Oakland, California. I brought that comment that was the 45,000. Oh, yeah, please. Yeah, go ahead. Yes, go ahead.

I just wanted to let them know that we're doing this monthly. So we're looking at labor here at $13,000. That's monthly for Ohio. Yeah. So this cost right here would be something like, what, $3,800 would be the monthly number. And when you say labor costs, you also mean like paying into Social Security, workman's comp, all that stuff. All that, yeah. Yeah, okay. Yeah. That shit's All that, yeah. Yeah, okay.

Yeah. That shit's a nightmare in California. Yeah. Okay. And I – yeah. So that would also include maybe your cleaner too, right? Maybe not frontline like coach. Right. So –

Okay. And so Seattle, expensive city. Ohio looks like half the cost. And just so you know that these numbers for Ohio aren't correct, but the nut at the bottom, the total, the $21,290 is correct. And now we're going to go to Oakland, California. Now, Oakland's a trippy city because it's some of the most expensive real estate on planet Earth and then also some of the cheapest real estate on planet Earth. It's a trip. I'm glad you said that because their, um, recurring expense. So their rent and the heat and lights and stuff is only 5,300 bucks a month.

Wow. Yeah. Wow. They're not, you know, main street, but there's, there's a giant CrossFit gym right on the Berkeley Oakland border. Uh, that it was Berkeley CrossFitfit and it i don't know when it closed its doors but the building hasn't been re-rented out and i bet you their rent there was 20 000 a month probably i bet you it was something nuts it's right it's right by the university yeah uh okay so um so let's figure out what let's put in some numbers for their uh rent um uh what do we think their rent is um well it's got to be lower than that so we're gonna say probably around uh three thousand okay so the grand total is 5300

but they also they bought some equipment worth 2700 i don't think we want to count that okay and what do what are their labor costs uh Staff pay was $6,342.15. Okay. Let's just put it all in rent for sake of ease. Yeah, yeah, yeah. Go ahead. Okay. What was the number again? Sorry, Caleb. $53,1927. $53,1927. No, no, not for labor. Sorry, sorry. Caleb for rent. 5319. Calm down. So this is just a monthly everything. And then labor is a separate number. Yep. So labor. So we're putting into rent

utilities, licensing, marketing, everything into rent. Yeah. The exception of labor. Okay. Yeah. 5320. Do you want labor? Please. 634215. Oakland, California. This is Oakland, yeah. Basically, for those of you who don't know, San Francisco and Oakland and Berkeley are basically all the same city. They're just separated by bridges. There's a body of water in between them, but it's the same. separated by bridges there's a body of water in between them and but it's it's the same it's all it's um i guess you could say they're suburbs of san francisco but now they're just big it's all

just one giant mesh and then down below we have san jose silicon valley you know all the amazon amazon facebook apple but they're all around a bay of water yeah uh. Okay. And so then, so that 5319 takes care of everything, taxes, subscriptions, advertising, insurance, merchant fees,

the whole thing. Yep. And then the owner pays himself 5,000 a month. Obviously that's a salary. They work 40 hours a week. They have 130 members. It looks like they have four people who are getting a free membership, probably for coaching.

Their ARM is 174. So that means that their group price is probably down around 130. Hey, is that something you would fix right away when someone signs up with a two brain, you look at their ARM. It's easier to fix ARM than anything else. yet. Okay. Yeah. We don't, we'd never raise rates right away. Like, because that can be catastrophic. Um,

if, if they're not actually providing a good service, right. Like if you've got the guy with the bad breath and like you're paying him one 50 a month, maybe you do think twice about the one 60 a month, but, um, yeah, ARM is really easy to fix. And then it's actually fairly easy to get new clients after that. How much money is he giving himself a month? 5,000? 5,000 even, yeah.

So that would take him to $16,661. Yeah. And he actually had a bit of money left over. So he spent half of it, like three three grand on equipment and he banked the other three grand for a rainy day so his revenue is 22.5 so he makes 60 000 a year yeah uh which is it's low i mean it's very low for oakland i mean if he wants his own apartment, it's going to be at least $3,000 a month. He's going to have to spend at least $36,000 a month on an apartment. But knowing these numbers, there's a lot of opportunity. So first off, if he's already got 130 clients a month, if he can raise his ARM by five bucks, I mean, that's whatever that works out to, right? Wow. Okay.

I mean, that's whenever that works out too, right? Wow. Okay. So $650 right there, you know, a month in profit. A month. Yeah. So another $7,000, $8,000 a year right there. That's just a $5 ARM increase. You know, there's a ton of opportunity there because his expenses are so low. If his expenses were higher, it wouldn't be an opportunity to be like desperation. He has to do this.

Come on, man. Sell a couple cans of FitAid. That's it. Yeah, anything. Five bucks per month. Yeah. Yeah. So basically, just so you guys know what I did, one of the things I did is I took this $16,661.

I divided it by – did you say he had 130 members? Yeah. Yeah. So I divided it by 130 members, and that's what I got. Sorry, $130 a month, and I got 128 members, which is basically what he has. He has 130 members. 128 members which is basically what he has uh he has um 130 members another thing this guy could do is he could increase his membership by 20 and get to that threshold of 150 that um two brain likes so much but then at that point his labor costs are also going to go up yeah up to a point and like at 150 you don't need a big space um when you start climbing higher than that your expenses really go up because you need more

space, more equipment, more staff. So it's not a lot of money to pay a gym owner who's running a full-time gym with a ton of people to go in there and pay $150 a month for the baseline membership. That's nothing for coaching. I mean, it seems high compared to a month for the baseline membership. That's nothing for coaching. I mean, it seems high compared to, um, an access gym, but that's not your business. You're selling coaching. Like I pay my cycling coach 300 a month and my nutrition coach 300 a month. Oh, Oh, you, so you personally, and how many times do, and how many times a week do you get to see your, um, cycling coach in your, uh, I get a text from her, the nutrition coach, on Sundays. And I get a video text lasting about 30 seconds from him on Mondays, the cycling coach.

And then they do my programming for me. And that is tremendous value because I can see my fitness improving. God, that makes me so happy. So this lady, I used a backdoor entrance to the tennis club, uh, several months ago, my wife and I walked into the back door because through the front door, they have, you have to fell every time I go there, I go to the tennis club four days a week with my kids and I'm not a member there. And every time you go there, you have to sign a release saying, if you get COVID there, um, that they're not responsible. This has been going on for three years. I have to put my

name, my phone number, the date, why I'm there there it's a fucking crazy form so i just sneak in the back gate fuck you and this lady this lady sees and i throw my kid over the fence right my kid climbs over the fence to come in the back door and this lady stops us and says um uh you're not a member here are you and i said no ma'am she goes i can tell'm like, but you know what I am. I spend sixteen hundred dollars a month here in tennis lessons for my kids and I subsidize your three hundred dollar a month membership here. Yeah. You ho. I didn't call you. I is for four days a month and that's 400 bucks. And then the jujitsu people are I mean, this shit gets crazy. Yeah. If you and private instruction is worth it.

It's made a world of difference for my kids. I cannot. People all the time give me credit for all this great parenting it's like hey dude my kids see i just find good coaches and i just kick back with my camera and make stuff for my instagram cool show drive a van i drive a sienna uh chris um number one um biggest uh uh mistake gym gym owner can make. Is there anything like you're just like, yeah, I just see this over and over. Like don't get the gym credit card or like, you know, like when you're on an assault bike and you want to quit and like you have to hear like I have this rule here three times before you quit.

Yeah. Is there like, hey, before you you buy something make sure you hear the voice fight of like avoid going to the rogue website five sorry bill avoid going to the rogue website more than uh when you've been drinking more than two uh schlitz you know or medellos like is there any i'll tell you the number one thing they could do because years ago on my you know two years into doing this daily blog somebody commented like these are cool stories of you screwing up and like, you're always telling us what not to do, but what should we actually do? Which is a thousand times harder, right?

And what every gym owner should be doing is every day before they do anything else, do one thing to grow their business. Like before you coach a class, before you work out yourself, before you have breakfast, you sit down for 25 to 35 minutes and you do one thing to grow your business. It doesn't matter what that thing is. If you don't know, like I've got books and we'll send you all kinds of free stuff to help you, but you have to be focused on growing your business ahead of, before you do anything else, because the rest of your day will just get filled. Every day, do one thing that pushes the growth of your business before you do anything else yep if not it just won't happen so if you have a podcast make one just sub clip if you have a coffee company reach out to just one more person to get your bags of coffee put in. If you're a gym member, call at least three old

clients and ask them how they're doing. Exactly. And you got it. Okay. Nailed it. All right. If you don't know what else to do, make media. Oh, that's kind of the default. Yeah. One day after adopting this rule for myself, I was like, what do I do? And I'm like, I'm just going to email a bunch of people in town. Who should I email? Other entrepreneurs. I made up a list on Yahoo. This would have been like 05 and spanned like 35 people and got a new client worth 900 bucks a month. Awesome. And then I was like, time to deadlift. But yeah, yeah,

yeah, yeah. Yeah. My, my go-to of shit's hitting the fan is get rich for owning on. Right. I wish I was, I wish I was joking,

but it's not, it's like, it's like, it's just crazy what it does for the podcast. You're in a slump. You're depressed. Have rich on shit. Everything gets better.

You have a great guest. You have fun. You got on. Shit, everything gets better. You have a great guest. You have fun. You got to meet Rich, and fucking money pours in. Yeah. Golden goose. If everything's going great and you got too many subscribers, you invite Chris Cooper on and tell him to bring a stretch. Right, right, right, right, right. I like that.

And I just want to do, bring up here, we talked about it earlier, but just to plug this for everybody here, this is the summit that we're referring to June 3rd, June 4th in Chicago. If you want to take, if you want to take your business to the next level in seriously, you should definitely attend this. What's going to be there. Hey,

that's in your hood, Hiller. That's what I just said. Whoa, whoa, whoa. I didn't know. Yeah.

So two brain summit.com and uh our cmo this morning said that it's 50 off for people who are watching this you just type in savon and the coupon code and you get your tickets dang i love it oh who's going to be there why would i go there what like other other affiliate other gym owners to like me? Yeah. 600 other gym owners. Um, Kalipa is going to be there. He's going to speak, uh, there's an owner stage and a coach's stage. He'll speak once on each stage. I'll speak on the owner's stage. Um, and then he's going to lead some workouts in the morning. We usually bring in like speakers either from my mentoring team or in years past, we brought in Jocko Willink, Seth Godin. Wow.

Yeah, some really high-level people. And it's just every year we try to figure out what do gyms need the most right now and provide that for them. So super, super high-value weekend. It's right in Rosemont, so the food and the entertainment is incredible. And yeah, we do it every year. Two things here a great way to increase uh arm sell a group membership with a personal training add-on many members get incredible results uh results with this uh hybrid membership meaning hey if you're gonna buy a monthly membership also for an extra

sixty dollars a month you get two one-on-one classes it's like some sort of deal yeah that would be a tremendous deal it's more likely an extra 80 a month you get one one-on-one session okay sorry my bad but yeah yeah that's okay dale dale king if you can buy the commercial property where your gym is located 10 or 15 later years later you have an asset yeah we did that that was the first building i bought this was the second um and so that's like a great retirement fund for gym owners too. Dale's right on. Dale's two for two so far.

Wad Zombie, how much are you paying Khalifa to speak? He only cost $25 on Cameo. Do you know what Cameo is, Chris? Yeah, a hockey legend sent me a birthday greeting because of Cameo this year. Oh my goodness. More than that is the answer, but not as much as a Jocko. Jocko is like 70,000 an hour.

Okay. Uh, Mr. Cooper, thank you very much. Thank you guys. Absolutely. Awesome. Having you on for three hours. Yeah. You're you're amazing. Uh, anyone, uh, there's tons of, uh, free resources at Two Brain Business. It's how Susie got his shit together. It is too late for Hiller. He has already died. But it's not too late for any of you guys.

It's never too early also. You don't need to be a gym owner. You can be a person who's just wanting to think that they opened a gym. You could be a current gym owner, or you could be someone who lost their gym and wants to get back in the game with some better tips. Can I make one more plug to benefit CrossFit Foundation? Please.

So we're working on this deal and I, I'm not sure I can announce the whole deal yet, but you can, you can, I give you, thank you. I need to clear this with the CrossFit Foundation first, but all of our- Yeah, you can. You can. You can. I give you. Thank you. I need to clear this with the CrossFit Foundation first, but all of our book royalties, past and present, are now getting donated. And our goal right now is to work out this deal with

the CrossFit Foundation so that they go there. We've always donated them, but now there's this amazing package that's coming together to help kids in schools, um, do CrossFit. Oh, wow. Yeah. That's amazing. Oh, okay. Oh, let me ask you this. So you de-affiliated and now you've re-affiliated? Yeah. So my CrossFit catalyst was an affiliate from 08 through 2021. There's my fax machine again. Yep. And, um, when I got involved with some of the apn

i mean i was close to de-affiliating anyway but when i got involved in some of the apn talks i had this kind of bolt of insight that like okay you know i'm really i'm not willing to keep doing this for the benefit of berkshire partners and so when L one expired, I just didn't renew it. And so CrossFit Catalyst went with my L one. Um, but now we've just recently re-signed as CrossFit Brain again, because somebody else, a new affiliate came in and scooped CrossFit Catalyst, which I think is the best affiliate name of all time, but I'm still super pumped that they got it because they're a two brain gym. And so let me ask, so are you, so you saw something that canceled out your thoughts about making,

giving money to Berkshire. You saw something that made you want to be back part of the family. I, yeah. I mean, I've got, I have a relationship with HQ that not many people have. It's a decades long conversation about business. You were there, thank you for most of it. And when I was sitting in Greg's kitchen in 2018 or whatever, interviewing him, I said, why would I, why should somebody keep paying affiliation? And I wasn't even thinking of de-affiliating or anything. I just asked the question. And he said, because if I was using

somebody, something that another person had invented, I would want to pay them for that. And I said, that's a good enough reason for me. Greg got paid by Berkshire. And so when we were approached to be in the APN, that conversation, um, didn't was discouraging. And so, uh, and I know, you know, Castro's talked to me about this too. He was also discouraged by the APN conversation. Um, I said at that time, like, this just doesn't seem to be going in the direction that I need to be going right now. And you know, my gym either. But again, like that's a very unique situation. And if I was any other affiliate, I wouldn't base the decision off what Catalyst does. Okay. But but but something has happened to where you have uh reinvigorated and by the way we ask every gym why are you affiliated oh yeah and i think like um i want

to say 10 out of 10 but they're 20 out of 20 they all say basically because i'm using they're not because it's it's not for a superficial reason it's for this abstract ethical value reason like hey i'm a gym because yeah uh because i i it's i have to pay it i i wouldn't sit well with me to use the methodology and call it h-i-i-t or or functional fitness because it's just not what it is yeah but they're not saying it's because they get free cookies at christmas time there's no you know what i mean there's no superficial reason they're doing it so it's interesting right yeah so i mean it's kind of like a brand loyalty payment it's really weird it's a weird thing in the business world i don't think the people at berkshire know that to be honest with you i don't think they can get their heads wrapped around that yeah i mean this is not

because it's not business it's it's more like church yeah that's right except you can go start your own church anytime and run it any way you want, as long as the Pope makes a couple of bucks. Right. Right. This is a very long conversation, but, um, the good news is that when Austin Maliolo told me that I couldn't have CrossFit catalyst back, um, so on, you were actually part of this years ago when Greg was doing, um, CrossFit for brains, he and I made, uh, we had a long conversation. You were there. Uh, it was you, me and Jeff Kane, uh, who I know was like your best friend at the time. You guys were probably rooming together. And, uh, we had this conversation in the, at the Hilton, uh, when the games were still in Aromas about it. And so we were going to be the affiliate of CrossFit Brain and produce like a daily brain wad for kids and chess puzzles and

stuff. And it was all tied into that chess master out of New York City too, or St. Louis. That's right. Wow. You have a good memory. Well, I had a good memory because it really pissed me off. But so we launched this thing, we produced the site and the brand and all this stuff and we signed people up for the first crossfit brain seminar we were in an airport on our way to teach it and kathy glassman called me and said we changed our mind so i lost that we would have never have done that to you chris they used to call that tuesday but anyway um i don't get that explain that to me when he gets off there suze i don't get that joke it happened a lot oh yes yes that's a standard operating procedure you didn't get that are you kidding no i didn't get that but you're not you're new here yeah but

you're not lying chris you're not lying but but the beautiful and you know it was never greg that did it uh but anyway the beautiful part is that- It was his company. I love Greg, don't get me wrong, but it still was his company. He still is, at the end of the day, the buck stopped with him. There were many, many, many instances of,

Coop, man, just dying to catch up, man. How's the family? And then you'd get on the call and 30 seconds in, it would be like, stop doing this, stop saying this. Like it was an ambush every time. And so even when i met rosa i had like you know severe ptsd caution about yeah um but but don't probably good yeah don is not like that so all right buddy i love it very positive very positive show not like our regular shows great job that was my goal thank you guys

really thank you very honored to be here take a talk to you soon look forward to the next time you come on dude great thank you bye oh he's gone i bet he had to pee i'm gonna bet a thousand bucks he had to pee who wants to take me up on it there's no way anyway you don't pay me enough i'm just kidding or he didn't pee or he went to go pick up his kids the latter he seemed to rush out yeah we we would it seemed like you kicked him out all right well eventually i did we we man we did some crazy shit to people oh you're talking about the hq shit yeah you would see us do that shit to people all the time why is that

I don't know but it didn't have to be dysfunctional I'd made the 2009 CrossFit Games documentary and it was supposed to be a DVD that was released and I was supposed to get a cut of the proceeds right because I'd been working free in 2007 and that's the way we did it in 2008 with every second counts and after finishing the entire doc they decided no we're

not going to do that after working on it for 16 hours a day for five i mean that should happen to everyone not just uh it was crazy there was a crazy email exchange between me dave greg lauren tony i think mike workington was it. There were some all sorts of tribute people on the email. It was a crazy battle over that. There were some nasty things said. And then we all were friends again. Like what? I can't even tell you.

It's so bad. It's so bad. Like schoolyard fighting shit. Like your mama. You're kidding. Yeah, dude. Yeah. Go ahead, Susanan how often do you guys meet like everybody together in the same room at hq yeah just in general like the people that

worked for you the people that you worked for the executive team the media team like how often was there meetings like the entire company i'm not sure I understand the question. Not like in all hands, but how often did you go into a room and sit down with your coworkers and meet? Caleb, you've got to move that mic a little further away. All I can do is hear you breathe. Sorry. How often did you guys meet? How often did you hold meetings? How often did the executives meet?

Once a week? Once a week? Once a quarter? I don't even know. i don't even know no no i don't even know see that's that to me would would be the issue i don't know i got part of me wants to be like every week and then i but i'm afraid someone might be like no you only met once a month or you only met once a year i don't know we did a lot of stuff together yeah but i mean i was always with greg once we went over a certain point like 2010 i was always with Greg. Once we went over a certain point, like 2010, I was always with Greg. So for me, it was like, it was every day.

Yeah. But I was just referring to the organization, sitting down, huddling up, making sure all rowers are rowing in the same direction, making sure that there's an established culture, a way you guys interact, a standard that you're holding, values that you're holding, how you approach other people, relationships, like those types of meetings. Uh, that every single meeting we had was basically one thing. how you approach other people, relationships, like those type of meetings. Every single meeting we had was basically one thing. It was no matter who it was with, it was Greg just telling you the vision of the company.

Well, that's his job, right? Yeah, and it was nonstop him telling you the vision, non-fucking-stop for anyone. Like he would just walk through the hallway and stop and talk to someone and tell them, you know, that's all he, I mean, it's all he did for 10 years. Tell you the vision of the company. Yeah. And for the gym owners that are still listening, I think it's also important that you guys adopt that role too. And always talk about where your affiliates going, what the next thing you're going to be doing, what the vision of your gym is and stuff like that, because that definitely creates a lot of energy and forward momentum. And people like to be a part of a cause and serve something bigger than them. So greg went around and he was you know going over that vision going over that vision what he was also doing is kind of laying the path

forward for people to be really feel attached to that that purpose of that vision and what why we got all disciples that worked at hq like everybody which is and then after a certain point people wanted some other shit too that kind of falls in that category but that necessarily wasn't done. So people would be like – after working there three years, they'd be like, so what does my path look like to grow in the company? You know what I mean? They wanted to know, and that wasn't something we did. Right. It was – that wasn't something we did.

Yeah. And that also isn't – That wasn't laid out. It was just vision, vision, vision, vision, vision. It wasn't – it didn't fall into it. There was zero corporate shit, zero and into a point almost made as dysfunctional. Yeah, exactly. Cause you need a certain amount of that organization to keep everybody on the

same sheet of music and to keep growing in the same direction. That was great having Chris on. So good. All the information i do i did yeah what'd you say hillar i've always known i've liked him i've listened to him talk a handful of times i have a i have a former coach who opened an affiliate in michigan almost exclusively using the two brain business website yeah i mean that's what i did a lot of people were asking if i had uses almost exclusively using the Two Brain Business website. Yeah, I mean, that's what I did.

A lot of people were asking if I had used his service and not directly. I never, I mean, at that time, I couldn't even afford to pay attention, let alone pay anybody else, right? So I was just gathering all the free information I possibly can off of his website. I bought all the books. A lot of material in the books would reference other books or reference stuff that he got it from. Like he named Seth Godin, who's like the marketing guru. So then I'd go buy that book. And then, so you start to just follow the path of, of education by using his books to start and then to continue to further down that, that road.

Did we hear from, um, did we hear from, uh, Dar darian not on the evening portion of that yet uh i want to tell you guys some things that we have coming up um tomorrow morning we have raw of earth uh coming on uh be a pretty free-flowing conversation also known as ronnie Teasdale then tomorrow evening I'm hoping to do a show with Darian Weeks about the UFC on a big big big big big UFC fight on

Saturday Alexander Volkanovsky and then also a guest of the show will be fighting for the interim title Josh Emmett which is pretty cool so it wasn't until Friday. Tomorrow's not Friday? Tomorrow's Thursday. Oh, well, shit. What's tomorrow then?

Paul Cole. Oh, Paul Cole. God, I'm sorry, Paul. I'm sorry, Paul. I'm sorry, Paul. Yeah, I'm sorry, Paul. That works, right? Sorry, Paul Cole. Tomorrow, we have the greatest white squash player alive today

i don't know if he's white new zealand people wait i don't know what they are over there but anyway that'll be cool to have him on uh i also believe he uh he might be a crossfitter i didn't know that at the time i invited him. Oh, really? That'll be cool. Yeah. And then on Friday, we have a raw on. And then on Saturday, we're doing. Thank you, Caleb. Then on Saturday, it looks like we have affiliate series in the morning. Yep.

Kristen and Leon. Oh, two affiliate owners. Husband and wife. Nice. That's cool. And she works in health care, too. This will be a good one. This is the one that I sent you all back and we're like yeah let's get her uh sunday we have on thank you uh sunday we have a craig harrison on at 7 a.m you have to read that book download that

audio book right now is dave happening tomorrow maybe that's a good question i'll call him right after to be determined but you guys got to realize that Dave's doing a lot. He's traveling a lot, so we're kind of always evolving with his schedule. All these shows that we talked about are happening. Well, I think that's mostly been my fault, the Dave thing. Oh, we just haven't pinned him down? This time, yeah. Because I was trying to set up that studio back there and get the cameras.

Yeah. Yeah, this one's – because I was trying to set up that studio back there and get the cameras and – Yeah, yeah. So Craig Harrison, I think the name of the book is The Longest Shot. Longest Kill. The Longest Kill, Craig Harrison. Get that audiobook and start listening to it. You're going to want to have heard some of that when this guest comes on. This is going to be a once – this is like a once-in-a-lifetime opportunity to kind of interact and meet a guy like this. once this is like a once in a lifetime opportunity to kind of interact and meet a guy like this this is not uh i don't want to rip on other like army guys in our world but this this what this guy has

done is not the number of people he's he has uh extinguished their life is uh he does no one knows and if you read the book you will will be – you're going to trip. Then on Monday, we have the top 100 men in CrossFit with Brian Friend on Monday. And it looks like we're – is the open coming? Well, so that first one on the 14th you're referring to, what is happening right now? The first one on the 14th that you're referring to, and I think you guys are going to really like this. We're going to have an open series where we'll basically troll the leaderboard, talk about what's happening with Brian friend in, uh, J.R. Howell. Um, and that'll start on the 14th where, um,

they'll just kind of go over some predictions. Is there going to be some themes? What's the open going to look like? Um, with, uh, Bosman in charge of it. And how will that be? You know, what's the first day of the open? The 16th. It'll be Thursday the 16th. Grace's birthday. So that's 135 plus 100 pounds? That's 235

right there. Wow. Yeah. 235. Like it's nothing. Easy. Eric Weiss, three hours into the audio book. Dude had a crazy upbringing. Hey, are you glad?

Are you glad you're listening to it? I thought the reading of it was brilliant, too. I was so bummed when it was over. Pardon me? What's the book? This guy's just story from becoming just a kid in a fucked up abusive household to becoming, I don't know. A badass sniper? I don't know how, yeah, a total badass sniper.

But even before he was a badass sniper, he had some crazy jobs in the military. I don't know what they're called. Yeah, there it is, the longest kill. He was on a boxing team. He just fought people. Yeah kill he was on a boxing team he just fought people yeah he was a he was a he went he was a collector he went to the french foreign legion he talks about just being he led his i don't know what you call it a platoon but he was in charge of a lot of dudes and basically he would just sit there with that gun and and dig a hole and put his dick in the

dirt and pee and shit right there and sit there and just kill people for 48 hours straight. Sleep and kill. And it is, yeah, the narrator is awesome, right? I mean, you could just listen. It's so incredible. I'm a badass super secret sniper. You drunk. Trish, go pick up a Bella bar.

I meant to answer that earlier. She wanted to know which barbell to get off the rogue website. It'll last 10 years. It'll last forever. I dig a hole and do that, and everyone is worried he doesn't. He's a hero. I don't even know if this guy's a hero. I mean, I don't know what you call him.

But he's an amazing human being. The fact that he's alive and we can hear his story is amazing. The way people have treated him since he's come back from the war is absolutely disgusting. All right. Three hour, Mike. Yeah, that's nice. This is the third day in a row of these you've been doing three hours i don't even have to pee that bad you think we can do like a 24 hour one anytime soon wow well i know that we've kicked the idea around of doing a 12 hour one i know that that's where the stream shuts off so it'd have to be two separate ones. Yeah, he's good at it. That guy is good at his job.

Whatever his job is, that guy, Craig Harrison, is like the best in the world at it. We'll ask him what his job is. I thought a 24-hour show would be nuts. Can you do that with StreamYard and YouTube? Do they have any time limits? It's a 12-hour limit, so you have to do two separate. Oh, you just said that.

Sorry. I got an even better idea. What if we took that same 24 hours, we went on here not live, and then we just cut clips? There you go. Better time allegation for growth. It's so much more boring. Just sitting here staring at each other for 24 hours.

We'd find out stuff to do. We would just, I don't know, we'd watch the lord of the rings extended trilogy we could watch morning chalk up and in real time continue to deteriorate did she just leave too oh she's with hwpo now she just she just announced it yeah someone just sent that to me so presley's out too wait the morning chalk up the redheaded morning chalk up girl yep i mean i called it because i mean her and lauren and katie gay and like that that was the team that was what was holding it together after like the

brian and patrick clark exodus and stuff like that and once i saw that lauren was was leaving with them you it was only a matter of time before the rest of that team folds and is she doing media for them she's part of their media team i would assume she's probably media team she probably do some writing she might be doing some social media management um i mean she also does a party like all three of those girls are are really talented so they could wear multiple hats within some sort of media thing like that so who knows what roles we'll see them in i'm sure they're going to do fantastic in any role that they get placed in but hey hillar i was at this i was at this party in college and i um it was it was a crazy like ecstasy party and i wasn't on ecstasy and but everyone else there

was high as fuck and i and i was walking by i was just walking by in the street and i saw the party going on in this house and i saw this girl that i really really liked that i saw around campus all the time and so i walk in the house and i start talking to her and she's like just being crazy affectionate with me, physically affectionate. And she's like, hey, do you want to walk with me back to my house? And I'm like, sure. And she's like, and i don't want to just come in and just bang you like i really could i get your phone number and like or could we just keep walking or hang out and she's like okay here's my phone number and yeah let's hang out sometime and i said okay and then she's like all right good night and she went inside dumbest fucking thing i ever did so when i hear susan when i hear susan say when i that bitch fucking ignored me for the next three years and i was fucking like heartbroken over it when when uh

when i when i hear susan say let's make clips instead of uh do the 12-hour show that's what i hear i hear like susan's like let's not fuck this girl tonight let's make clips live yeah yeah like susan's gonna make it so we don't fucking get to see the titties of the hottest chick we've ever like some chick we're in love with it's gonna like no i'm just i got i got one of those in my memory i didn't freeze up i didn't freeze up i really wanted to have a relationship with this girl and i fucking like i'm an idiot i'm an idiot i did like i like i watched too much cosby show or something like i forgot like that shit's not real life yeah i didn't even um i don't know if it's a good metaphor i just wanted to tell the story oh okay i was i was trying to like figure out how that applied but i just it just sounds

fun to just do a show for 24 hours with uh you and hillar and caleb and like and line up like 30 guests to come on just have a parade in and yeah. Savon-a-thon. Yes. Holy hell. That's genius. And we would just need to start promoting it. So you guys have to post your Instagram a little bit.

It would be a 27 hour show. Not bad. I'll take it. I'll take it. Dude. I love it. Bruce is in. I'm down down uh hey what if we had what if we did a show with um well presley can't come now because uh she's hwpo and they're scared to come on the show

but but what if um what if we did a show with lauren and brian and patrick and just talked about the exit we call about the exodus of the morning chalk up. And Bruce, the thumbnail could be the ark. And it could be me standing with a staff and it shows like Brian.

I'm like Noah. And it shows them like walking onto the boat during the flood, leaving the morning jog up. What do you think? Oh shit. That's awesome. That's awesome. Okay guys.

Thank you everyone. 24 hours until your face rots off. You could have Emily back on. Sure. Yeah. I could have, I could have Emily back on. Okay.

I'll see you guys uh soon caleb is there anything you want to say no