The Sevan Podcast - BREAKING NEWS | CrossFit Raises Fees | World Wide Reaction

Episode Date: December 1, 2023

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Welcome, everyone. Thank you for tuning in to the CrossFit All Hands meeting. The 600 of you that are tuning in live, the 540 affiliates and the 60 people working at CrossFit HQ. Welcome to the podcast. Josh Honeycutt here with us, a new species, CrossFit, Matthew Souza. In all transparency, I do have a relationship with CrossFit. I worked there for 15 years, maybe longer. And at a very senior position, there are people there that I am in contact with. I have a healthy relationship with, in my opinion, with Dave Castro, Don Fall, to name a couple of people at the top, and then several people throughout the company. to name a couple of people at the top and then several people throughout the company.

I say that to you in full disclosure so that you know that I'm not interested in burning those relationships so you know where I'm coming from. As I scour the Internet in the past two hours since the announcement has been made, I'm seeing tons and tons of propaganda. I will not give you propaganda, but I will bite my tongue occasionally where I might otherwise express my opinion because I do want to stay in the uh good graces uh with crossfit hq so i want to really be clear about that in my um uh in in my approach to you it's it's it's the same thing that i'm guessing i'm josh uh honeycutt owner of new species crossfit would also say on one hand like you don't want to get so mad at the mothership not that he wants is concerned about damaging the relationship but you don't want to you don't want to shit where you eat you don't want to damage the mothership that that's part of these uh you don't you don't want the octopus throwing rocks at the fucking head we don't we don't want that uh matthew souza um uh 10-year uh affiliate uh crossfit livermore in california um josh where's your where's you're in detroit

we're right outside of detroit in royal oak michigan okay so someone in the middle of the united states and someone on the west coast united states most of this discussion will be stuff that we will either show you or read to you and then we'll hear um sort of we'll get sort of josh's and matt's response but first i just, um, if you could walk me through Josh, your risk, first of all, did you have any idea that this was coming? Not until a couple of homies started texting me today about it. Absolutely. I mean, I could see it coming. I didn't know if they would jump off on because grandfathering has always been a part of it. So I didn't know if they were, I didn't know how they would do it. I didn't know if they're like, Hey, we're adding 500 to everyone's

or if they were just going to take everyone up to a hard number. But I'm, I, my previous affiliate fee was 2k a year. So it's like a 125% jump for me, you know? So it's like, let me throw this out there really quick. So Josh already pointed one thing. Some of the propaganda that I've been seeing is, Hey, if you didn't see this coming, you're a fucking idiot. Basically I want to tell you those people who are saying that that's propaganda. That's bullying. That's to make you feel bad. If you're an affiliate,

you should have your head down and you should be coaching. You should not be wondering about what the fucking mothership is doing. That should not be your concern. It should be a trust. And so as soon as you see something like that, please know that that's propaganda. Anyone who's saying, like, you should have seen this was coming

or they have any presuppositions that are kind of making, putting it off on you. It's not on you. You didn't make this decision. Okay, go ahead, Josh. Honestly, I wouldn't have seen it if someone hadn't spoken to me about it. And when I was, when I was working with CrossFit as an affiliate rep,

there were a lot of people that were like, what, even after when the whole thing popped off with Greg, like there were so many affiliates that were like, what, what happened? You know, it's because they're doing exactly what you just said, Siobhan. We're like, I teach all 10 of my classes on Monday. I don't have time to check my email. You know what I'm saying? And that's what we're doing. We're out here doing the work that we're just supposed to be doing. And that's always worked out for us in the past. But now there seems to be a lot more moving, many more moving parts behind the curtain. 13,000 gyms, at least six continents. Affiliate fees normally in the park range of $500 to $3,000 a year for everyone worldwide. Notice went out today that affiliate fees will be going up from $3,000 a year to $4,500 a year for most affiliates.

The countries that have dirt runways will have different are, I guess that have dirt runways will have different prices than the ones that have concrete runways. Is it, in my opinion, my opinion, is it a big deal that CrossFit HQ wants to make more money? No, I'm glad they want to make more money. Leadership from the top, make more money, lets everyone make more money. I don't have an issue. If the raise affiliate price raise were $1,500 in a vacuum, more to be added to that later. Susie, you are on the pulse because of this podcast. You did know, you did know we've been hearing about it for six months, right? You did. Yeah. We've been, we've been hearing rumblings here, rumors here and there. So like I was aware of it. Yeah. Coming down the pipeline and we knew we, they had to do something

at some point to increase revenue. Right. We never never we didn't know what it was. Speculation like franchising. Like there's all these different theories out there. And I think at the back of our minds, we all knew just like as affiliate owners. Well, there's one way to do it. We just increase the price of the people who are currently buying from us. uh judy reed canada sixty five hundred dollars good point judy so the money that i'm talking about the 4500 from 3,000 4500 is um uh greenbacks american money right the u.s dollar uh jay neely uh not an affiliate owner ride or die crossfit and here comes but the 4500 this may sink quite a few boxes. Your immediate reaction, Josh, as you read this four-page email that came out, what did you think? How long have you been with your affiliate? Well, this is our sweet 16 this year. Okay, 16 years.

16 years. We're still the least expensive box in town, to my knowledge. So I'm attached to that, and I fight for it, and I advocate for it. So I'm attached to that and I fight for it and I advocate for it. So for me being as loyalty based as I am, like it feels a little bit like a slap in the face, but more if I take the emotion out of it, it's corporate now, bro. It's corporate. Corporate has one job to make more money than they did last year.

It's the reason I got out of the YMCA fitness director gig. Cause they got too corporate on me. I did 185% of budget one year. The next year they're like, all right, well, let's do 187. And so all my bonus potential disappeared, et cetera, but it doesn't matter. This is what gets me. So I was doing a little quick, stupid hillbilly hood rat math today. All right. Let's say there's only 10,000 affiliates in the world. Let's say the mean is 2000. All right. That's 20 million a year. I checked with Siri to make sure my math was right. All right. That's 20 million a year. What the fuck are they? What what more do they need to run with? How big is the office staff? Like but the thing is, when it's corporate, that won't 20 20 mil won't be enough.

Twenty one won't be enough. It's always got to be more and more and more. And then they'll sell it to somebody and then they'll want it to be more, more, more. That's just that's how corporate operates. I don't know if that's exactly the path we're going to follow. But it's eerily similar to some shit I've experienced in the past in the fitness world. They own it. Someone owns it. Somebody does. They have the prerogative to do whatever the fuck they want. It's theirs. You're on their train. So, Susan, one second for you jump in here so josh i'm projecting on you that it's okay that hq makes more money but are you

really not okay with that no i want them to make more money i want them to add more affiliates i want i want them to keep reaching out and find more places that need more affiliates so we can get these lifeboats everywhere not charge more per square foot at the boxes that exist. Somebody figured out how much the mean income for most box owners was. And I think it was like 34 to 36,000 or something. 4,500 is a big chunk of that, dude. It is. Percentage-wise, we are very, very blessed. I'm very very fortunate we have a great location and we've been a very successful box i think most would consider you know and i give forces bigger than me credit for that but it's but i don't think we're the

norm you know we can absorb that we can do this or do that or whatever and figure it out it's not going to sink us and crossfit is so valuable just so valuable. Man, if there was a word that was that fucking cool that really said it all like CrossFit does, but Greg's so fucking smart, he nailed it, knocked it out of the park the first time. So there's so much value in the term CrossFit, but there are going to be some of those affiliate owners that are doing the $34,000 to $36,000 a year that that might be too much of a bite for them. Josh brings up more propaganda that I saw on the internet. I saw someone say, hey, it's not a big deal.

You just have to change your budgeting. And when I hear change your budgeting, what I hear is like, oh, you wear clean underwear seven days a week? All you got to do is just wear it five days a week. Not a problem. Just do the wash list. Azusa, your thoughts, immediate thoughts, like as you saw this four page come down, the talk about how you need your L2 within a year, rates are going to go up. There's a $500 application fee for first time affiliates on top of the $4,500.

What was your immediate thought? That CrossFit is choosing the type of customer they want. I think this is a filter. I think this might be a response to, hey, we need better quality coaching. We want to see operational standards across the board. And the best way to do that is just to increase the price in the ones that maybe weren't operating to a certain standard or threshold

that CrossFit wants now will fall off. Those ones won't be able to afford it. So I think it's just a question of, immediately it came to my mind was, hey, they're just picking their customer and choosing their customer with the first layer of price being the buried entry. So you're saying – what you're saying is they don't want to sell generic shirts anymore. They want name brand shirts. They want to move to a different street.

You're saying this kind of like fits in with what you would they want to be the um uh gucci of fitness they're basically they want to get they want to get rid of their walmarts and they want to play a game yeah i mean they're you heard on purpose to get rid of the shit gyms the small gyms they want a higher evaluation i was talking to um uh man much smarter than me earlier Craig over at Diablo and he's like man he's like business-wise that now they get a few strong gems and they base the eval on that the evaluation of the company immediately goes way way up you know when they have oh well look this gem is doing this much this gem is doing this much and they eliminate some of the ones that weren't doing as much now the evaluation of the company goes up and now it's an easier sell. Yeah. And I think customers, would you, I mean, do you want the, do you want the rich guy or do you want the one

who's looking for a discount? I want the rich guy. So does CrossFit. Okay. On Spin Show, there was a guy on there. I forget his name. He said he owns five gyms. And I think he agreed with you, Sousa. He said that this is a way of making the gyms more professionalized and less hobbyist. Yeah, that's a good way to put it, because all the people who are doing this with a nine to five, with a lot of other full time job obligations, it's basically going to raise the barrier to entry too much price wise for them to pursue it. Let me read you some DMs that I got. I never wanted to open. This is today when we put out a calling for messages from the community, from affiliate owners.

This one says, I never wanted to open a gym. I wanted to open a CrossFit affiliate. It's a six year garage gym affiliate, and I cannot afford the rate increase. So unless some miracle happens 2024 march of 2024 i will no longer be an affiliate i hate that this has to happen so you're saying that that they're not dumb at hq they know they've they that someone maybe ran some analysis they're like okay we have 800 garage gyms those are toast yeah and they're also balancing how many people are going to stay.

What does that revenue increase look like versus how many people are going to leave when we lose that revenue altogether? Right? And the people that are paying like the $500 or the $1,000, they're not a significant impact on revenue. So if they leave, it's not going to be the hugest deal for them. Right? And for everybody else that stays,

they'll mask it out. So I'm sure somebody in there, at least I hope they did some sort of analysis where, Hey, how many of these people are going to push out? Are they pushing out the right people? And then how many people are going to stay? What does that revenue increase look like for the ones that stay? Why I didn't run the numbers, but off the top of your head, there's a, there's a hundred DMs that I read already go, no hyperbole that that say this is a slap in the face to the OGs. Not even the OGs, just anyone. I took it as just people who've had gyms for years. And obviously that's an emotional response and an entitled response. And I don't mean that in a negative or derogatory way.

I would have that response also. I feel the same way for sure. Why not do what they did the last time i think that uh when i was there we increased affiliate fees why not grandfather everybody in we know that there's a pretty high turnover rate so we know that they're going to get always get a lot of new gyms why not grandfather everyone in be very nice to to the base then also give the next year for affiliates to come in at the 3 000 rate so you have this flood of people apply to raise to raise revenue and then uh and and then and then and then

jump it to um uh six thousand dollars because if they here's the thing the i think that the current gym owners will have an enormous toleration for affiliate fees going to $10,000 because it adds value to them. Do you know what I'm saying? Instead of taking $1,500 to them, you're like, fuck, I got this thing. They'll think twice before de-affiliating now. Because shit, back in, that thing will be $10,000. You're still running the numbers just immediately. Do you see any problems with that, anyone?

I think it'd be 10,000 running the numbers just immediately. Do you see any problems with that? Anyone? No, but I just also feel like logistically and the resources that might take to manage that isn't necessarily worth it. They might as well just rip the bandit all off at one time and then tighten organize their books because in terms of, and I,

again, I don't have any internal knowledge of this, but if you have a bunch of different revenue streams and a bunch of different people, now we need individuals to manage all of those price hikes. We need individuals that are going to reach out to do that. That's going to take more resources on my end to fulfill all those different levels of pricing, as opposed to me just saying, it's done. Here's the price.

You're either in or you're out. So my body does, for us, for example, like I said, we've upped rates twice. I don't have to think about it. I couldn't tell you which one of my members are at the 150 rate unless I went and looked at it. So if there's some sort of pretty simply available software system to somewhat manage that, it's kind of easy, to be honest. So like I said, I'm one of the big proponents for grandfathering. I learned what I needed to know about my feelings on this aspect of business from cell phone companies when I was in college. All right. They would always give the newest, hottest phones to

new motherfuckers coming in. All right. Well, bitch, I've been paying you for five years. I want the newest, hottest phone at a discount too, you know, and almost every time I call up and fight for it, they give it to me. But that showed me right there that I was just always going to be the one that grandfathered. I still, I have a personal training client still pays me 50 an hour. You know, our rates are almost a hundred now. If you do grandfather in, you don't accomplish what Sousa was saying by getting rid of all the fucking

just shitty mom and pop gyms out there that are in 800 square feet that like have 40 clients and only teach three classes a day and you get rid of all them and i use the word shitty i'm being facetious by the way no one take that to heart uh more propaganda i will show you more propaganda be very careful how you see this sorry mike alpin that you have to get run over by the bus here 125 a month for the ones that were already paying $3,000 a year. I understand what Mike Halpin's saying, but when you compare ounces to pounds, you're doing that to be manipulative. Let's be transparent about it. Let's be transparent about it. It's $3,000 a year. And to make up this $4,500, if you pick up one extra client in your box a year it covers it quit being a pussy you could say that i get that just just one extra client it's cool dude quit being a douche um do you do

you like the idea of maybe fewer boxes do you uh josh you have a big successful high quality box do you like do you like this idea that suze is saying where we get rid of some of the the the like do you like this idea that suze is saying where we get rid of some of the the the once again i'm being a little facetious or uh uh hyperbole the riffraff i have mixed feelings on it but at my base it comes down to like for me i feel like bad crossfit is better than no crossfit you know and i feel like it's still getting the message out there and it might be somebody too intimidated to walk in my box with skulls and dragons and fucking wolves on the wall. They might be more comfortable at a mom and pop shop. You know,

it might just be friends in a neighborhood and they just loved CrossFit and what Greg had brought so much that they wanted to pay dues, you know, that they could have just done it on their own. So I think, I don't know, man. I, when I, when we first opened, we were about three, one of three boxes in Metro Detroit. At one point, there were like 50 in Metro Detroit. There was a bunch of us. There was a whole bunch of us.

And now we're on the other side of that where a lot of boxes are dying. And it's less comfortable. Honestly, I liked having somebody to compete with down the street. I feel like I was a little bit competing with down the street. I liked talking about seeing all the other boxes show up in comps and stuff. And some of these boxes we started with just aren't here anymore. So the riffraff will take care of itself on a long enough timeline. It will, whether it's 2,000 or 4,500 or whatever, because I'll just get tired of working.

Because this shit, ultimately, it becomes work. You've got to really love some motherfuckers to get up every morning and keep doing it year after year after year. So I've seen it take care of itself without a hike in affiliate fees. I guess I could say. Uh, 13,000 gyms. Uh, let's say each gym has five people with a mouth that they can't keep shut. That takes us to a 65,000 people are going to have opinions on this subject. CrossFit HQ knew this basically rattles the hordes nest.

CrossFit HQ went up to the beehive. They know it. I don't mean this in any negative way. They did something and they told all the bees to come and all the bees have come out and been like, what the fuck? It's not an easy position, I'm sure, for Dawnfall. He just got the new affiliate director

Dukun's in and now they're making this decision uh not an easy decision but also all of you have a right to have an opinion all of you who make money around this and by no means should you hold your opinion back and you should if you give a shit you should write an email uh try to be as calm as you can and as factual as you can and send it to them at HQ. Let them know what you want. Hey, this is tough for me. Let's give you a hypothetical. This is don't plagiarize my shit. This is tough for me. I'm an OG. I'm offended because I want to be grandfathered and I like that familial feel. But in the meantime, I'm going to stay with you. But I expect to see some results in five months.

And basically I plagiarize that from someone. Someone's like, hey, my fees aren't due for five months, but I'm going to be watching closely. Carla Cueva, 10-year owner here. Congrats, brother. Try not to make a rash emotional decision. Smart. Make it make sense, Sevan. People want to make money, brother. They bought it, and

they want to make money. Fuck, being rich is fun as shit. Calm me down. I'm not sure what to think. I survived the lockdown. I was able to make money. Fuck, being rich is fun as shit. Calm me down. I'm not sure what to think. I mean, I survived the lockdown. I was able to stay open. I am stubborn. Sousa, do you have any words for Mr. Carlos?

Yeah, I mean, I think we're all just kind of in the wait and see mode. But the question is, they've increased the barrier to entry in. Now, is this a quality control play or is this actually a revenue play? That's kind of the question that we're going back and forth in a little bit. Right. So play or a quality of assurance move. Yeah. Like, yeah, yeah, exactly.

I mean, it could be a little bit of both, but obviously they have to know that something like this is going to create a big media storm. There's going to be a lot of angry people a lot of emotional reaction to it um so the sequencing of everything is something that i'm concerned about because we have timing has always been stuff which is that the new cmo so you're already shaking a little bit of faith there especially with your base your og crowd let's call it and then to come right on the back end of that with the affiliate hike, I would say they definitely should have been more thoughtful about the sequence of that. But again, I don't think it's going to... I don't know if... Do you think it'll make a change in revenue? Look, if you have 2000 gyms that aren't going to be able to make the quota financially,

you have another 2000 gyms that are pissed off, you lose 4000 gyms there right um is that gonna harm them enough with this new increase so that's the thing that i'm super curious about it would take a little bit of like math to figure that out um but i do like i do like your um evaluation that they're trying to change the outside perception of crossfit um there was another um there's a lot of people out there that saying that the level two thing's not a big deal. You should have your level two anyway. The part about that I'm struggling with that I completely disagree with is this is a low business to barrier, a low barrier to a business entry. You're changing that. I think that's a mistake because we already know that most

of the people coming in here are doing it because they're crazy passionate. And the other thing is, is we do an affiliate series here. People tell us all the time I was a kinesiology major or I was a sports science major. And I learned more in those two days at my CrossFit level one than I learned in my four years at blah, blah, blah. And, and these are, these are strength and conditioning coaches, et cetera. And so I – it's interesting. Supposedly you get a five – according to them, you get a $500 voucher to apply to your level two. What if you already have your level two? Do we have an answer to that? I'm assuming CrossFit will come out with an answer for that.

Then you're good to go, right? You have it. Yeah, but then you don't get the benefit of that $ oh okay i wonder interesting um i i couldn't imagine them being that petty on that i'm sure they're just gonna whoever renews in 2024 at the new rate is gonna have that to hold on to and use how they see fit for level two or up. I mean, surely. Do you guys have your level twos? I actually don't. I do. Yeah. And so, so now you're going to go do it. So now you're going to go do it.

I plan to anyway. I have, I was a real big certification guy early on. I very, very much believe in the CrossFit education system. I think it's second to none in the world. Absolutely. I've got the nutrition. I've it's second to none in the world, absolutely. I've got the nutrition. I've got all the – Castro taught my level one. Like, I've got Rob Wolf's nutrition. I've got the CrossFit football cert, mobility cert from K-Star. Like, I have a lot of those under my belt. And when I had kids, though, I ended up in a split situation,

and my weekends were tied up, and I was unwilling to give that up. So that's why I didn't continue pursuing further, but I don't think that's necessarily a bad mood bad move I'm all about professionalism and coaching and pushing more professionalism and coaching That's not that didn't really bother me that much even though I don't have currently have my level two Yeah the first time I got my Level two is actually just called the coaches prep course and there was no test to it And then I when I had to renew I went back and got my level two was actually just called the coach's prep course, and there was no test to it. And then when I had to renew, I went back and got my level two.

Were you going to say something? Sorry, I cut you off there. No, no, no. Go ahead. Go ahead. So here's the biggest difference because I know because you're under the school of thought, Sevan, that the L1 is good enough, right? Is that what you're leaning towards? And that if people want to get their L2, I'm a huge proponent of the L2.

Don't get me wrong. I just don't think that it should be mandatory to leave your gym open i don't yeah i don't think that but go ahead so here's the here's the analogy like bear with me i was trying to think about it while we're doing here so the l the l1 opens up your mind to the methodology in this whole entire lifestyle the way to live right the l2 does that for your ability to manage and coach a class so you're going to get the same epiphany of like, holy shit, look at all these tools. I have these strategies. Look at how they distilled down how to coach. That's the L two. I, so I actually am in complete agreeance with this

because in terms of walking back into my classroom and instantly becoming a better coach, the L two is a hundred percent that you go away. And what they do is they, they really stripped down. So they bring you in the same small groups and they're going to say, all right, so you're going to teach deadlift, but you can't use any verbal or tactile cues. You can only do it by visual. And now it's going to say like, okay, we're going to isolate that. Are you good at that? Okay. Hey, you could only use visual. You can't, or only use, um, um, hearing you could, you can only talk, you can't touch them and you can't you or only use um um hearing you could you can only talk you can't touch them and you can't move now coach this person through it right so by breaking that down

and making you teach through the different methods there it it helps you learn how to coach and manage a group tenfold better than before dude there's no doubt that every seminar at hq that i've ever been to amazing l1 mind-boggling l, mind-boggling. L2, mind-boggling. But why? I hear you, Sousa. Yep. Why do you think that it should be mandatory? Does that go back?

Are you saying that you're a proponent? Yeah, tell me. Why do you think it should be mandatory? I'm not arguing with anything you said. I'm just saying I don't think it should be mandatory. If every class was ran the same way that the l2 is taught it would be at the highest fucking level you could have it and that would be your quality control and that's what their attempt to do is here uh you have no excuse not to know how it's

done get continuity okay all right yeah i mean here's the thing you're gonna learn all your reps out on the floor right josh can tell you that um 10 teaching your 10 first crossfit classes on your own out on that gym floor is gonna teach you a ton more than like any course will but the in my opinion the best way to look at the class management how to teach the type of cues you use the professionalism that is brought to you in l1 is bringing it to you in the L2, but you could just take every single thing and just immediately apply it to your class. So for me, people that are opening up new gyms as we go into this second era of CrossFit here, let's call it,

I think is definitely, it's a good call. I think it's a good call. The L2 is a good call. Jeremy, this dude is black as fuck. Darren Coughlin, the hillbilly is 100%. This is completely off subject here, but Thomas Sowell said that black culture in the United States is derived from hillbilly culture. And so here we have two data points. If you put them together, we have a sort of a jeopardy moment. John George, as a previous affiliate owner, I'm surprised it's taken this long.

I was always told affiliate fees were not all the same. I just asked. I heard gyms were paying 500. I was paying 3000. I agree. I'm surprised it's taken this long. Also, I go back to the awareness that it's going to rattle the base. I think that everyone who's at the base, who's been grandfathered in all these years, should be rattled. I would

be pissed. I'd feel a little bit- Greg, this is the bottom line. Greg gave us all the tools and he gave us amazing tools to use. But I think he would agree that the affiliates built the brand from the ground up, dude. It was the it was the early it was the Craig Howard's and the Dale King's. And it was the ones that are the real blood and heart of this whole thing. And one thing I noticed from the inside and listen, there's a, I love, again, I cannot, I was the smart kid in school. Okay. 32 ACT valedictorian. I was not an athlete. All right. So I very much so love the academic side of CrossFit.

It felt like while I was on the inside that the brain, they were trying to put the brain where all the organs should be. Like they took out the heart when Greg got pulled out and then they tried to take a brain and just put it there. It's like ED, the education department just fucking took over everything. And, and I think it was the best of what we had left because everything had been so gutted. Siobhan's gone, you know, everybody's gone. So that's cool. But like, I don't know, but,

and I'm going to throw back to an analogy that Greg used and, and he said that they thought they were buying pirates in the Caribbean amusement park ride, and they were buying an actual fucking pirate ship. Well, what's the first step to make a profitable actual pirate ship? You've got to get rid of the fucking pirates. Wow. Wow. I hadn't heard that one.

Look at that boy. Look at that that one look at that boy Look at that boy look at that boy A quality over quantity Uh Barbell spin yep he told me Uh that Paulina I'm not sure what you're talking Oh uh spin said Don oh Uh okay yeah so at the

Uh if you want to see Um three um Uh fantastic interview go over to the barbell spin. It was released a couple hours ago. Spin has three affiliate owners on there. Great people, great different perspectives. And in that interview, spin also offers up the fact that. That I wrote it down here at 718.

Don told spin they broke even in 2022 i i'm not sure what the implication of him when spin says that i'm not sure what he's implying he doesn't say you want do you want to see that let me play that for you that's a that's a um yeah it's a very part i'm not sure why uh spin maybe spin purposely left it vague but I'm not sure why spin is sharing with us that Don told him that is the implication that they have to make more money is breaking even good is breaking even bad like what's the implication there

okay here we go this podcast is live right now for anyone to go see after you're done watching this show it's a great podcast it's the best one I've seen so far on the subject okay on the rate increases. Here we go. It's just deferring costs that we have to do anyway.

Yeah. Yeah. One of the things I did, I was able to speak with Don Fall last night before this came out. By the way, so that is interesting. He says he spoke to Don Fall last night before this came out, i think a few other people did also i did not no contact from hq by the way for me i had no idea no insider knowledge nothing just strictly rumblings and rumors from way outside the uh the heart of crossfit so it is interesting that they did decide to speak to

several people before they release this i would say of all the stuff that i've watched so far from people who had inside knowledge this is the only piece that doesn't seem like propaganda did mention that as of in 2022 they were actually cross what was actually break even financially and that was one of the reasons why they are looking to do this is to basically become financially more stable and, uh, you know, make sure that they can actually be there to support the affiliates.

Um, does that change your opinion of, of this increase? Uh, thoughts. What, what, so,

so I guess spin does say Don told him that because i guess breaking even is no good where's the money going that's the question where's the fucking money going bro like we have more than 10 000 affiliates and the mean is probably higher than 2000 right than my 20 mil that's not including education revenue t-shirt sales etc etc etc who the fuck's getting the money well let me let me let me say something let's just say some things okay um uh the um they're doing the games right so so that costs money that costs all the money they have that's got to be it uh they have they have they need a legal team to defend the brand. They need an affiliate team to onboard people. Okay.

They do have to defend the brand, Sousa. They do, but can we categorize something? Can we categorize something? Is the funding of the games, is that a necessary investment to helping affiliates? I don't know,

but that would open up a whole nother can of worms. I do think the open is very necessary to the brand value. And to the games. Okay, okay, fair. But specifically to Josh's question, where's the money going? Right. I don't think that they're doing coke and flying around to… No, I don't think so either.

But here's the thing, and I've said this endlessly on my show. I don't think that they have a lot of workers, meaning they have menus and a kitchen, but they have no chefs. Like we're not seeing product come out of there, and so we're just like, what the fuck? And so you want to see – Got to be games. Yeah, you want to see – Got to be games. Dude, 50% of the fucking DMs that actually aren't – that I get, that actually say what they want, everyone wants media.

It's always been like that. It's been like that since 2018, since we threw away the media team. It's just a steady drumbeat. They want fucking media. I mean, that's why this show kills it. Dude, it was one of the most powerful things, man. Those videos that you pumped out, like, even every second counts, bro. Like, I have the original on DVD.

Like those things made us feel shit. They made us feel something. They hit us in the chest. They're like, fuck, I want to be a part of this shit. Like that's what the media does because it puts it all on blast. Like, but you got to, it's got to be, you got to know what you're shooting to put it out properly, you know? Yeah. Natalie Bates.

Hey guys, we saw the writing on the wall we got uh greg's blessing in 2022 and de-affiliated almost a year ago carlene uh matthews uh i want to be able to help people i want to be able to save lives we offer free crossfit to those who who carlene good to see you here Yeah I agree Patrick Clark Carleen you're amazing yeah huge fan Carleen Actually just started following you a couple days ago Um Uh Vindicate

Uh Halpin my brother's a 10 year affiliate probably Won't renew he was loyal to the brand he doesn't Need the name to continue exactly The same as he has been Travis I'd like to know How that turns out I'm going He doesn't need the name to continue exactly the same as he has been. Travis, I'd like to know how that turns out. I'm going to guess that the majority of people, 51% or more, who have decided already to not affiliate, re-affiliate, will change their mind.

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How do stop losses work on Kraken? Let's say I have a birthday party on Wednesday night, but an important meeting Thursday morning. So sensible me pre-books a taxi for 10 p.m. with alerts. Voila. I won't be getting carried away and staying out till 2. That's stop loss orders on Kraken. An easy way to plan ahead. Go to kraken.com and see what crypto can be. Not investment advice. Crypto trading involves risk of loss. See kraken.com slash legal slash ca dash pru dash disclaimer for info on Kraken's undertaking to register in Canada. Thoughts on that? Go ahead, Josh. Thought that i haven't i haven't made a decision you have not made a decision i have not made a decision i valued i'm gonna i i don't have to until august you know and so i'm i have the i'm trying to be more grown up as i age and not be as

reactive so i just i want to i can i'll tell you this we're we're about 20 members down from where we were last year. Why do you think that is? I'm looking at it. I don't know. I think that I live in this existential world where you just do the right thing for the right people at the right time, and then they just come in your doors. And that business model is always run perfectly. I also very much believe that whatever business you're looking at, it feels every the energy of it filters down from the top. And we have a different top now. So I don't know. And I'm not when it ultimately comes down to with any business owner, it's on me.

And I have to figure out it's definitely my problem, no matter where the problem is coming from. It's nobody else's fault but my own. And I think it also might just be the natural role of things. As you get higher, the percentage swings get bigger. You know, Craig said that. And so I'm just trying to ride it out. But inflation's up for us too. You know what I'm saying? It's not just up for HQ.

Well, and let me say this also, but a lot of gyms have raised their rates. When's the last time you raised your rate, Sousa? We just did like a couple of years ago. Okay. Bear with me. Will you talk about years ago. Okay. Bear with me. Will you talk about that for one second? Bear with me. Yeah.

Yeah. A rate raise? Yeah, yeah, yeah. Yeah. I mean, you have to do it because at certain times, and Josh, you know this, like each year after year, if I pay $100 membership in every single year, my rent goes up by a certain percentage. My electricity bill goes up to a certain percentage,

you're fine the first year. It's not going to be that big of a deal. It's in the margin a little bit. Second year, it's like, oh, okay, it's a little bit more. By the third year, you're like, dude, we've felt like I've grown a little bit, but the revenue is stagnant or even feels like it's dropping off. And then at that point, you have to make the decision of, okay, we need to at least bring up the prices

to cover these new expenses that are coming in. And here's the thing. I think if it's handled properly, like when we handled it with the members, we were like, hey, look, here's what we're doing. We actually added a morning class time that some people wanted. We already brought in some new equipment and different things like that. We made some investments into the way that the building looked. And then that way, when you actually do the price increase or when they see that come down the pipeline, they're already, you could point at and tangibly look at a few things that were added in value with that. So I think that, you know, that has to be taken into consideration that if you're going to

hike the price, then you have to be able to at least point at some sort of like- Reflecting the value. Reflecting the value reflecting the value but it comes down to the fundamental question that you're asking josh like what where is the money going and seven the thing that i'm worried about is when i keep going back to the games here if that if let's say 51 or 52 cents of every dollar that comes into crossfit is spent on the games around media production around broadcast, around just anything that it takes to run that competition, then what ends up actually happening is the

affiliates are funding their own demise. And that's what I'm worried about. And the reason why I stopped you and I said, hey, let's you're muted. You're muted. You're muted. You're muted. Muted. I don't see how that funds their own demise. First of all, I don't want to fall too far into the weeds on this,. I don't see how that funds their own demise.

First of all, I don't want to fall too far under the weeds on this, but I don't see how that funds their own demise. If you're saying that it would extract too much money out of them for the party? Yes. And then what ends up happening is that because— We don't even know if that's happening. We don't know if that's happening. I'm going to take a strong guess and say that that is taking up a large chunk of revenue but here's the problem here's a problem if that is not considered an investment into affiliates or training that is just considered subsidizing the game so the games could live if you were to detach every revenue dollar of training

and affiliateship and you did not allow that to pour into the games, would the game still exist as its own entity? I would love to know the answer to that question. That's right. So pause right there. So that's why I'm saying that if the answer to that is it cannot, then training and affiliates is actually subsidizing the games and therefore not an investment. So every dollar shouldn't be moving towards a subsidy it should be moving towards an investment so that way every dollar that is spent from the affiliate and training dollars are going back into trying to grow the training and grow the affiliateship let me ask you the best mood the best mood that you've been in all year about crossfit was when you were at the games and that put you in a really good mood you liked that i thought that it was a nice change it felt like old school that's gonna be hard we and we know that this um

hey dude hey let me let me stop you real quick no it felt like that report came out during it was the survey was going on during the games yeah and and so there's a opponent a psychological component there that i i don't think it can be as black and white as you're saying I don't think you can just be like fuck the games were all better no and I'm not saying that because there's incredible value to the games I think there is too with the CrossFit name on it

I'm my question just goes back to how does that look on a financial point of view because there's still a way to sever the the revenue that's going into the games from training and affiliateship and to figure out how to a way to sever the the revenue that's going into the games from training and affiliateship and to figure out how to produce it on its own somehow well so that's kind of funny so what you're saying is it's a budgeting issue i mean i think yeah so you're saying maybe spend less money on the games and i'm saying hey maybe get rid of people who

don't actually do anything well yeah but but i also agree with that too, though. Let me read some other DMs. Hey, Sebon, I recently took over a 10-year affiliate. I've been working as a coach there for nine years. We roughly have 40 members and we're situated in Australia. There's no way we can afford this increase unless I put members, unless I raise members fees up. However, my area is the most overpopulated area for CrossFit gyms. Oh, no, for gyms in Australia.

Not CrossFit gyms, but every other gym similar to CrossFit, just within a one kilometer of our affiliate, is eight functional fitness gyms. I just can't see the value in the increase apart from the name. We don't receive anything else for this money. I do, however, like the level 2 requirement. Over the next six months, I will be doing some hard thinking whether we stay affiliated or not.

I'll devil's advocate for HQ. When I was working, the three years that me and Dale and them spent as affiliate reps reps our whole thing was actively trying to find ways to better serve the affiliates so that was a very active that that was the whole gig that was the whole gig so I do believe that there are still lots of good

hearts in the game like there's Nicole Carroll's and you know Dave playing whatever long game or short game he's playing and whatever's going on. There are good people still in the game that really love CrossFit. And I think that our whole team was to increase the value of the affiliation fee. That's what we were trying to do. That's where you have the affiliate partner network. Now you have CAP that's included with your affiliation fee, et cetera, et cetera. So they are trying to up the value of the fee, but is it enough? Because really, you know what I loved about it? The search engine optimization.

We were number one for fucking ever. We're not anymore. Well, you could fire all the country managers and in one year make enough media to make you guys number one again. That's what I fucking want. The Apple program is a facade, by the way. It's a facade. program is a facade by the way it's a facade it's a field yeah they threw it on after greg was out to try to uh it was there when greg was there oh that's right you're right it wasn't opposed to it but um uh i was part of the team that pushed it through it was it was a facade it i i would i would take all that money and invest in media yeah um youtube

uh let me let me this is shifting gears a little bit but don did say they wanted to increase um uh they wanted there to be 30 million active crossfitters worldwide this guy writes barrier of entry just doubled for anyone who wants to start a new gym how does that help them reach more people now he is comparing apples and oranges he's the presupposition there is more gyms means more more crossfitters i don't i don't know if i buy that but it's uh it's it's an it's worth noting it's not stupid talk yeah well here's a deal if crossfit hq right now from their point of view if they're saying hey if we have a spread of five gyms and two out of those five gyms that people walk into just immediately turn them out from crossfit it's like a nightmare scenario right So if we could first shake out those two out of those five gyms,

so now we got three solid gyms, well, now they could justify to the board to invest a ton of money in the media and marketing because they know that those people that they're now driving to the gyms are going to get a better experience due to the fact that they just tried to do the quality control with the L2 in the price to barrier to entry.

Because if your product sucks, you don't want to just tell more people about your product. You want to first fix the product, then go tell people about it, right? Because if the product sucks and they do a massive drive, and this is not saying this, I'm just walking to this example. If the product sucks and you do a massive drive to run people to that product, you're going to get way more negative referrals than you want. You're better off not saying anything. So if you first fix the product and then you go after the marketing piece of it, the media piece of it, let's hope they do,

then you're going to run them to a better product. So now all those referrals will be positive. Well said. You're making sense. I also want to say this. Some of you aren't going to like this one at all. We all know 100 affiliates who have benefited greatly when the affiliates in their area went out of business. Yeah. The rich get richer. gyms next to net back and forth to them closed and they put on 50 members in a year like like and and we're like yeah whistling dixie so uh so this isn't this isn't um this isn't gonna hurt everyone uh uh patrick clark if a gym has 100 members a 12 increase in their monthly rate will cover the new fee here's the problem most of the gyms have probably done that five times in the last 10 years yeah i would not i would not pass this

affiliate fee on to my members you got to take this i'm just yeah you got to take it and try to just like them i do agree with why do you guys say that you think it'd be bad why do you guys say that you have to just take it go ahead josh you go first i protect my members man i protect them for everything every product we carry in the front it's not to make money on it's because they like fit eight or they like kill cliff you know what i'm saying? I don't even like Kill Cliff. No, no spot. Fit8, I love. Let's get you a Fit8 sponsorship. But like, you know, but it's, it's always been about the members. It's always been for the members. Like there are things that we absorb. Like I take really, really good care of my coaches, but every price increase that my coaches get is a little bit

less than I'm taking home, you know, like, but it, but when you take care of your, this business has always been about taking care of your people. That's what it's always been about. And that's why I grandfathered my people. My, I, my whole shtick is like, I'm not going to forget the ones that fed me when I was hungriest, you know, and I'm, and I'm not, and I, I will, I will go out of business grandfathering my OGs in. Not that I'm opposed to price hikes.

Is this emotional, Sousa? Is this a smart business decision or is it emotional? Why won't you pass it? Why won't you pass it on to your members? Number one, it's not significant enough for the size of my gym and membership and revenue to do that to the members because I am going to play a little bit of the emotional side with what Josh said. I do think it's emotional.

I think all the gym owners, because we have such that relationship with our members, do protect them from stuff like this. So when we're talking about a year over year increase on just the cost of doing business being 3% one year, 3% the next year, 3%, at some point, Josh and I had this discussion when you jumped out for a second. And at some point you just have to look at it and say, hey, in order for us to stay alive, guys, I need your help with this. And the members usually show up and go, cool. It took you long enough. We'll easily pay another 10 or $12 because we want you to be here. Um, so if you do that with something in what I consider now, granted, I'm going from 3000

to, uh, 4,500. So it's not a huge jump for me personally. Um, but I wouldn't look at that and then just say, okay, I'm just going to immediately pass this cost on to my members. That's kind of one, like I said, you just kind of take it in the chin. This came from an affiliate. One thing for sure, every affiliate owner should have their level two at minimum. I'm not mad about the price increase, still worth it to use the methodology. How I think is best for my community. I'll be interested to see if they do what they say they're going to do with the money what did did they say what they're going to do with the money they talk in circles man i was going to

say i hate to say that but everything i've read so far um has not said anything it's very vague that when they when they told us that they were no longer going to continue our position they were like like, well, we're looking at all these other things that we could do with you guys. I'm like, okay, what's actually happening? Dale King spoke up. He's like, are we getting shit canned or not? This is very confusing. What's happening? That's that corporate speak, man, where they just talk circles and that it's impossible to follow because there's nowhere to follow it to. It's a circle. This stuff is frustrating. I'm going to show you. I want to read this to you. I think this is behind. I think this is it says about the changes

and this is the first four paragraphs. I'll read it to you. Thank you for being a part of the CrossFit affiliate community. Affiliates are, and will always be the lifeblood of CrossFit. And we have immense gratitude for your continued commitment. Like that paragraph is not needed in this. We're previously shared our goal of growing to 30 million members by 2030.

To do that, we need to innovate and reinvest in the business to ensure we're attracting more people to CrossFit, driving a greater number of leads into the gyms and protecting and preserving the brand in multiple ways that no one believes you no no you did not say anything you now it's getting to be offensive right now these are hard-working people and now you've taken two paragraphs and you haven't said anything yeah paragraph the supply and inflation and higher costs which have risen by an average of 74 percent that could have been said way shorter crossfit not raise the price in 11 years we uh now going for some sort of weird emotional appeal

yeah in order to sustain healthy business and invest in resources to achieve our goals we need to increase affiliation fee over here they have not said anything so when you people are writing to me are they going to say what they're they say they're going to do of course they are they're not they don't say anything. This is Facebook talk. This is the part that's weird. All of this shit is weird. Why not just say, Hey guys,

why not? If they were really doing what you say, you think they're doing Susan, why wouldn't they just say that? I have no idea. And that's the mistake that, um, uh,

HQ seems to make is that they, there's a lot of fluff and of fluff and they just need to give it to us straight, man. Listen to this new line. And break it down. The idea of an increase lightly. This is like the parent who tells you this hurts me more than it hurts you. Yeah, yeah, yeah, yeah. Exactly. Nobody has time for this.

No. It's frustrating. This is hurting your cause. Stop talking to the fucking affiliates. Bro, the last line where they're like, we're laser focused. So in 2024 and beyond, my kid's been watching a lot of Toy Story

and it's like some Buzz Lightyear shit, man. I'm like, laser focused and beyond. I'm like, what are we doing? Rory Marlow, affiliate owner. They could lose 3,000 affiliates, still end up plus $15 million, 10,000 affiliates times 1,500. There you go. And that's only a 1,500 increase,

some that are going from 500 to 4,500 or 2,000 to 4,500 or 1,000 to 4,500. So this is the propaganda again. Sorry, Halpin, but you're good on the propaganda. If your small business can't handle $125 a month increase after 11 years at the same rate, how small is your small business and should CrossFit continue to cater to that? I guess that's fair. That's not as propaganda as I thought. But once again, there's this like – it's on you.

Let me play this to you. This is the only piece of content I've found that's come out of HQ. I don't know if you guys have seen this yet. Regarding the – this is a little long, but regarding the rate increases, this is the only piece I've seen so far from HQ that's video, that's talking, besides the people that they've kind of asked to do propaganda for them. This is from CrossFit Affiliate Midwest. Andrew Charlesworth.

Okay. So this guy does work for CrossFit HQ, right? Yeah. Okay. So here we go. This is the only, this is it. Here we go. Hey, everyone.

I've recorded this six times now, and maybe the seventh time is the charm. I care about the Midwest affiliate owners so much that I don't want to come off as a computer or somebody just sending you an automated email. That's why face-to-face, as much as you can through a screen, the affiliate fee went up to $4,500. It's not charged for the monthly. It used to be a 20% upcharge to do monthly. That's no longer.

That's the facts. I've been getting emails. Is it going to 10 grand? Is it going? Okay. So let's just say that. Let's give it a little. That's an interesting thing.

So if you used to pay monthly, I guess you paid an extra 20% on top of the $3,000, which would be an extra, which mean your fee. $3,900 a year? $3,500, right? Oh, okay. Maybe. Yeah. $3,500. $3. 35. So, okay. So for those people, it's only a thousand dollar increase. Okay. Here we go. I hope you guys realize that I care so much about you guys and what your happiness looks like. And if Houston, and if houston we have a fucking problem this makes you unhappy i i want to empathize with you and i want to talk to you you want to empathize with us or you are empathizing with us what's

going on here people so if you're not getting on my calendar to maybe have a conversation with me or you've never met me do that. Let's change the world together. Right now. We pivoted to get on my calendar and let's change the world together. Send angry emails or angry comments. XYZ. Like that might feel good in the moment, but you know,

what feels really good is like human connection. So now, now he's, if you're angry, he's not, he's saying, don't get angry. Move to human connection connection this is fucking pretty

wild an affiliate owner if the fifteen hundred dollars that came with the increase was such a crushing blow then i want to have a conversation with you about a how how can we change that maybe some concepts maybe some practices okay um okay i'm with you now we got something maybe you're like hey i i really didn't want to have an affiliate it was it was just a hobby that's that gets a little tough wow did you hear that maybe i didn't really want to have an affiliate it leaks out it's just a hobby wow wow so if you don't pay the $1,500, you really didn't want to have one anyway. If you don't vote for me, you ain't black. Yeah, if you don't vote for me, you ain't black. Here we go.

Oh, shit. We want to raise the tide of what it feels like to walk into a CrossFit affiliate. We want to up people's education. We want to up people's education. So now he's equating you pay the $1,500 and that will up your affiliate members experience when they walk in. That's what you asked specifically from us. You asked specifically from us to up the customer's experience. And so how we're going to do that is we're going to charge you $1,500 more and make you take the L2.

This is some crazy shit right here. That's bad, dude. So we're on the path to do that. We're on the path. The main focus I want you to take away is if you're pissed, I get it. But if you don't utilize me and get on my calendar, come to the Tuesday calls where all we do is talk about best business practices.

I mean, do that. And you're going to get the value. All right? I love you guys. I'm trying my best to kind of stay off of the social media as much as I can. So send me an email. Wait, you're staying off of social media media but you're the only voice from HQ that we have

holy fuck in the little link tree thingy is my calendar alright I take meetings Tuesday through Thursday from 11 to 3.30 so that's kind of I guess that

you'd say that's the official word coming kind of, uh, the, the, I guess that you'd say that's the official word coming out of HQ right there. Thoughts. Go ahead, Josh. It kind of sounds like he's like, listen, I'm worth it. I know Andrew and I'm not going to bash my guy. He's at CrossFit 2A more up the street. Um, but it very much toward the end sounded like I'm worth the $1,500.

Exactly what he said. That's not what it sounded like. He said, call me. Cause I'm, you'll, you'll see that I'm... Yes. I just... I don't know. That seems a little narcissistic to me. Well, I'm going to guess he didn't mean it and it's a word salad and he was a little nervous.

A hundred percent. A hundred percent. I want to cut him a little bit of slack. But, dude, now is not the... There's a street fight going on and you just fucking walked out there and are the only... Right in the middle, bro. Let them give you some cover fire first. I respect him fucking walked out there and are the only one. Right in the middle, bro. Yeah, let them give you some cover fire first, you know. I respect him for jumping out there to, like,

at least speak to his people, though. You know what I'm saying? He feels a responsibility to the Midwest affiliates. So, especially since he's the only one, like, because he's the only one, I almost respect it in a way, you know, because at least he's saying something to them, you know, because apparently none of the other affiliate reps have or anyone really. So he's given that. Let me read a couple more.

If affiliate fees were used for. Do you want to say anything about that video we just watched? It's going to sound weird, but I get a similar vibe when Dave does his weekend review lately. Oh, shit. sound weird but i get a similar vibe when dave does his week in review lately oh shit okay not in the sense of the the talk or that type of hyperbole that guy was using or just that corporate speak but in the sense of that everybody that's working there that's forward facing is trying to say something and they're trying to hold it together but i don't think a they might necessarily agree with the decisions or b even know the whole entire plan. Okay.

Like trying to stay faced, trying to do something, but just they don't even, you know, who knows what they know or what they don't know. Right, right. That was, that was some, that was, I know that guy's responsible, I guess. What's his job, Josh? He's responsible for- He's an affiliate rep. He replaced

me and Dale. Oh, you and Dale King? That guy did. Hey, Sevan, I thought I'd give my two cents. This is complete bullshit. In my opinion, I've been an affiliate for almost 15 years. Never, not one time, have I received anything from HQ that helps me gain a member. I've defended most of the CrossFit name thousands of times against CrossFit.

It hurts people and CrossFit never seemed to give a shit about this conception people have. It's one thing to raise price for new affiliates, but it seems like a desperate act for financial gain to put an unjustified tax on CrossFit's frontline soldiers. They don't need to raise this despite inflation. It costs them nothing to add

another affiliate. They've been in the office. I've been in the office. I've been in the fucking trenches actually teaching this shit and changing people's lives. And I realized a long time ago I didn't need the CrossFit name to do this. But I stayed loyal anyways because that's the type of person I am. Greg Glassman is the man. I love that guy. And he was the main reason I stayed loyal.

These snowflakes pushed him out and they might be pushing me out. This has nothing to do with the money. I can completely afford to pay the additional charge, but principal means a lot to me. I have a lot to think about, but at the moment I think I'll be de-affiliating much love. Appreciate everything you do. This is, I'll tell you this, this is the largest gym in the world. I've never seen a larger gym than this gym. Not more members and not a larger space.

That's it. Right. And it's not not it's not a financial issue for me either it is a principal thing if i were remember we talked about the pruning the tree analogy if i wanted to um move the company in a certain direction that would allow me to have more control i don't know if that's corporate i don't know if that's franchise i don't know you know i don't know what that's corporate, I don't know if that's franchise. I don't know. You know, I don't know what that looks like, but if I were going to do that, I'd first want to shake the tree and I'd want to get rid of all the people that would push back against me early before I made those decisions. So there's a lot of your gyms that are saying, F you, I'm out. This is based on principle. And they're going back to like talking about why they got into it for Greg. CrossFit might be looking at those people

and saying like, okay, they're never going to go with like a franchise or a different type of model anyways. So let's just do this as a shakeout and let them go. And that way that the gyms that are still there might get on board with our potential plans in the future. Get rid of the pirates. Oh, back to the metaphor. Good. Okay.

Let me read this one to you. I personally love the increase. This is from an affiliate. I'd honestly pay $6,000 if it was needed. I want HQ to have all the resources it needs to make this methodology shines and in turn has zero excuses if it doesn't. So this person is saying, let's completely support HQ. And I, and pardon me, I believe in this philosophy. When people work for you, you should support them completely before you fire them. So he's saying, okay, I agree. They haven't raised the prices in 11 years.

They don't even have the fucking resources to succeed. Let's pay more money and give them the resources to succeed. Let me ask you this. I buy that logic. And if that's true, I don't think they're offering – I don't think they raised the rates enough. That could be another point um i don't know maybe they found a happy medium again i bet you that a lot of the math of like who is going to leave how much we're going to gain what's the difference in between probably

had to do with their price point decision at least i hope as they analyze the framework of it i sincerely hope they're not comparing like our sale value to other like planet fitness or globo style gyms that are based upon members that don't come because CrossFit gyms are based on members that do come. And there honestly aren't a lot of models like that. Maybe yoga, you know, some of those studio stuff. So I hope they at least have the foresight to do that because if they're trying to price this out, like I, it, I think for, to open a planet fitness, you trying to price us out like i it i think for to open a

planet fitness you have to have 500k liquid for example just to have just just in case you know so if they're comparing us in any way shape or form to the rest of the fitness industry and they're not choosing the right ones that could be very problematic uh i i i think we always have to err on the fact that a lot of people um pulling the strings these days don't know what they actually have uh in that interview that um brian spended earlier today i highly encourage you to listen to rebecca fusli's take on it at a 30 40 in there she talks about some really good shit. You should all go over there after this is over and go over to the

Barbell Spin and listen to Brian Spin's interview with the three affiliate owners. Stephen Flores, can affiliate fees be based off the size and population of the city? It seems unfair when small gyms have the same fees as bigger cities. I completely disagree, but what do you guys think? I feel logistically that would be impossible almost, you know,

but it is hard though. Like I'm in Oakland County, which is a pretty affluent County in Michigan and Dale, the average annual in like the housing rates where he lives are like 28 K or some shit. Like, I mean, it's just, it's because it's Portsmouth, Ohio, you know what I'm saying? And he's down there crushing it. So it's, that's hard. That's a hard problem to solve. I don't, because then you get like, how do you do affiliate reporting? I mean, cause you can't just base it on the city cause there's different parts of the city, you know? It's even if you, even if you could do it, I, I don't think it's smart.

I don't think you should have different fees really for different countries either but um uh suza um honestly uh mike uh uh pool boy um honestly i love my level two seminar far more than my level one do you like your level two more than your level one i did yeah you did too yeah yeah i'm telling you like you're like you get to you leave there you're like fired up to coach the class and you could go right back and implement all these strategies into it immediately. Like it's just a very like the L1 is like getting your book smart. The L2 is like cutting your chops in the street. Savon, what do we do for box owners who don't coach but employ coaches? I'm not sure i understand the question what do you do box owners who don't coach but employ i don't understand that i'm just a normal man receiving texts from my wife live during the show that i forgot to flush

the toilet um people a wad zombie people would have no problem paying this increase if they had faith in HQ to make good decisions. Here's the thing. I really think this goes back to slapping people. I think people are just like, fuck, man. I've been doing this for five years. Man, we grew accustomed to the way Greg did things. Yeah.

And he always just thought, for as long as CrossFit's been, we've been grandfathered in. This was low barrier of entry. We're a media company. We'll never raise your rates. Now we have three things going on. We're not a media company. We're raising the barrier of entry.

It's three shifts at once. I'm not saying they're good or bad. We'll not have a media. It's just a complete... It's good for me, but it's bad for them. Brett Bauer. Brett Bauer. Seve, we have four coaches and already committed to giving them $750 towards their L2 in 2024, which would also mean a pay raise.

$1,500 is a lot to add for a two-year affiliate considering the plan. is a lot to add for a two-year affiliate considering the plan uh david attaway a 10-year affiliate that's coming april not how i wanted to celebrate yeah man this is just a psychological blow oh wanna love so what if your coaches already have level one and level two what's the value so what is the gain everyone is suffering from inflation members won't go for higher fees it's not cheap to begin with look at this hillbillies right again geez uh they laid off 30 of the staff in the why is that blinking like that i don't know but like the it was given like the beep beep beep thing too that was weird and they laid off 30 of the staff in the why is that blinking like that i don't know but like the it was given like the beep beep beep thing too that was weird and they laid off 30 of the staff in the last seven months what has happened i don't know if that's true i don't know what's going on either

we've been hijacked weird all right guys uh great uh discussion josh uh any final any final words guys everyone should just hang. My advice is this. Hang tight. Process. Hang tight, man. Chill. Deep breaths. All the pundits, people like me, thrive in this situation because it's just more content for us.

Take it all with a fucking huge grain of salt. Reach out to HQ. Take Andrew's advice and make an appointment with him. Reach out. You know, do the thing. That didn't sound sincere. Reach out. Touch base with them. Get face-to-face.

Hear it from the horse's mouth. We'll do another one of these probably soon, maybe even tomorrow, where we get together and process this. Any final words, Josh? I'm with you. Just ride it out, man. Try not to react. Do what's best for your business react do what's best for your business do what's best for your people and you're always going to come out on top and if they're

making us do it a little bit better and you weren't already then that's not a bad thing as far as the level two action goes the people claiming the 11 years haven't been there 11 years i don't know what you mean by that but i really apologize for this whole blinky thing i don't know what's going on bring it up on my end suza any final words um yeah my iinky thing. I don't know what's going on. Susa, any final words? Yeah, my, I just want to, I don't, sorry. I don't know what's happening there. Yeah. I think for, for HQ, if anybody from HQ is, is watching this right now, I think you guys need to just really become more genuine with your messaging and just say what's happening because for a lot of the affiliate owners that

are questioning where their money is going right now, if there was some sort of game plan or value add that we could tangibly see very soon, I think that would help a lot of people process and stay to know that this is going to a positive change and it's not just going to be more of the same old. And to all the affiliate owners out there, I just think space is going to be your best friend

from any decision, especially something as big as like de-aff affiliating or not de-affiliating. This isn't a decision that should be rushed or emotionally driven. So I just think if you just take a step back, give yourself some time to process it, let's see what, what's going to come out of HQ and then be able to, to adjust from there. Let me just, let me finish with two things. Um, nine degrees. Uh,

this is CrossFit degrees, HQ, uh, H let me, I'm just going to read it to you without it being up there. Yeah, that's, I can't even stop it.

Oh, basically HQ can eat steak dinner on my 4,500. I would pay way more. I don't care how they spend it. The name itself is worth it. Uh, fair, fair assessment.

Uh, my advice to HQ is way way less pronouns way less adjectives way less verbs just nouns just use fucking nouns like no one knows what you're saying like like point at stuff we're gonna make this we're gonna make uh six videos we're gonna have a video published every single day we're gonna bring to bring the journal back. Point at actual things. The fluffy stuff makes you an easy target for just nonsense. All right. Love you guys. Josh, Honeycutt, thank you for coming on.

I wish I could get... Here, let me see. Oh, you got it. New Species CrossFit, Matthew Sousa, CrossFit Livermore. Thank you, guys. We'll see you tomorrow morning. We have Greg Hammond on from C2. Love you guys. Bye-bye.