The Gym Owners Blog/Podcast/Contracts: The Good, The Bad and The Ugly

Contracts: The Good, The Bad and The Ugly

Friday, April 28, 2023



contract, people, gym, month, business, fees, money, commit, work, membership, buy, clients, owners, talking, commitment, consumer, person, choose


  • ​Introduction to this week’s show - 0:01
  • ​What does a 12-month contract mean to the consumer? - 6:59
  • ​The most gangster thing ever - 13:06
  • ​What’s the difference between a 12 month commitment and a real investment? - 16:57
  • ​What’s the biggest caveat to a 12-month contract? - 21:09
  • ​Don’t lock your members in with contracts - 26:22
  • ​The number one thing that we do with every single private client that we have ever worked with - 31:18
  • ​The minimum payment and reinvesting in yourself - 37:24


Tyler 00:01

Ladies and gentlemen, welcome to this week's episode of the gym owners podcast. How's it going guys? I'm your host Tyler over there's John. Hi John.

John Fairbanks 00:08

Hello Tyler.

Tyler 00:10

Guys Today we're going to talk about a thing that's been going on in the fitness industry for a long time. To some business owners, it's a thing they don't budge on, to some consumers it's a thing they don't budge on. very divisive subject of contracts yearly monthly, whatever it is, whatever your contract agreement is, are you locking people in should you be locking people and is it bad for your what's the word is it a bad vibe is it makes sales difficult to make people standoffish? I think the trend has changed and I think I have actually changed my opinion on them. Jesus three times over the course of my career since we opened my first gym. So that's what we're talking about today contracts the good the bad and the What the fuck is going on now? Before we start make sure you follow the show at the gym owners podcast follow me on Instagram at Tyler effing stone John how to find you

John Fairbanks 00:59

on Instagram at Jay banks f L

Tyler 01:04

What else do we have? I don't know what else we got a pimp just yet gear Academy guys, the gear Academy is where it's at. Right now if you're hearing this, they're probably getting this one by May. So we are open probably for May if you want there may be a waitlist again. But if you want to and get in and get on the waitlist, we'll notify you when we start taking people and we kind of cap things off from month to month just to make sure that people that are in are getting what they get or getting what they gotta be getting. It also allows us to when you come in and start that we can hit the ground running. So let's get started. John, oh fuck, I should tell you how to join the gear Academy get in on the waitlist, go to gym owners link in our description to get all the other stuff get in on the Facebook group. So if I'm distracted today, John and I were just pre show ranting about contracts. So we have always had to like spool things back down and circle back. So guys contracts, specifically fitness membership contracts. That's where we are, that's what we're talking about today. And I don't know the perception, I think among gym owners it's always been split amongst gym owners that I talked to. There were many that were very hard, like no, I would never I would never, then there's some that say very much that you need to as a business, you just you have to have people locked in you need that certainty. You need fruit fly without anything in writing. Your business has no value either. Meaning if nobody has a contract with your business, what happens if your head coach leaves? Now, your business might be worth nothing. And if you come from consulting, dealing with things like leveraging debt, bank notes, or dealing with investors, partners, or selling out for partners, becomes very, very, very complicated. Try to figure out what your shit is actually worth. So I feel Yeah, let me tell you what I did. We opened our gym, I think we started with just regular membership, like our Grand Opening stuff was everything was based on membership price. I don't think I locked anybody in at anything in the beginning, but I could be wrong. And then I think I had a bunch of non committal motherfuckers coming in through the door that were pissing me off. When we got busy. Like we kind of got full, the gym got full. And but it was we're getting a lot of month to month wishy washy shit where people just didn't want to do the work. And I just didn't like it. So I want to get more money from these assholes. That's basically what I wanted is like, if you're not here to commit for, for at least a few months, like, I just did think it should be more and that way, at least it will it put some weight on someone's decision, they need to pay any more up front or anything like that, but they just needed to commit. So what I did, then probably wouldn't do this. Now. What I did then was it went if you wanted to go month to month, you absolutely were allowed to, but your rate was, I don't know what it was 25 $30 More than if you were going to commit for six months, which six months or more commitment was that's our base membership. That's what everyone was paying. And then if you committed for three months, it was met in the middle like 15 bucks more per month. Again, that's just what your monthly rate was going to be. And then at any time if you were in month to month and wanted to sign the commitment for six months, your rate went down. Right that way, that was like the painless way that I was able to do that. But that really had very little to do with locking people in for the year or business valuation. It was just like, for me, it was like I if I gotta bring in and onboard somebody who's going to come maybe three times this month, and I'm not going to see him again, this they're going to be a pain in my ass and they're going to jam up the class flow and they're gonna be very labor intensive with coaching and we tried a lot of things in regards to onboarding systems, you know, with the CrossFit gym, bringing in people is how you do that is up to each gym, how you introduce people to the class, what your classes are, like maybe your classes are super approachable and easy for everybody to scale. That's totally fine. But sometimes you get some people that are just way deconditioned and that's why these other models come in which is you'll see people I think is to bring in all those guys to do like a personal training first model like you have to do Personal Training first, I'm not opposed to all those things I just prefer I prefer to give people choice. But that's just my opinion. I don't think it's right or wrong, but that I think exists as a solution to that problem and the lack of investment dealing or leading to lack of result, lack of results. I think a personal training first model is okay for that. But also, you see, a lot of CrossFit gyms have an onboarding program. So we did in the very beginning, as well as if you were super new, we got kind of a bundle in and be like, tell you what, we'll just have like a fully newbies class, like once or twice a week, but then I'm like coaching extra now. And that became something where it's like, hey, if there weren't a ton of them coming in at once, it was like, yeah, we'll just fold into class, I'll give you some extra attention just because it's, it's not another hour of work. It's just extra work in an hour. I'm already working. So that's the gym owners inside baseball, kind of like how I got from doing no contracts to wanting to do major contracts, just wanting to solve some other problems with commitment. My gripe with the way that I did that other one is, is it wasn't a real commitment. It was just, you know what I mean? It wasn't like extra investment upfront, it didn't make any extra impact, they weren't prepaying. So it still made my sales not awesome. Right. And that became something as I gotta we got to find this is where the idea of John and I rolling out this, you know, giving an offer stack allowing upsells, allowing people to choose a higher level of service. And then if they choose to go lower, it is what it is. And those products can be priced accordingly. Which I guess kind of is John the, that is the birth of what we do with our offer step system here a little bit in that the ones that commit the most do get the best deal in the grand scheme of things. And then if you are going to choose, you know, to go down to the bottom, it's like, alright, well, that is what it is you picked you. You picked it and we're not trying to price anybody out of it. But it is meant to be the you know, the lowest value product and it's obvious.

John Fairbanks 06:59

Well in psychologically, the biggest difference is if you move away from that contract language, from a consumer standpoint, sucks. It's all legalese. It totally sucks. You know, you're being fucked. You don't know where you're gonna be in a year from now. I was at a gym that I was involved with and saw from afar. That was like, they had a two year contract option. And sure as fuck if I go into like their Google reviews, or I saw, I got like, soon as I took a photo, like around the gym, like locally, I started getting DMS, from locals. They're like, fuck those guys. Like, you know, like, like the gym moved locations, and still wouldn't let us like now they like to move five miles away. So like in their contract, it was like, well, if you move, you still can't get out of your contract, if you are more than 15 miles away. Yeah. Like, there's like so it was so litigious. That it just was like, in no way. Was it? Like, did it leave the consumer being like, yeah, no, this seems like it's for me. Like this seems like this is totally

Tyler 08:05

God, that's a big one for me. What does a 12 month contract mean, right? What does it mean to the consumer because I know that around here, not, not to your fitness people. I don't mean what that means to your people who work out all the time who have been coming to your gym for a year, it doesn't mean anything, they don't give a shit at all, they'll commit, they're already committed, right? But what it means is if you're trying to grow your gym, you need new people, you need to convince people to take a step into fitness. A lot of them have been jaded in the past. And honestly, most of the time, they're jaded by their own failures. First off, and they do want to blame somebody else. And they're gonna blame whoever they turn to for help. And they felt very vulnerable. Which means if they went to a personal trainer, even though they didn't fix anything about their food, and they paid an amount of money, that hurt, and they worked their butt off every time in the gym harder than they ever have. And they did this thing hard for eight weeks, 10 weeks, 12 weeks, but they didn't fix the food stuff. And they were gluttonous and shitty, and whatever else and their body didn't change the way they wanted it to. They're gonna blame that trainer for taking all that money for me, blah, blah, blah, blah, blah. And then when they quit, of course, they go into denial mode, and balloon up and get further and further out of shape. And they have to hate that person. They have to hate that gym, whatever this is. So if you turn to say a 24 hour fitness gym like that's the most common business models I see that have like a 12 month contracts for sure. Sure. And I get it you need the 12 month contract if you're a business because Christ at 2030 4050 bucks a month like it's just not even worth the resources to sell a person if you're getting $50 and then they can cancel in three weeks. That sucks. That's not even you can hardly get a salesperson to take a meeting for that money. Yeah, so you need it was a situation where I start luck just like you said, people messaging they're like, Fuck these people. Well, that's a pretty valid issue. Right? That one we're like the gym move. But very often what I hear around here is it's just like people Go to the gym, and they stop going to the gym. And then they just never do fitness again. It's not like they went to a different gym, that's better. And then they're like, Oh, I go to this other place now. And then they're mad about the contract. What it is, is they stopped doing fitness, because they just were going to stop or they didn't have to commit in the beginning. I mean, they committed 12 months, but then they're not going and they're stuck continuing to that's what makes them mad. And in my opinion, that is truly the customer's fault, but it does not matter. Because every time if I talk to people around town about gym owners, about gyms, fitness centers, memberships, services, whatever this is, they all shit on the ones that have contracts, they locked me, they use the term locked me into a 12 month contract, they locked me in and it's like, okay, well, where are you going now? Well, no, what about training? Yeah, they have to, they won't go back to the place they're still paying for now they're mad about it. But they won't hire somebody else. Because they're locked in. And the amount of time we have matters of fact, we had one of our guys at his MMA gym in Minnesota, who was messaging us in the group. And he said, I got a lot of people in town who really love what we do here. Because we think they also do some strength training stuff or whatever. But they're stuck in a 12 month contract with some other place. And so that's a situation where like, okay, then they better be using the other place. Because if they're not, don't just, I don't know, that piece of psychology doesn't need to make sense to you as a gym owner. And it won't. So know that when a person comes to you, and they're mad about contracts, and they're standoffish about contracts, it's not even that the contracts did them dirty, most of the time. It's the fitness industry to the consumer. It's like quitting smoking, people fucking fail and fall off a lot. Sure, a lot. They always do. And there's many big chunks where they're not even trying, right, and then they'll try and they'll try, they'll do the things and then they fail. And that's just the way it is for the consumer. That's what a person's fitness journey very often is. And you have to understand that there's not a lot of reason behind this. Whatever reason they failed last time, whatever gym, put them under contract, whether they charge too much or too little did personal training, and they didn't like it, or they didn't like the person or they just didn't like the vibe, whatever it is about that arrangement that they didn't get the value they wanted out of it. They now hate it. And now you're going to try and drop one of them in front of him. So it's not your fault. It's not even the last gym's fault. And it's not the contract's fault. It's just that person fails, and they want somebody else to blame other than themselves. Or it's not even about blame. It's just, they're upset about that situation. And now you're bringing in a situation that could last time I didn't even that didn't go because the gym sucked. And it wasn't me at all. And so I'm not getting involved in some 12 month contract bullshit. So you come here wanting to change your life. And you think that 12 months from now, with your life being changed and you being fit now, you make this wonderful 180 degree turn that you're not going to still be exercising and 12 buns.

John Fairbanks 13:06

Do you know it'd be the most gangster shit ever? Once? For our guy in Minnesota, the same way that the cell phone companies will buy out your car, like back in the day, right? They don't do anymore because nobody has fucking contracts anymore, at least not that I've seen in a while. But like the big ad that they used to run back in the day was if you're stuck with fucking Verizon, and you hate Verizon, and you want to move to whatever the fuck spring or 18 T, it's will buy out your contract, they will buy it out completely just move you over. It'd be the most gangster shit in the world to be able to set up your spot to be like somebody comes in and be like, Ah, I can't you know, Planet fatness has got me and I'm stuck in a contract and I can't get out. It's like, okay, we'll buy out your contract. Yeah. What? Like, what do you say? Yeah, now we have these packages here. Like you buy one of these packages. And you'd set it up. We've never talked about this, we're literally like, it'd be like it just immediately be like, Well, alright, you buy, you buy one of our contract, you just can't buy the base fucking bronze package, you buy one of our gold or platinum packages. It's not an agenda, you know? Exactly. It's not it's not a fucking, it's not a contract. But we typically like those to be three months or more, right? You can have them be. And it's just that you're gonna invest in yourself. And I'm dedicated to it. And I want to be able to see your goals. Because that's, that's the side psychological shift. That was for us. We're away from contracts completely. And we don't play in that world at all because it's so not about the consumer. It's not about the client anyway. And it's the same shift because you realize, like, even big, big, big guys that are in in the space, where they're like, Well, no, what you do is you get somebody to pay in full and you discount them 20% And if they want six months, you discount them 10% Well, it's the same thing. You literally described what you did originally with your pricing. When you had a contract, but instead now it's just no, it's a year commitment. And the big, big difference is they put that nut down, write that in there. So you pay up front with that investment. And it's an actual investment in our product that will help them get their goals opposed to yeah, I'll be here for 36 years if that means that I,

Tyler 15:19

you know, I spoke, I spoke earlier in defense of the contract, right a little bit, saying, you know, like, there's a reason and the reason that they're mad is not because the contracts are bad, because I think the thing you just mentioned, the function of serve the function, a contract can serve a 12 month contract or a 24 month that's pushing it 24. But the function that serves is commitment, right, you would hope that someone is coming in. Yes, I'm going to stick to this for a year by signing that, I hope that that is the psychology, but that just isn't really how it works. The money needs to leave their hands now. Can't be put in pen because you've made everybody's made promises or things you're going to do the next day, when you're out drinking with the buddies, how many show up for the hike the next morning? Very few? Very, very, very few.

John Fairbanks 16:06

I couldn't imagine. Let's ignore fucking COVID Right, ignore like a black swan event that happens the entire world. But like, two years ago, Tyler could you and I have said where we were gonna be two years ago. Hell no, like, remove COVID Completely two years before that, I couldn't have told you where I was going to be. So the idea that I'm still gonna live in the same fucking place crazy like cow on

Tyler 16:33

the other side of the commitment coin, though, is that that is why I almost I do like giving people the opportunity to pay up front, I'm not a huge fan of discounting that that's actually part of where I went correct a little bit wrong by like having the six month I'll be like heavily or the little heavily discount more discounted than I would want it to be. But I would rather have people who commit for six months who pay up front, a small discount if you want to do it. But like, that real commitment is the money that has left your hand. And I do think people mistake the terms commitment and investment. And I think that's the issue is we talk about a 12 month commitment, a 12 month contract is a 12 month commitment. You're committing to invest $50 a month, $150,200 a month for 12 months, versus a real investment in your fitness is coming in and dropping in six months worth cash upfront. That's a real commitment. That's a real investment in this process. And when I mentioned that, I don't mean this purely as financially, this is how your clients have success. They need to be committed, they need to be invested. So it should hurt the ones that are good. I will tell you this 100% the clients of yours that will get the greatest results are the ones who spend the most money. Oh, every hands down. You're not You're under serving the people who you should be helping the most. And so with I mean, like Jesus, like Megan, one of our personal training coaches, she just runs through PT strictly. If I take a list of the people who have the three clients who have paid her the most money, they have lost 130 pounds. That's awesome in 14 months. That's fucking that's a lot of fucking weight for women. Like that's that's really really really incredible. And that is strictly a matter of investment. The people that come in and want to do one or two sessions a week and have always lofty goals but aren't committed and aren't really invested. They don't get as far as they need to. So on the other side of this, John, where are the trends at then with contracts? And we talked about what the client perception is and I think the moment as a gym owner you start talking. Okay, so this agrees that you can even bring out a 12 month contract. People hate it, hate it, hate it, hate it for all the reasons we talked about in the past with how fine print sucks and fine print gets people's guard up. Things need to be as transparent transparent as possible in 2023 it needs to be we've talked about the days of key fob fees and fucking what is the other word activation fees and the things that a lot of gyms do, just because they've always done them improvements, rounds, improvement fees, like or like even some was talking the other day about they in their contract run an annual be like inflation cost of living type increase, could you imagine sign up for a membership? And I'm telling you know, it's going to increase by 2% Every year, like what forever like Jesus fucking Christ? Can we just can it be 40 And then when it needs to be 45 Can you just you're just going to tell me this is gonna get I don't know the way the world works. But you have now like made this fucking sales process so complicated and stupid. And it's all about exceptions, and how can we sneak around behind the grab a little bit of extra money just to cover our ass? It's like, Well, I think you just talk to me like a person or send me a fucking email when the membership needs to go up, but to just decide in perpetuity that things are gonna go up year to year. I hate that too. But I think the trends you here's what you here's what you can do split tests this run ads if you want to, I don't fucking care or simply tell people when they come in and do half and half for all I care let people choose, do you want to commit if you if you're a place that requires a 12 month commitment? Okay, first off, you and I both know, a lot of people don't pay for 12 months, either. That's the amount of gyms and we and we work some franchise gyms that say this too, though, they also count those as their sales just again, I sold $15,000 yesterday. You know what I mean? It's like you sold $900. And, and I think a third of them are going to stop paying in two and a half months. So you're right back where you were anyways, whereas if you what if you just gave them the option to pay 30% more per month, and they just go month to month, you're probably still a net positive for your business. Now you're gonna lack the commitment. They may not be as invested. And they may not get results and may not stick with it. But let them pick the terms because what you do by forcing me to contract is you take away their ability to choose.

John Fairbanks 21:09

But there's a huge caveat here. And you know, because it's the consumer, everyone's mentality on Earth is, I guess, to spend 30% more a month, or I can spend 30% less for a contract and commit now. Because everyone, everyone will take whatever the lowest prices, right? This is the same psychology that doesn't tell me how much the car is. I don't care. What's my monthly payment? Yeah, now monthly payment, interest rates, but no care, no credit, bad credit, no credit, anything buys? Do you have a job? Do you make $2,000 a month, we got a car for you? Like, that's all that matters, all that I care about? Can I make the monthly payment work? And so go ahead, I don't want to interrupt the way. That's where

Tyler 21:58

I'm with you. But I think the word is out. It's always been that way. And I think that every gym owner now who has mentioned a 12 month contract is met with some shit. You know that if you if it's not you, if it's your salespeople, you know, the day, once you start talking about the details of that, you hate it and they hate it. And that's why gym owners hate sales. And when we try boxing people in like that, it sucks. And there's a better way that's there that's the big one is it doesn't need to be this and you're going to make more money, people are going to by the way, people will willingly choose to pay big chunks of money up front if you give them the choice.

John Fairbanks 22:31

That was the craziest thing Tyler did when we started working with the franchises, and it was kind of before we started getting more franchises in the Gear Academy and working with them in one on one hand and as private clients were those initial conversations where they were telling us their numbers. Oh, I was closing 90% Oh, my God, like this is insane. And then we kind of drilled this a little bit deeper. We're like, wait a second, like, these are fake fucking numbers. It is truly a fake business. And the way we uncovered that was through just asking questions, and getting there was one of the pain points was the amount of people that by month, two and a half their credit card balance, credit card balances, and then they never see him again. And so then it became like, why is that an issue though? Like you got your money, right? And like, oh, no, no, no, like, it's just, we're just, we just we view that we view the whole year as a point of the sale. I'm like, oh, like. So as soon as we said, well, what if we could just eliminate that completely. And instead, we're just gonna go to a point where if someone says they're going to spend 8000 or $6,000 with you, you just get all $6,000 upfront.

Tyler 23:47

And if they don't, then they fall into something that just works for them now, but at

John Fairbanks 23:51

at least that's the option, right? They have the option of doing it. And he's just like, oh, well, like that would be better. That would be better. It's like yeah, no fucking shit is going to be better. And so that's been the coolest thing to watch is watching that, like actually work, even though we know it works. And so that is where it gets there is a way to do this better. And that was what was crazy to me. Where am I? You realize and this is all it took it so had the same conversation with yourself mentally as well, which is you're you're fooling yourself if you think the only thing that you're putting in front of someone to buy is that monthly membership that is been discounted because it's a 12 month agreement or a six month agreement or whatever, it's contract based. And you allow somebody to buy that membership. If they're the person, depending on the car that they're driving the job that they have, how they hold themselves the style of buyer that they are the fact that they buy, you know, they always get avocado added to their fucking Chipotle burrito, like fill in the blank, right? Those consumers would have spent 10 times more money with you at the point of sale, if you gave them the opportunity to, and you just don't, so you don't get it. So you would have gotten more money, which means over the lifetime value of that single customer, your guacamole buying individuals is that they will have spent more money with you over their entire lifespan, but you just choose to have them by the cheapest possible thing, because that's all that you have available.

Tyler 25:30

The word will get out about the contracts. The worst part is then that you don't want people last because I'm telling you the only thing I hear when I talk to my 24 hour gyms. Only thing I hear is complaints about contracts, and the memberships and this bullshit, whatever it is, maybe they didn't really like to train whatever nobody's there, like the gym was a dump. Right? You gotta see it first, like they did pick. So nobody signed up sight unseen. So nobody can act like they were duped or didn't like it or whatever, it's that they stopped going. That's it. So but you're allowing them to just point to the contract as the issue and when they're talking about the contract, and they're not talking about the service facility that I'm talking about the things they liked, it's a huge loss. And I think the solution, like John said, is giving them a choice. So here's what it is, if you have contracts, right now you want to lock people in, listen, I'm with it, like I get it, I totally get it. But I just would like you to try. You're not gonna lock people in on contracts, if you're selling personal training, this is where a lot of these other places get over, it gets really convoluted, you're not going to get somebody to commit to three days a week personal training, plus, they didn't happen. So we've sold them. But like those are, those are your rare, big, big, big ticket stuff for people who are going to commit to a year of that and actually see it through. It's just rare, some have that level of commitment, financial upfront forever, they'll do it. But the thing is, when you I just want you to try to sell this offer stack format, like John and I talk about where someone comes in, and they want to choose a membership, let them choose a higher level of service, just put something in front of them with four different tiers have it be you know, and have the top one be three months of it, all your stuff three months upfront, though, and you're gonna see how many people actually pull the trigger on that. And that will surprise you if that top option is just a 24 hour gym, nutrition coaching, some programming workouts, you know, a little package workout bundle, maybe one personal training session to get them on board. And then three months up front of the membership that's like a base top like a solid top tier for low level of investment for you in the gym. But you're gonna see it when people choose that they will, it will be successful, lots of people will also want that. And that's the most important thing, peel some of those options opportunities back and at least you're gonna have people choosing to still spend two to six times as much as up for the first month as they were they're basically paying for two to six months worth of this base level contract that you would normally try to lock him in. Because that's the worst part with these contracts is they are all cookie cutter. They're not tired. There's not other services bundled in. So all you're doing is making it about the transaction and not about the client what their goals are and what they want. And it's a huge swing and a miss so I just that piece it's bad for your reputation. I don't want to go too far. There was a gym around that runs a fee for good guys by watching the show, but they run fees. And we actually saw some of our gyms do the same stuff. They were on key fob fees and, and all that stuff that we're getting to now that it's been removed from their intake process. And the membership rate just reflects what it needs, what it should be, instead of trying to bake in a bunch of asterisks, you know, at the bottom of stuff. But as Jim, we know that it was like $40 or $37. What was it like equipment renovation fee or something like that, that comes out every year? And it's like, oh, we don't lose any members because of it. That's not the point. The point is that it sucks. Yeah, the point is, it might be 15 to $20,000 for your business in a big chunk. And that's great. But that sucks. That's it just sucks and there's one of the things that I've heard about putting this I don't know how to put this any other way. Listen to Mobb Deep when you're younger, it's there ain't no such things as halfway crooks, dude. And it's a thing where I see it when I start going into business with people. Business partners like John and I with any other business we get involved with any businesses I've worked with in the past, just red flags like manna, some crooked shit, you don't see that. You just don't want to be better than that. That's where I get with all these little things. And some people by the way, it's not a malicious decision. It's just these are systems that were here and but those are little red flags that happen. And I think that people have less tolerance for that and if their contracts feel crooked a little bit it feels like you're boxing me. Hiding a fee in a contract feels shady right. And again, there ain't no such thing as halfway crooks. You're Either you either are or you aren't. And so like, if you're not, you got it, you got to transcend that thought process, you have to become more transparent. And if you can't sell your membership for three to $5 more per month, $2.90 more for that one, and let's say Keifa fees and activation fees that get they get waived halftime, let's just talk a five to $6 a month total more, if you can't get new business off of that, then all of your shit is broken completely, you should absolutely be able to support that every business should be able to port five or $6 more, especially for what this does to simplifying the the actual buying process. I can't imagine any other. This is you're signing up for a gym called convoluted is going to rent a center to buy Jordans. Just like what are we doing here? Can I just, you know, it's not so. But again, that's you as you look through this process in your business? Like how can I be more transparent? Maybe that's kind of the theme of this episode is how can I, how can I just have it all be out there and have it all make sense? Have it all be a catch all it not catch all like each service needs to just be each agreement that someone gets into the expectations should be clear. And as simple as possible? Well,

John Fairbanks 31:18

What do we do so here's the number one thing that we do with every single, every single private client that we've ever worked with ever is, very rarely does any gym owner or any business owner need more complexity in their lives? Because as you build and do more shit, and you're the only one doing the best that you goddamn Can you infuse complexity naturally. Because you gotta figure it out. Now you're balancing this and it's like, well, if we just duct tape this that we don't have to worry about like it is so much of that. So it's as complex as it ever needs to become. And so it doesn't matter doesn't matter whether you are a franchise owner, or if you're a brand new fucking garage, gym guy, and you're just getting off the ground, or you just bought your first facility, you're going through the doors, right? Everybody starts in the same place, which is we simplify your shit. And if we simplify it, it's oftentimes I mean, I would say 100% of the time, gym owners have not looked at their shit, the way that we want to look at it with them, and say, Why do you do that? Why is it this way? Oh, yeah. So honestly, I don't think I've looked at what I haven't looked at before. But it's Well, I'm I haven't thought about what it costs you.

Tyler 32:35

What did somebody else think when they heard that the first time?

John Fairbanks 32:38

And as we work on this simplification process, we start to unravel and uncover a lot of these things. And very quickly, we find, well, we don't need it to be that way. Why do you have these fees here? Or why do you have this? Why is this text down here? Why? Why do you have words here? Why? Why is it this way? It seems convoluted like the actual exchange of money, you're making it hard for people to give you dollars. And immediately it just becomes there's almost nothing that has to stay as it is. And 100% of the time, it's like, oh, man, you know, it's and I 100% of the time it is we should have looked at this. You know what, I felt that, but it wasn't until you all said something, you didn't say something about it. And finally, it was like, You know what, that's all I need, I needed the push, because I felt like there was something wrong here. And it is this cadence that you start to build and we build with our clients where it's, you have to look at your stuff on a regular cadence on a quarterly cadence twice a year, once a year, you have to look at the stuff because the problem is that that $35 equipment fee that may be something that is grandfathered in, comes in or

Tyler 33:50

needs it. It's also great to have that money in a big chunk. But like there's other ways to do that if your price just is higher do a universal price raise and it may not have just set that money in escrow. So let's have a set aside somewhere so that you only access it once a year or at least an emergency this ends up being your fund it's something but it's got to be better than that because the work by the way the thing that you Let's go the other way with this job where do surprise fees like that who do those people hurt the worst? Would a 12 month contract hurt the worst? The poor people are the people who live in a city with the least amount of people with the least money, that's it and so it's of no consequence for any of these other people who have the money to go month to month or to choose it doesn't matter. It doesn't move the needle with them at all. So it's like you just kind of baking in remembering a system is what it does not what it says it does. So what does this do? Right? It's just like it reminds me of that type of stuff, the fine print language. It reminds me of checking account late fees and shit like this the way it's just so predatory. whereas if you're just somebody who has no money, or even, like minimum balance requirements, sorry, but a person who is going to have trouble keeping more than $50 in their checking account from time to time, and they get under, you're going to charge them a $20 fee. Like, that's fucking crazy. And you should go to jail. Or worse. Yeah, not even jail, you should just have to answer to that when that person shows up at your door. Because I'll tell you the way it works for a lot of these banks and things like this, you take you drag those people too far. Their solution to that problem is arson. Remember that, so fucking just play the game fucking on the level, that's all I ask this is, this is one of those fundamental things is Is this more complicated needs to be in, you know, do when you're talking to someone through sale. Even worse, someone who wants to sign up someone, and you just kind of have to keep giving them this information that they don't like, you're like, oh, oh, the 12 months, and then, and then this and then there's this fee, and then this and then if you're under this, this and then. And then. But if you're, if your spouse joins, they get this, right, and you're all these convoluted different tiers of overly discounted, blah, blah, blah, fucking fuck all of that. Like, I just, it's all gotta go, you need to simplify it. If you can streamline your stuff to the point where you can make a sale via like some head nods and pointing. And like just your credit card. Like that, it should be that transparent. And then everything else can be expectations of gym behavior, and will kick you out if you do this. And we won't kick you out. If you do that. That's all that after. But anything that's got to be baked into that contract smells nefarious to me, it always does. And if it's an even if it's not, like John said, it just exists as a solution to a problem. solution to a problem that once existed that you could solve in this way. And it didn't bother people. But we used to when people got sick, just do bloodletting and cut off limbs and shit. You know what I mean? And we used to if a girl was like, if a woman was too sexy, we'd just burn her at the stake. But you know what, we've got better ways to do it to figure these things out. We don't do that anymore. And that's where I'm at with contracts. It's like, Hey, man, if you can sell them and do them, great. I don't know the place. I don't know the place where I would do it. I guess to be honest with you, I don't know where I would do a 12 month contract in fitness business, I don't know,

John Fairbanks 37:24

to still take the minimum payment that I don't understand. Yeah, just to like, because there's another piece. And I'd be very quick, because we're getting close to the end here. But the other piece that I don't understand is you are completely allowing someone that buys something and pays like the minimum amount for like 12 months. You are missing the opportunity for them to reinvest in themselves. Especially if somebody's like a personal training client. Like they have to be a very unique person, a very unique situation, even if they're going to pay even if they're going to pay in full for the year for personal training, and they drop all that money all at once. Like the effort what you now have just done to yourself to do that is Yeah, it's great to get a bunch of fucking money up front. But you now have to be a goddamn ace. When it comes to getting them psychologically reinvested in wanting to do the next thing and staying on their goals or staying on their targets. Like it is the same reason why it's probably good. Like, why would you ever buy four pairs of shoes at the beginning of the year? Unless there's a fucking sale? Yeah, like most folks are gonna, they're gonna buy a pair, and then a little bit later to win because now we're gonna go fucking rock climbing or they're gonna do some of their new shit. They'll buy some more equipment, they'll buy some more stuff that allows them to reinvest, reinvest, reinvest, like it's just a very unique thing. To be able to just go in and pay minimum to not allow people to have the opportunity to reinvest in new goals and new targets.

Tyler 38:57

You take that away from them, because you take away the excitement of continuing to move on. Now this isn't to say that your payments should be not recurring. No, there shouldn't be in the agreement that is signed that you need notice before cancellation, however you do that I'm okay with too. I used to do like two weeks before the billing cycles, like you got to me five days before the end of your thing. It really depended on how much I liked you. Whether or not I would do that beforehand. And if some people were mad, I would just send them Sure thing I'll get it rolled in after this next payment to the day was the deadline. We're all good to go. And sometimes they get pissy and you make it right. And sometimes they don't. But that's always why again, the moment I was introducing those types of caveats, the moment I'm having to enforce on either side of this, you're a fucking dickhead and your business, then you know what I mean? You're just like doing it. I don't know. You're just you're just not doing it. Right. There's, I've worked with people in business whose sole goal is to get things right. It really is. What's the right way for us to handle this? Just what is right and I think that there's not enough of that. I've worked with a lot of people who are only what is right for me, what is right for me, what is right for me? I don't give a shit about these people fuck these, but I've worked with some people who care the least, about the people that they work with. ever worked for them, work with them, people who they serve, they don't give a shit about them at all. Say those people exist too. So which one are you? And there ain't no such things as halfway crooks, guys. Thanks for listening, everybody. We'll see you next week. Don't be a crook figure out but figure out streamline your stuff. That's what I want you to do. Can I make this less complicated? Can I make this less of putting how many of these little barriers go to talk to people you should be doing sales you should be talking to people. When things come up, are you aware of how people are responding when you start talking about commitments, contracts, fees, all this stuff? Or can we just flat rate I guess that's kind of where this sums up for me is I want a flat rate and I want people to choose along a continuum of flat rates. That's what I want to take the good with the bad. That's the name of the game for me. So thanks for listening, streamline your shit. go to gym owners Get on the waiting list for the gear Academy so we get to rockin and rollin by the summer. You want to make big changes in your business from marketing to running ads. We got some bottles now where we've got guys coming in and we're helping set up their content with full AD stuff so you can kind of level up within the Gear Academy and start running ads with our dude who is helping guys kill it. So let's get your offer in place. Let's get your shit less complicated. Let's get your business running smoothly and ethically in a way that's going to serve you and your clients and then start really really scaling things up. So that's what we got within the gear Academy. We got a bunch of exciting shit coming up in the Facebook group. Make us in just in the description there below. Follow the show at the gym owners podcast and Instagram follow me at Tyler Elphinstone. Tyler eff iron stone and follow John

John Fairbanks 41:51

at J banks f L on Instagram.

Tyler 41:54

Groovy. Thanks for listening, everybody. We'll see you next week.

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