The Gym Owners Blog/Podcast/LA Fitness Busted for Misleading Contract Sales

LA Fitness Busted for Misleading Contract Sales

Saturday, December 16, 2023



crossfit gyms, gym, people, personal trainer, contracts, weeks, commit, business, year, month, clients, training, fitness, john, pay, money, trainer, problem


  • LA Fitness contracts and sales practices. (0:01)
  • Deceptive sales tactics in the fitness industry. (7:00)
  • Fitness contracts and commitment. (10:40)
  • Personal training industry standards and certification. (13:47)
  • Personal training and risk vs reward in exercise selection. (19:12)
  • Ethical sales practices in the fitness industry. (23:28)
  • Fitness industry contracts and payment methods. (27:31)
  • Commitment-based membership models in the fitness industry. (35:05)
  • ​CrossFit gyms and personalized training. (42:05)
  • ​Gym ownership mistakes and revenue strategies. (46:58)


Tyler 00:01

Ladies and gentlemen, welcome to this week's episode chimeras podcast. I'm your host Tyler stone of John Fairbanks has gone down.

John Fairbanks 00:07

I'm pretty fired up today, Tyler. I'm pretty pumped.

Tyler 00:10

I don't know how that came in on your guys' end, but it sounded like I just talked to a frickin robot. What perfect. Oh, no. Let's do it again. How are you doing, John? I

John Fairbanks 00:19

i am pretty fired up Tyler and a non robot voice.

Tyler 00:22

Very good. Very good. Before we get started, let's make sure you guys are following us on all the things. Make sure you follow the show at the gym owners podcasts on Instagram. Make sure you get in the Facebook group, the gym owners revolution, links in the description for all of the all the show episodes should be in their sticky right there. Make sure you go to Jim was If you're interested in working with us directly. If you have any questions about services that we do consulting services, business planning etc. For your gym, make sure you can just shoot me or John a message directly at Tyler Elphinstone on Instagram or John is Jay banks. FL. You can also send us an email at the dudes at Hack Your Let's get into it. John, I was sent this article by you I believe was the first one to send it to me. I've since gotten it twice from other people as well. Yeah. And that this article is specifically the same as yours, this concept here. LA Fitness is in some hot water. Yeah, the problem is, they're not doing anything that I don't think anyone expects him to do, like I don't understand. So LA Fitness huge franchise Correct. Not truly changed. But it's franchises I believe, LA Fitness gyms kind of fucking rule, I don't have much to say my experiences in them have been great. I've been in LA Fitness gyms and about three different cities. And they've all been a wonderful time to drop into nice facilities has all the stuff that I need, if I had to, if I had to open a new gym with a new model, that would be kind of the floor plan that I would kind of like to go with and then I will do some other things. But boy, have they caught some shit here for basically misleading people into signing them up for long term contracts. Now, before I get into the details here, I want to make sure we establish John and I's stance on the contract. I don't have a problem with somebody paying a long term contract for a gym membership, even if they want to, you're gonna be there for a year or two years and you want to pay ahead, go for it. Do I think that it's right, probably for a gym to force. Anyone who wants to join in doing that? I don't know. I don't like it. I wouldn't go to my gym, but I don't. I don't hate it. If it's just for your membership, right? I don't. It's whatever people can take it or leave it. Now what I would recommend though, right? Let's just say, John, let's do simple numbers, if your memberships are $100 a month, right? And your goal is to make sure that you get 12 months or whatever out of these contracts, you're obviously if you need to get $1,200 per year out of this client for it to work for your business, then the contract is the only way to do it. Is that correct? Is that right? I guess that's right, except the easiest. Yeah, but what if someone wants to join your gym and doesn't want to pay the contract? What does that represent to you as a gym owner risk risk of them leaving, right, it's risk that they don't stay the full 12 months, then fucking charge more for someone that wants to go month to month, I just don't understand why that has to be something we completely box people into. But that is not what this is either. This is like some kind of aggressive sales thing pushing people into personal training. So bigger ticket stuff, running anywhere from 500 bucks a month, 2000 bucks a month. And you're getting them to sign on the dotted lines and committing for a full year, sometimes two years. And these are just aggressive salespeople that are coming in getting people locked into this. And the contractual agreements, as I'm reading them here, are if you want to cancel early, you can, but you just have to pay 50% Of the remaining balance. And there's a lot of people on here that are were elderly, not really aware of what's going on, coming in and paying like getting locked into like $6,000 contracts. And they get into some, you know, personal trainers that maybe they don't like. That's the other thing, man that type of relationship three times a week with a personal trainer. And if you have an open book on the methodology that your trainers can use Jesus Christ, they could just not be for you. Like I could go in and just hire a personal trainer. John, what are the odds of that personal trainer, I'm not like being someone that I want coaching me 10% chance that it works probably for me because I have some specifics that I want

John Fairbanks 04:39

for a year, for a year. You know, I mean, like it's got to be like, Wait, it's got to be lower than 10%. The odds that I want to continue to work with that same person for a year, and then that person's capable of training me. And what's crazy too, as you dig into it, it's not just one. It's not like just one location and it's not just recently so it is kind of like you can see that this is like a problem, an underlying problem that exists across like, multiple locations over when I dug into it like, over well over like the last decade. And now or one

Tyler 05:13

of the things here that's being said is this is where it gets even more misleading already. Fundamentally, I don't like that concept, because I don't, I believe First off, if I believed the gym was doing this, for the sake of client of what the thing I'm about to pitch, which is clients need to commit, and they need to be invested in order to get results in the long run. If I really believed that that's what LA Fitness was doing here, I'd be like, okay, you know, what they're executing on a fundamental principle that I believe in, in regards to the fitness industry, is the success of clients requires commitment, investment, consistency, et cetera, I believe there is a 0% chance that that's why LA Fitness is doing this, it's just two things, one, guarantee a little bit of money to those contracts now have value and that value, we started, we start talking about fake business, that value is boom, now I sold $7,000 worth of personal training today, not yet, or two months before somebody quits, and then they move on forever. Or they default on the thing or they get a new debit card, and we never see them again, and we turn them over to collections. This is a thing that happens a lot in these larger scale businesses is they just make up they make these contracts. And then they use them as an asset and they go in and borrow money against that asset. So they can put up another location or put money down on real estate. And so it just starts stuffing a portfolio with fake money. And then you wonder why these things end up going tits up after, you know, every decade or so there's a whole bunch of closures. And these guys just ride the ebbs and flows of the real estate market. And they act like that's the thing they're completely handcuffed to. Whereas the ones that don't play that game, by the way, have been locked into a solid real estate deal since before 2008. And they haven't been playing this fucking fake business game. And they're forced because it works.

John Fairbanks 07:00

It's awesome. When you think about it, conceptually, it always is starting off on the wrong foot. Because if I'm going to go month, a month, it would be my most expensive option that I could buy. And so even if we're going to talk about personal training, which this is that fundamental mistake of like how they're applying a concept that could be used successfully for basement gym memberships, and now applying it to a higher service based thing, I guarantee we're going to talk about like the problems, the obvious problems that but it is, then why even present a year or two year option, which is even more insane. For personal training, it's just to get the price lower for you to be able to tell somebody like well, it's you know, it's $1,000 a month,

Tyler 07:42

you get this,

John Fairbanks 07:44

it's only $400 a month, if you commit for two years, and it's like it immediately has nothing to do with any of the things that we talked about like that person actually being able to achieve shit. And it's just, well, what's the cheapest price that I could get them locked in for? I mean, it's like, think about like two year phone contracts. Yeah, think about that. Like think about some of these things like an actual service or whatever that you're paying, right? It's like, there are elements of this that are so poor and so awful. That no shit they had to use like cloak and dagger like, Well, no, it's the first month, it's all you have to pay, you can cancel at any time. And this

Tyler 08:20

is what has happened here. And this is what these allegations are is that now you're getting salespeople who are not, they're not the trainers, right? They're salespeople. And I'm probably okay if your business is on that scale to having your salespeople be salespeople only. But to be honest with you, when you're talking to long term relationship, you're talking three times a week, you're talking, you're talking 250 plus hours a year, the two people are going to have to spend together, I'm not letting some salesperson sell the rights to 150 hours of my time, for whatever amount of money and then force me to spend it with somebody that they picked. Now, like the thing it does have to work. So I like the idea of a salesperson coming in to facilitate a conversation. But I really, really think there should be some more leeway and who the trainer is and what the type of training is going to be like. But now when this person here and there's been multiple people have come forward to say the same thing that this is okay, well, we'll make a one time exception for you and we'll just let you try this to solve that problem. We'll let you try it out for a month. So they charged him for the first month and then what happens in the second month the payment just keeps going, the third month payment just keeps going. And next thing you know is this guy, this person is paying five 600 bucks a month out of pocket forever. And if he wants to have the payment stop, he's got to spend three grand to shut it down. And that's bullshit. I think it's pretty disingenuous. I think it makes the industry look really bad. And it is exactly what it looks like. I don't understand how anybody can go into this and go this is fine. This is I don't like most people offering a year like to be locked in for a year. That's like a big thing for someone who You know, is already committed to your business. Right? I'm gonna be here, I'll pay for the whole year upfront, it's kind of a way to get some cash flow. Very, I wouldn't commit to any gym that I'm at, for 12 months to not go somewhere else and not want to like, I just I don't get it. And I'm sure there's clauses if you move away, and you give us a new address 15 miles away. But my gripe with this is it's not what it's for. It's not for the success of the members it is. It simply is fake business. That's the problem. It's fake business under the guise of like, well, this is really this is fundamental solid business principles, we need to get these assets secured, we need to make some guarantees. And then we can leverage this and this. And it's not, it's just not because you're completely looking away from the actual transaction that is played is taking place, this person is using your facility and going to receive the benefits, hopefully, some of the services that your service providers can offer, in exchange for their expertise, and hopefully some of the benefits that they're able to get, and not giving them an opt out if they don't like the arrangement, or they don't under like to have to do that all up front. This isn't buying a car. This is something where this person needs to commit to this every day, there's effort going in and getting in your car that you just bought and driving it to work, it's not effort, it's not a thing. So once a car salesman gets somebody locked in and gets the commitment, it just is what it is. But if you're looking people into long term big ticket contracts, with in fitness, especially with personal training involved, like there's one side of it is maybe that makes them more committed, they're locked in, it makes them likely to show up. Sure. But also know that you can't just by that, and therefore you're setting yourself up for a lot of very bad situations with very unhappy people who by the way, maybe just didn't show up and weren't going to fucking do it. And that's the reality of the industry. But then don't put yourself in a situation as a business, to where now you're the bad guy for that. That's the biggest problem I love. Most of all my clients have to commit for eight to 12 weeks, I won't fucking deal with anybody who's not paying ahead for that time, right and even close and now I won't work with anybody who is not also following a nutrition plan, whether it's mine or someone else's. If you do not have a plan that you are following Do not waste any of our fucking time in the gym. I will not do it now. That eight weeks, 12 weeks, they don't like it, they can move on. I don't get their results, they can move on. They don't personally like me, they can move on, they want to take up Jazzercise instead they can move on, they want to go to the body pump at the YMCA, they can move on, they want to take up CrossFit, they get busy, their leg falls off, something fucking crazy happens, they can move on. And I'm not the bad guy, the relationship ended for whatever reason, and you can amicably mend an ending, what you cannot do is drag money out of their fucking pocket for a year or force them to interact with you for a year when they hate it's It's brutal. There's no way that I'd be willing to bet John that 80% of those contracts are not seen to the end, oh, spit, that data will never make

John Fairbanks 13:12

public. And there's fundamental basic psychology like I would be hard pressed to find any research at all, that says that people psychologically when they make a commitment are going to be able to unlike fully understand and have that level of commitment, continue to benefit them psychologically over the course of a year. You know, I'm saying the idea of like, the reason the importance of having people reinvest and be reinvigorated and have targets or have goals or have these things. Nothing No one says, so what you do is you come up with an idea for a year, and then just be locked into it like that. Because like everyone knows, you have to recommit, whether it's emotionally or psychologically, or whatever it is, like about every 12 weeks, every 10 to 12 weeks, humans just cannot stay engaged for much longer than that. And that's probably like your most prolific people that are engaged is being able to do that kind

Tyler 14:17

of things. Most people in most habits and this is thing that we've done with my my wife has done this quite a bit with her now she kind of uses this in her online coaching process as well as you know, it takes about three weeks in which most people will give up completely on almost anything is about three weeks or less. Yeah. 21 days or so. Then it takes about three months for you to kind of fully integrate that thing into your life. So if you can make it past three weeks, and then you can just bite down for three months. Then you know, is it either in or is it out you're going to try something new whether it's baking or jiu jitsu or boxing or running or lifting weights or You know, going keto, or whatever, whatever thing you're trying to do, if you don't give it three months, you're not giving it a chance. Yeah. Now, most people won't even get in close. So that's why I set that eight to 12 weeks is that mark where I want them to commit for that, because that is giving this a chance. Anything beyond that point is about me just Garin making some guarantees on the money side of things that never worked out for me or for you. It's that I don't, I just don't understand, I know why they do it. And I'm telling you,

John Fairbanks 15:27

like capital T, like the boss, private equity firm that owns the fucking location is that do not believe

Tyler 15:34

that you as a gym owner who kind of if you've been listening, who's tried to do things the right way, I don't believe that that is the way that you need to be doing.

John Fairbanks 15:42

Can we also talk about expertise on this idea to like, fundamentally, God love you, LA Fitness and 24 Hour Fitness and all those very, very similar models. But I come on, like the expertise of the personal trainers that are at these facilities. Like, if you happen to be one, you know, what we're like, what I'm calling out is when you look to your left and your right, and you see colleagues that are in your spots, the, I don't know, 19 year old or whoever the fuck has been there that like is in this is the equivalent like a puppy mill, like these are not so the idea that you can have somebody be locked in with a personal trainer for a year at a place that fundamentally does not require the same level of it. We're not talking about CrossFit gyms and personal training studios, or PT facilities that have to like personal trainers are not equal. No.

Tyler 16:44

And this isn't an LA Fitness thing, either. By the way, this is the place that I've noticed the most in 24 hour gyms. And this is why I believe that identify and leveling up that skill set, being a person who is good, who wants to be a professional, and show up at any of these 24 hour facilities and be a personal trainer, you immediately rise to the top and your reputation will precede you everywhere that you go, if you just fucking behave professionally. The people that are around some of these places that I've coached at Jesus Christ, you show up and act like an adult and know what you're talking about and be respectful and on time and fucking, you know, look the goddamn part. They immediately look back at any of the other trainers that they had there and go, Man, whatever the fuck they've been doing here. And it's the truth. Yeah, and then come back around and coach every once in a while and I gotta go. Literally, I'm at a point where every once in a while I'll see a personal trainer in a facility that I'm at. And I'll want to make sure that everybody knows that I don't technically work for this place that I work for myself, I work for my clients that this person and I are not on the same level. We do not work. We're not employed by the same fucking thing. These people are idiots. They're unprofessional. They don't know shit. They're the goddamn worst. And they're a plague on the industry. And the problem is, is So the worst thing about becoming a personal trainer is that it's so easy to do it

John Fairbanks 18:09

when you're on the same, and you're a personal trainer, trainer, or the future

Tyler 18:13

Being a personal trainer as an industry is so easy to become one. And I think that right now what we're missing is people in this age group right now 18 to 25 years olds, pursuing that as a career. Because you get kids like to come out of school and go, you know, obviously, this is a different type of person, but I'm gonna go to tech school and I'm gonna come out and I'm going to be an electrician, and I'm gonna make $25 An hour and within five years, I'll be making 3035 bucks and I was like, go get your NASM certification. If you've been training for 567 years and you can behave professionally you've been listening to this show. There's no reason you can't take home $60 An hour starting right fucking now and be completely and totally self employed and call your shots and choose your clients who build your thing right now right fucking now. And there's so many that's but that's the biggest issue. John, how many personal trainers do you know that are under the age of 30? What do you see out there? lotto Oh, do you do I don't see hardly any but that might be my demographic right?

John Fairbanks 19:12

And where your ads

Tyler 19:14

are fucking washed up, dude. They're like and don't lift and I don't. I don't get it. And they're not fitness people hardly see proposers.

John Fairbanks 19:22

What I see that's bad. Right? What you're seeing is bad. What I'm seeing is because it was won by a bunch of universities, okay? And because we're by so many

Tyler 19:34

to get spit out and think they know everything that's almost and

John Fairbanks 19:36

It's terrible because I'll be sitting somewhere right? Like totally non fitness related at a coffee shop or whatever, or some fucking place where everybody can sit and kind of hang out and chat. And I'll just be like, oh, you know, I'm a personal trainer and I work at this facility and then I'll hear somebody be like, well, you know, I have whatever I want to fill in the blank. I have lower back pain or, or whatever the thing is, I want to be able to get stuff longer. It's like what would you think about that? And then I listen. And it's just like, I have to leave. Yeah, I have to leave right now. I've put my headphones in. I have to stop listening. Because it's like, oh, you have no idea what you're talking about. But boy, you sound foolish shit. Like it's the equivalent of trying to sell cars. And it's your first month on the lot, and you're just overselling your position. And it'd be like to try and convince everybody,

Tyler 20:24

everybody exactly what size every engine is, and realize that nobody gives a fuck,

John Fairbanks 20:28

nobody gives a fuck. And that's and it is right. And so that is where it is just anybody that does No, that's the problem. And here's the problem. The problem is, the kid is like that kid, right? That example, for sure. That dude is in his early 20s. And he's passionate about it. Like he would love to have that beat. But there's no one that's mentoring that poor bastard, because there are really good gyms that are around that do have good owners? Or do you have good trainers that for sure, could foster? Well,

Tyler 20:57

Let's talk about one component of this, I don't want to derail too much into this principle. And maybe we'll go further on to this in a different episode. But the main component for the success of your clients, and I think your success as a personal trainer, as a coach in general, is there's one thing and one thing that I value more than anything else. And that is risk versus reward. That is in exercise selection that is in your training methodology that is in intensity this is but someone that comes in with a reasonable risk versus reward. What's the word calculation that they do? I can respect the exercises they choose for certain people and why they do certain people's goals, I can respect the intensity with which they go about it. I have clients who have not been able to squat to gradually work with some sandbags and things and then I do throw a barbell on them every once in a while because it's fucking you know what they're in a gym, it looks like what other people do it and they want to fit in and do the thing and it kind of rules. We're not just doing all that immediately, because I'm not trying to make them conform to that thing originally, I want them to get but I'm not going to have them squat a fucking PVC pipe. So we can get the technique there. And then they don't get any work done. Right, right. risk versus reward, I'm not going to take all the risks for all the reward. Right, and I'm not gonna, I'm not gonna I'm not going to avoid all risks and not get any reward either. But that calculation I can see kind of all the way through, there's some general stuff about movement stuff that will make me crazy. I've listened to a guy tell a kid, a personal trainer, to tell a child how to do farmer's carries. And His thing was, you're gonna want to shrug your shoulders up to your ears, you're gonna squeeze your shoulder blades back behind and stick your chest out. And I'm like, watching this kid just like, fuck up his neck and shoulders and also suck at carrying. Like, is the worst way to go about it. But is that gonna hurt them? No, probably not. So I'm kind of it's stupid. And now that kid doesn't know how to do that thing ever. And being wrong is one thing but being wrong about something that's relatively safe, I whatever. But I think if you don't know much, keep things simple. I think that that calculation, I think, is where I can respect somebody when they come in right away. Someone wants to come in and do a bunch of clever shit. Makes me nuts. I'm all about functional training. And, but there's nothing easier if you're a new trainer, being in a facility like a 24 hour gym. So you've got machines, man, give them work. Give them sensible work, focus on body parts, do enough functional stuff to make them be a regular human but get him some results. Give them you gotta give them the things they need wrapped up in the cheese or bread like you would a dog wrapped up wrapped up in the things they want. That's just the way personal training is. You know, I got a kid who's got to do a lot of things. But you know, we do once a week, we always benchpress and we break down hard about it. Like I want him to spike in the chalk flexing in the mirror after sets. That's what it's about, man. Let's do it. Yeah, so not to derail that completely. But these facilities have this issue now. All of them do. And it is a big problem because they lack expertise. Generally, the impression isn't good. Because unless you see one of these contracts all the way to its fruition, you're going to not like the trainer at some point because you stopped and you're gonna not like the business. And that's why these businesses kind of just sit large and loom over these markets. And they just exist for sheer scale. That's really all it is. But this practice of locking people into these long term contracts like this, I hate it as an industry I am all about offering them. I'm even all about giving a little bit of a discount if someone wants to all about if you if someone wants to commit for that long let's talk but that would literally be John in my offer stack what it would be because my offer stacks will still break down to every four weeks payments or whatever it'll be. I'll be commitment required at the very bottom who would say you know, 12 month commitment It's available for free to ask about 12 month commitments for discount. Yeah, if someone's interested in that we'll go there. But again, it's about choice, not coercion. And I think that that's the thing if you're boxing someone into a contract, beyond the point that beyond these timeframes that they're willing to understand. You're, you're now pushing them into something. And that's that that's the concept of the upsell. Now, you've pushed them up, and you've taken them further than they want to go. And now you're doing shitty shady sales bullshit, which does not work in an industry where people have to recommit to you every day, every morning when they eat, right every day when they go to the gym and work hard every night when they get home, and they need to get some decent sleep. They gotta commit to their health. But every fucking day, what if you suck, dude? Or even worse? What if you're the salesman or you're a good salesman, and you're sending them off to a personal trainer? This sucks. That sucks, too. But they don't like the gym. John, what if the commutes a little bit further than they thought they could deal with? It is what it is. And you cannot be forceful in this at all. And this is the biggest in sales in fitness. I think that's the biggest issue. We've seen some of the hormones, the fucking brilliant sales, sales techniques that they talked about, which is like, my $200,000 Hummers outside, if I say get give me $10,000 You can have it you'd find $10,000 You'd call your mom, you'd borrow it from your from so and so you'd, you'd go sell your car to get it on. Why? Well, because the value is there. Okay, you you you do that with your fucking silly little bait and switch pretend it's free fucking challenge offers that you didn't watch dumb Fox had been running for decade. Like fuck all that. Okay, that is not reality. That is not that is not how those works with real people getting real results and fitness, that's been some bait and switch bait and switch scumbags that are being predatory on the entire industry. That's what that is. So to come in, and I have someone who comes in and I say, well, 700 bucks a month, you got to commit for the whole year. And then I just don't know if I can afford that. Well, once you go fucking put it on your credit card, just put it all on your credit card, just go into debt for it. Because it's quite worth it. It's that's not the way this fucking works. And that's not the way this industry works. It's just not so applying that the shady scumbags sales techniques from every other online industry. You're better than that, you're just better than that. And you have to be a human focus industry, not a transaction focused industry.

John Fairbanks 27:30

And I think it's really important for you guys that are listening, none of you are going to be private equity firm folks that are running multiple locations, right? That's not you. But you have to respect the fact that oh, yeah, what are those problems? Yeah, right. They are competitors, if they are in that industry that you are in? What is it that makes them so shitty? And how are you very clearly calling out the fact that that's not the shit that you play? Because the fact is, if people have got burned by this type of shit in the past, the same way that I've worked with a personal trainer before, and he was the guy that is in your same gym that you train with who you hate. Well, guess what if I've trained with him, and he was a fucking joke, and I didn't like it, that means personal trainers, equal charlatans, snake oil salesmen, fucking chiropractors, like, it just is like, now that's everybody. So the issue is now you have to handle whatever that baggage is that somebody else has, because of poor experiences in the industry. So you have to be able to know you, like, it's not enough to be like, well, that's not us. And they'll know it because they'll see it and feel the difference. It's like some of these elements, you have to be able to clearly articulate why you are not that and, and if you're say, a CrossFit gym, as a CrossFit gym, you've had to be able to justify why you are quite literally, sometimes 100 times more expensive than another gym that's in your area that is one of those 10x where

Tyler 29:02

Planet Fitness is, so you gotta go.

John Fairbanks 29:07

So you should be used to that. And I think that that's an important element of it is you have to kind of know okay, what shitty and then don't get tricked into thinking like, maybe we should be able to to have contracts like alright, but why do they have to? Like, what game are they playing? And what game are you playing?

Tyler 29:20

Now there's some other value. Let's talk, let's talk about the soul contracts. So to do a two year contract is on the far and far stream that's in the realm of things I think are bullshit. If your policy requires a one or two year contract, I think that sucks. By the way, unless you're booked, it's so completely full. And I don't need people in and the only people that's, I guess you wanna do that math, that's fine. But then, at that point, I'd rather if you're actually trying to have an impact in your community and you're full, it's time to replicate. It's time to stamp up in a different location than if you're really trying to grow and your business works and it is giving people success and you're at capacity and all your processes are working efficiently. Perfect. Let's do another one. Then. Let's start to grow. That's that I'm all about. But the two year contracts are on one extreme. I think that sucks. That is to protect against another thing, John, though, which is let's go on the far end. Most of you, most of you guys who are listening like this, but we've literally worked with gyms directly who started at this point. And I've, I've personally helped gyms out of this situation, which is where they're kind of taking money by hand from people's cash, whether it's checked when they come in, so a very small personal training outfit. We've had one we worked with in your gear Academy, and actually two, that we've kind of built into a regular functioning business after this point. But in the beginning, if you're still accepting cash from people, here's what happens if you're accepting cash from people, I'll use MMA. Because then again, this is in the box, the other side, this is what you're trying to avoid by going to your contracts. Mm hmm. I work with them directly. One of the things that they were doing in the beginning because it started out in a guy's garage, people show up and pay your dues every month. Except what happens in fitness. And in martial arts, people sometimes don't show up for a while, they go away for a little bit. So someone pays one month, and then they're not in for two or three months. Well, maybe by the second month they haven't been in and they go shit, do I owe him those back dues. So I kind of just came back in and paid him for this month. How does this work if it hadn't been added on? And but that that, that that not being automatically taken care of actually makes them less likely to go back in? Which means if they came to you for fitness, or training or skill acquisition, whatever that is there not they're less likely actually to get it over the course of a year. Because you're doing some fly by night. Just pay me when you come in. And if you don't come in, we'll just start today. Again, that type of stuff actually keeps people away because it's a social barrier, right? To have to come and go oh, no, I haven't been in a while. Here's your money. Sorry about the last couple of conversations that keep people away. Yeah. And so once you switch to say automatic EFT payments, where payments are recurring, and they automatically come out every four weeks, guess what happens? Then? Those people who maybe hadn't been in in a month, bam, that payment runs again, and they go shit, oh, yeah, I gotta get back in there. It took the money, I gotta get back in there, I gotta get back in there. And then they'll know that when they go, they're already paid. They have the right to go, there's no social awkwardness, it gets more people in and John was I can tell you this for sure. We have people that go away. And I can check and see when I haven't seen someone come back in a while. It's almost always within five days of the time the last payment ran. Short, almost always it's a reminder. Yeah, but if they came here to get those things, whatever it is, training, weight, loss, consistency, just whatever it is, they're going to get it when the payment comes, the payment comes out like shit, alright, I've already paid for it. Let's go do this. It's just different. Okay? So that is one slight but major improvement, right in regards to getting them committed, it makes them more likely to increase their likelihood of success, right? By automating your payments versus fucking hate letting them handle your payments, that's an improvement, trying to guarantee those automated payments for two years. It's too far down that scale. Yeah, it's like you've just gone too far. That's all it is, like, I believe all things, all rules or regulations. There's a sweet spot. There's just a sweet spot. You know, if we're trying to talk about literally any single issue, there's a sweet spot, John, DUI point, oh, eight in some states, point one and others. I think in Europe, it's like point oh three or some shit. It's like one legit beer thing. There is a line, there's a line, it's you got to set it somewhere. And there's a reasonable discussion to be had about where that line should be. And that's what we're here to do today. And I believe for us here in this industry, as personal trainers. blood alcohol content is to be pointed out not just I think it's eight or 12 weeks. I think that's a minimum initial commitment. You don't have to pay it all upfront. I prefer that people do but it's okay. If your gym is recurring, especially if you're just doing classes. You better be committed for 90 days. Outside of that. Yeah, totally. But why must I commit for 90 days? Because that's just what it takes to get results. You can't come in here for three or four weeks. And if you want us to work with you on payments or something like that, we certainly can. That's a reasonable approach somewhere along the spectrum of pay me anytime you come in. And it's bad for the business and bad for the people's chance of success, versus guaranteeing locking people into two year contracts, which is truthfully not the best thing for the business, but it makes your books look pretty good while you're leveraging that stuff into debt. And it's the worst thing for your clients because that commitment doesn't really work that way. It doesn't work that far. Most people Jesus Christ John, how many relationships with humans, males and females or whatever you're into like in the last two years. I've only had one And it lasted longer than two years. And it's been 17 years now.

John Fairbanks 35:04

Yeah, with that, but for sure, I mean, think I've

Tyler 35:08

been way less than two years. So to assume that someone's gonna go into a job, I'm not going to do the same. If I can go, if I can buy a membership, John to a restaurant, where I get half off my meal, but I gotta go once a month, I have to prepay or commit for two years. I mean, set foot, no restaurant consistently for two straight fucking years. Anything for two years, and you

John Fairbanks 35:27

I don't want it to actually happen. It's just animosity. Yeah. So now it's like, I gotta go here, I would love to go somewhere else, but I've already paid for it. I've already done this. So now I gotta go fucking do this. And it's

Tyler 35:39

someone who chooses to commit for eight or 12 weeks or whatever. And by the way, if they want to go month to month, maybe it's just more expensive in that capacity, but they're going to be committed for that 12 weeks, they can pay month to month, they're committed for 12 weeks, someone who makes that choice. And then at the end of that 12 weeks, chooses to recommit for eight or 12 weeks. By the way, that's an important thing, I let everyone who's made their initial commitment can go month to month with me on anything. Sure. After that, I don't require them to re-up for 12 weeks, because that first commitment I think should hurt. I still think it should hurt it, you know, this is a big investment. But this is to make sure you stick with it for this eight or 12 weeks timeframe. Beyond that, yes, now let's find a sustainable payment system . Not everybody can afford to drop two, three grand at a time every three months. But some of these people can come in and drop 700 bucks a month, 800 bucks a month.

John Fairbanks 36:31

And this is definitely this is where we're going to start to venture into like what we believe are important parts of the business as a whole, right of having like a group, and then being able to have a place for people to be able to then commit to a higher level of service, whatever that's going to be whether you have a group or a General 24/7, membership, whatever it's going to be. But there is an element where we all know, everything that we're talking about, just in case this is the first time you've heard our voices, it always comes down to client success. So everything has to do with whether your client will be successful with what you are choosing to do in your business. So within the fitness business, there is too much where it goes, like Tyler said, like you said, it goes too far to one end of the spectrum where it's like, this is what's best for the business. Very, very rarely, like crazy law, does that also go in tandem with what's most successful, or what's best for the client, what's best for the business is probably at odds with what's best for the client. So

Tyler 37:40

retention and the attractiveness of your business in your markets are coming into play. And that's where I think a lot of these gyms fuck up. Right?

John Fairbanks 37:47

Because really what ends up our whole thing, and what we have seen work time and time again, and completely change how gyms run their shit, it comes down to when you can marry what's best for the business, to what's best for the client. Taking advantage of clients psychology and taking advantage of all these pieces of being able to have them commit, and then move up and down your services and have everything be aligned. That's when that does come into alignment. That's when shit really does start flowing very, very quickly. And it's kind of like getting this is why you like you said this is what made me think of it was like that initial 12 weeks that initial commitment should hurt because it's it's like getting a fucking train started. It takes a lot of energy to get this big bitch moving and it's slow and a lot of work. But by the time we get to that 12 week, we're not flowing this person, we know what their goals are, we know what they want. We'd like they've, they've been integrated into the community, all those things that are really important that first 12 weeks of capturing somebody's attention, and getting them built in your communities, a lot of fucking work and it should be. But once we hit week 12 We're now like you're now you're now moving and the ability to either keep them going for another 12 or move them into another thing becomes infinitely easier because you've done all of this excellent work up front.

Tyler 39:12

And, you know, one of the things too is if this was working in retaining people, because this theoretically is people locking people into one year and two year contracts if it was working, because by the way, John, these businesses operate at a much larger scale than most CrossFit gyms I think the average membership in a CrossFit gym. Member numbers in a CrossFit gym are between like, I'm gonna guess it's in the range between 75 and 200. Sure, most likely, right, but I bet 90% of gyms fall in between that space. There's some boutique personal training studios. I'm not sure their numbers kind of can be all over the place depending on what to do. But these gyms, the ones that do the contracts, are the ones that have the most clients. Usually you're looking at 10x to 20x. What more of a coach to put product is right, a high, you know, one that doesn't know just sell access. So a lot of these gyms that are offering these contracts are the ones that are doing way, way, way, way, way more volume. And yet, however, a national retention statistics doing, these are the ones driving, these are the people that are driving the data. These are massive franchises, these are huge chains. And these are people that are in every goddamn market, almost every market, there's anywhere from one to 10 of these types of gyms that are forcing people into contracts in one way or another. And yet, I would say these are the people that represent the largest swath of data that we're getting regarding retention. And yet, people don't commit to a gym don't stay in a gym for more than fucking 90 days. So it's not working anyways. It's not working for the clients, and it's trashing the gyms reputation. So why are they doing it? Well, I've already told you why. Right? It's just fake business. It's money on a dotted line, so they can borrow money against it. That's all it is. It's all it really is. But it's not working, it actually is not working for retention. Not even close, those people still aren't staying. So for you out there don't go well, these most six this is why I always say don't replicate this. All the things that you see from the most successful gyms out there, or as you understand to be the most successful gyms out there. That ain't that ain't you. Just just looking at your facility, your people, what will help your people be successful? Is your business going to take a shape from the level of commitment that they put into the services that are offered to them to the fact that they better feel like they got a choice every step of the way? And not only that, if they have questions, they should be making an informed decision. Not an uninformed decision, not a not a bait and switch decision, not a decision that's made by forcing them into this as the only product we have type shit that is not good for retention, that's not good for long term commitment and long term commitment. And consistency is what gets clients results.

John Fairbanks 42:05

For me, that was where I was going next. Right? It's like it really starts to come down to that it's a long term commitment. Somebody being with you, it's alright, what are the results people are getting, because look to fuck around your communities. They're still, if you live in the States, still a lot of fat and unhealthy motherfuckers that are out there. It's like, okay, so now let's look at your gym, then. If you're supposed to be the antithesis of that, then how do your people look? What are the results that they're getting? Because I think it's totally respectful. I think it's really important to every gym, even if you are one that has that high, you know, high level of coaching, high level of expertise, and lots of one on one, like the ability to help people then get high success, you still want to be able to capture people in that maybe isn't as high level of specificity and high level of coaching does still allow someone to come in and get their foot in the door. But it does totally respect the fact that the results will be lower. Right? It's you can you can look around, we've had people talk to us about like, well, you know, I was I was at, I've tried a couple different CrossFit gyms. And you know, one gym, everybody kind of looked like me or was a little overweight, and it kind of when this person wasn't overly healthy, and it was like, they kind of don't look like me. And I felt like, oh,

Tyler 43:28

They feel welcome. It feels like I'm included. And initially, he doesn't want to stay looking like that they

John Fairbanks 43:34

They want to have a change. So then he's like, Well, then I went to another CrossFit gym, and everybody was really jacked or they looked good. And it's like, that's what I wanted. So I felt like he was helping me achieve, like, reach for that goal. And so that's where it's like, even in CrossFit, as a gym owner, this way of going is as gym owners, you have to respect the fact and don't hide that your group membership class is not fucking built for results. No, that's not why it exists. That's not why it was ever created in the first place.

Tyler 44:06

It was always built as an intense compromise, to try to get more people to do a type of training. So that a coach then one, it's more affordable for them. So it's a way to draw more people in but it's not about optimizing results and that's one thing I think gets very frustrated with me and you talk about a CrossFit training methodology that can be done one on one can be done in semi private, but how was it always done? A group of people can't not always by the way, there's some great coach stuff but a group of people kind of barely getting supervised just grip it and rip and some nonsense. I've been in CrossFit gyms all over the world guys that probably if you're listening to this, I've been to way more CrossFit gyms that you have, in way more countries. I'll almost guarantee it. And I can tell you this, it's not done very well in a lot of places. It's just not and I still believe the methodology as written is one of the best recipes for general fitness. It's, you know, bordering on I'm not a huge fan of the Olympic weights. But again, scaling is not just about skill, and strength. It's also about risk versus reward. Meaning my mother who was 60 does not need to go in and ever need to learn how to snatch or clean and jerk. If she has offered scale replacement opportunity options for every single workout that she goes into, then she should do the other things right. I think that's totally fine. But I just fundamentally, I think that you have a system that is built for success. And that is now being delivered in a way that is compromising on a few things. And it's an equation that most people are willing to accept. But you and your business needs to decide what products of yours can fit that this is why I believe CrossFit gyms should still offer private personal training should offer bodybuilding style personal training, I don't know of many CrossFit athletes who are good, like like, good, good, that don't do bodybuilding style training and some powerlifting style strength work and some strongman style strength work. They're not gripping and ripping wads in classes like everybody is doing like everybody does. And all these gyms where people just watched CrossFit in 2014 and 15. And just went Yep, let's just do this in class, just set the timer and off we go. And, and I just I fundamentally believe that these gyms your opportunities, is in giving people more choices, allowing them to go up or down more expertise more personalized attention less personalized to me spend more money, let me invest more in my nutrition, let me try something a little bit different. But if you're forcing everybody into the same thing, and boxing them into the same timeframe for this long term thing, they will get tired, they will get tired of it, they will want to try something else. And then it is you who knows you and your business. And this contract you got them roped into, that has them complete that stands in between them and the thing that they're trying to do.

John Fairbanks 46:56

And don't make the mistake that it is when we say that it's don't confuse the fact that your group fitness option for a CrossFit gym, or your baseline 24 hour membership for 24/7 location, don't make the mistake of when we say it's that is still critical for capturing your general population and building community. So So still

Tyler 47:25

entry points to like you need, not everyone is going to trust you to the end of the world. That's what that's one of those things is let them trust you for a couple of months, man, let them figure out you don't suck.

John Fairbanks 47:36

So it's still super important. But don't confuse it with what's going to make you fucking money. Because revenue is not going to be driven by the thing that's best for the community. What's best for the community is for you to do shit with your members and have great activities and things that make them endear to you and you're there and you people love each other and all that woowoo bullshit doesn't make you any goddamn money. It does help with client retention. But what makes you money and gets people to fucking stay are the results. And those results come from a higher level, a different level of service. And I think that what's been getting confused is that it's like, well, the soft gym mats at $150 a month. And 100 members means now I'm making this much money a month. And it's like, but we're missing it. And I think there's a larger conversation to be had that we can do in another episode. But it all is tied to this piece. Because there's, there's still as people are prepping for the new year, as we're recording this in November of 23. It's they're prepping for Alright, what's coming next? And how are we going to be able to improve upon where we were and what do we anticipate coming? And I think we're still most folks are missing the fucking mark of like, this is why you're having you're having revenue problems, because of how these things have been getting done. And just kind of doubling down and being like, well, you know, just keep more people or whatever. Like it's, that's not the solution here.

Tyler 49:06

Yeah. So that's all we're gonna cover up to is more to get into but talking a little ranty I tend to do such things. Thanks for listening, everybody. Make sure you go to the go to follow the show at the Jim Morris podcasts on Instagram. Make sure you go to gym owners join the gym owners revolution Facebook Group link is in the description. Follow me on the show at Tyler F and stone and follow John follow

John Fairbanks 49:28

me at Jay banks FL on Instagram next week

Tyler 49:30

we're gonna go very specifically at some of the bigger traps that I think some of these CrossFit affiliates are falling into and how they're identify specifically some stuff we read from the morning chalk up and one of their recent conversations about market trends and the opportunities they see for CrossFit gyms and I think that I just think I disagree with them. So I'm shocked by that. So either way, thanks for listening, and we'll see you next week.

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