Chris Cooper (00:00):
Gym ownership generally happens in four phases. First, you systemize everything to turn your coaching passion into a real business. Then you optimize things to figure out what’s working best for you, and you go all in on those. Then you grow: You add staff and systems and marketing to increase your headcount, your ARM and your profitability. And for some gym owners, the fourth step is scale. That is to expand your empire by adding more locations or just doubling the size of your current location. Today we’re talking with three gym owners who have chosen to go the route of expanding their empire by adding more locations to their gym. They’ve done it different ways. Karl and Oskar worked together to build new locations from scratch, and, as you’ll hear, they follow the 150 Model over and over and over again. Per Mattsson, on the other hand, who’s also in a similar market in Sweden, he grows by acquiring gyms in his neighborhood or partnering with them to help them grow. You’re gonna hear from both today, but the big questions for you are: Are you ready to do this? Can your gym run itself? Can it scale based on systems? Can it run without you? If it can, then it might be time to start thinking about other locations, but if it can’t, it might be time to just focus on your first single location, build your income and build your systems to the point where it’s self-sustaining, and then think about the next steps from there. Karl, OsKar and Perr, welcome back to “Run a Profitable Gym.”
Karl Solberg (01:28):
Thank you very much.
Chris Cooper (01:30):
So thrilled to have you all as beloved teammates on the mentor team at Two-Brain. You’re also successful multiple gym owners. So why don’t we just do a quick round of intros here. Karl, would you go first, please?
Karl Solberg (01:43):
Sure. So Karl Solberg, born and raised in Stockholm, opened up CrossFit Medis with Oskar in 2014. And we opened up our second location, CrossFit Sickla in 2020—February 2020.
Chris Cooper (02:01):
Thanks. Oskar?
Oskar Johed (02:03):
Everything that Karl said, it’s me. Two years younger than Karl. Slightly shorter, slightly less handsome, but I think we form a pretty good pair in terms of running a gym that we can hopefully dive into later on.
Chris Cooper (02:18):
Wonderful. Per?
Per Mattsson (02:20):
I’m Per. I live like an hour’s drive north of these guys, so north of Stockholm. I started my first gym here in 2009, and then started my second gym with some partners 2016. Last year we bought into two other gyms in Sweden. So I’m currently co-owner of four different gyms. And yeah, I think that’s my gym-owner story. Part of the mentor team, of course.
Chris Cooper (02:50):
Of course. Yeah. So Karl and Oskar, I’ll turn to you. A few weeks ago when I was visiting Per’s event Coaches Congress in Sweden, I got to drive around with you guys and see the original gym, and then go see the new one and talk about your model. So maybe the two of you guys can just describe your model for opening gyms from scratch.
Karl Solberg (03:14):
Well, I mean, it took us a while to figure it all out. Like many of our gyms in Two-Brain, we were also like trying to figure this out on our own first. So we were not very successful from the get go in 2014. We did a bunch of mistakes, and it was not until after a few years after having joined Two-Brain Business that we really started to get momentum. And I think ever since, and Oskar, you can jump in at any time, like ever since we have focused on just doing the, the basic stuff over and over again and perfecting the models over and over again. So by the time we opened our second location, our first location was already running without us. So we had good systems in place before we opened up our second location. And good system means the very basic stuff of what we have in Two-Brain Business, what we teach in our curriculum of the Prescriptive Model of doing No Sweat Intros, of having an on-ramp program, of doing goal reviews on a regular basis, making sure that we check in with clients as often as needed in order to keep them around. And you can take over Oskar. When we opened up in 2020, it was, of course, a very special time in the world.
Oskar Johed (04:56):
Yeah. But I think at the same time, you know, we’ve only been gym owners for nine years. The first gym ran for about five years before we opened up our second location. And as Karl said, it took us about five years to become not necessarily dependent in the business anymore. So the second location took us about two-and-a-half years. And I think it takes time to get good at something. We’ve only been entrepreneurs for nine years. I intend to be an entrepreneur for the rest of my life, and so does Karl and hopefully the staff that we develop as well. So I think we’re relatively patient. We are very humble in the fact that it’s gonna take time to be good, and what we just have to be is we have to be slightly better every day for a very long time. And we just have to be slightly better than the average, unfortunately. And then we’re gonna be very successful. So I think that’s what we try to do. We stick to the stuff that works. We do test the curriculum quite hard. We are not afraid to try the whole “bullets before cannonballs,”’ but at the same time, we come back to the stuff that keeps working, and we keep doing it. And just as an example, like three weeks ago, we just modified our goal-review model. And from what it looks right now, we have about 40 percent higher upsell from the process we’ve done. So we’ve made tweaks to the model and how we do it, but it’s still doing goal reviews. So we just do what works until it works. And then when it’s working well enough, we then try to make it better. If it doesn’t, we go back to the things that we know works.
Chris Cooper (06:31):
So what you just described there is really virtuosity, I think, and what really struck me when I visited your gyms was that you’re sticking to the basics and working hard on getting better and better at the basics. How do you avoid the distractions. If you walked into Catalyst today, and you guys are better at scaling than I am, if you walked into Catalyst, my gym, you’d see here’s the heart-rate monitor, here’s the Level Method map, here’s the supplements and retail. You know, it’s my sandbox, and I just try and do everything. Where you guys, it’s very clear. Your marketing, it’s very clear. Your sales, the NSI is clear. The goal review is clear. You know, how do you stick to the core without being distracted by all these other options?
Oskar Johed (07:16):
I think one thing is from the start we had an idea who we were to serve. Obviously, we’re way better today at serving them. When we applied to become a CrossFit gym, we wrote something like “we just wanna serve normal, extraordinary human beings three to four times a week, mom and pop people, 40-plus-type individuals.” And these are the same clients we serve today. We always have the same focus. And do we use the Level Method? Yes, but that’s only because it serves our client. And I think something else that we do quite well is we rarely make stupid mistakes. We have Per for that—ha, I gave a little push there. But he also has some greater successes. But I think you don’t become successful by chasing mediocre returns. Like if we know that we have data to support what we do in in Two-Brain. We know that NSIs work. We just have to do that. And then we try to, you know, iterate to make it better. Same thing with goal reviews or whatever it might be. We stick to the stuff that works and just try to make it better. ‘Cause we have a data sample of 900 gyms or so, probably of 2,000 over the long run that’s been doing this. And that’s also why we stick with multiplying our model by opening up new gyms: so we can iterate even faster. The first gym took like five years, and the second gym took three years to be independent. The goal is to open up a new gym and to not even be there from the start. We can iterate way faster. And that’s something I think serves at least us quite well.
Chris Cooper (08:47):
Karl, maybe you can go a little bit more on that for listeners. So one thing that you said to me as we were driving down around is “every gym is not a brand new gym starting from scratch. Every new gym is like the 150 Model over and over and over and over again.” What did you mean by that?
Karl Solberg (09:04):
I just want to mention one thing first about the vision because I do think that that clarity is also something that helps—like from the other question that you asked, what makes us stick to what we do and not go chasing after other things? And I think our vision has always helped us. Even though we didn’t write it down from the very start, it was pretty clear to us what we wanted to do. And the best way to deliver on that vision is through the 150 membership or members model. The Two-Brain business model, doing that really well has allowed us to step out and look at scaling options. So the way I see it is that if we can be really successful at implementing that model, those systems, and giving our clients the success that we want for them, given the vision we have then—and this is a question; I think the first time we asked ourselves this question was probably like six, seven years ago—it’s like “why can’t we do this multiple times? Why can’t we just build new gyms?” So we’ve had the idea for a long time, but not until we opened up our second location. It was clear that we could actually do it. And then, of course, opening up a second location came with a bunch of new problems. So we needed to retest all of our models again. But then again, I think it became easier because we were doing the basic stuff and we were focusing on that. So taking the 150 Model and copying it just seems like the natural way to go.
Chris Cooper (11:06):
So each location has its new challenges, and I think Per will probably dive into this a little bit more, but if the foundational models are the same, you can scale more quickly. Where are you finding economies of scale? So, for example, just for the listeners’ sake, are you finding that you can have one general manager managing one or two or three gyms or are you finding that you only need one salesperson running two gyms? Or you can swap coaches? Are there any economies of scale that you’re gaining by opening multiple locations?
Karl Solberg (11:43):
We think so. We are not there yet, but our ambition is to first of all open up 10 locations. And I’m not sure where the point is where we need, for instance, multiple general managers. But so far when we look at the 150 Model, and we look at the most important things to do locally that is like within one gym in one location, the way we see it today is that the staff working at that location has to be able to and empowered to work with the client experience as unhindered and as freely as possible. So retention becomes like the Number 1 function locally. The beauty of this, though, is that if we have a central location or a central function, we can take care of a lot of the stuff that will stress the local organization. And I think that’s where you find the economy of scale. Does that make sense?
Chris Cooper (13:07):
Yeah. What’s an example of a centralized function?
Karl Solberg (13:11):
So a centralized function could, for instance, be R&D. And it could also be marketing. And I think those are the pretty obvious ones. I think finance is also typically a central function. There will be some accountability and tracking data that you need to delegate to the local organization. They need to answer to specific metrics. But if you can free them of as much of those things as possible, like the way we see it today is that then they can really go in and focus on the clients. So what we we’re trying to do is to delegate as little as possible of those central functions that I mentioned—like R&D; that shouldn’t be local. We think marketing shouldn’t be local, we think, if it’s not Affinity Marketing. That will be a part of the local organization. And also like finances. If it’s not just reporting numbers, then it doesn’t belong in the local organization.
Chris Cooper (14:27):
Beautiful. OK. So one more kind of encompassing question before I turn it over to Per, who’s doing things differently. Oskar, Karl, you find a new location, you’re in there, you’re gonna open today, and you’ve got a blank canvas. What are the systems that you use right from the start?
Oskar Johed (14:45):
Well, first our goal is to be cash-flow positive from Day 1. So we need the marketing engine to run. And what works really well for us is Facebook advertising. It works really well. So that’s something we would rely on. Then we also like to open our locations relatively close to where we currently are. So we get a cell splitting in a sense. We divide, so some of the members from our current location might go to the new one to bring our culture with them. So that frees up new space at the current space we can fill up there. We also got a running start with core people that understand what we do at a new location. That’s what we did here, and that’s something we could do. But then quickly, you know, goal reviews. We have 400 members, but we still do about 40 to 50 goal reviews a week. So we do believe that that’s the key reason why our retention is relatively good. We have over 200 members per location, but we still do it on a 150 Model ‘cause we’ve been successful enough to scale up. We have the resources to do it because our retention is good. So we still believe that goal reviews—our clients can do goal reviews as often as they want. So that’s something we still think is very important for the clients that we seek. So that would still be like an NSI because we do think that we want to make sure we protect the current clients we have. Yes, we want the same type of avatars within the gyms. That makes our lives way easier. We’re gonna reduce complexity. And then the systems. In our case we have standards even as we are running fast. We always start on time and finish on time because we focus on 40-plus-year-old professionals that need to pick up their kids from school or whatever. So that’s the key thing. But then we also do goal reviews. As Karl said, we need to make sure we pay taxes and, you know, we pay the bills and all this stuff. But that’s been delegated up so we can put our very empathetic, caring people that coach in place spending as much time as possible to enrich the lives of the members that we have. So it’s like we don’t need to add more stuff to it. We don’t sell supplements, we don’t sell shirts, and there’s a lot of things we don’t do because we still think we can get better at this stuff. We are doing relatively well. And I’d like to emphasize that again we’re still only nine years into being entrepreneurs, and we haven’t been doing this for that long. So we still have things to do better in terms of just NSIs and the goal reviews and all this stuff. And then we can do that in multiple locations before we start adding other stuff. ‘Cause once again, we’ve come relatively far. We have a 20-plus percent net profit margin, two gyms, and 400-plus members. But we still have things to do where we stand. We’ve gotta dig where we stand. So that means the Prescriptive Model. We still keep the goal reviews. That’s central. And then anything else? I can’t really think of anything else. Karl, do you think of anything else that we do from Day 1?
Karl Solberg (17:50):
It’s the sales piece and the retention piece and all of the systems that’s included. So you mentioned already like some sort of a pre-sale, a founders club or something, in order to get net positive from Day 1. But apart from that, it is the very basic systems of selling, prescribing the right program and then making sure the client journey is just as flawless as possible.
Oskar Johed (18:18):
Yeah. One thing I like, running a gym isn’t particularly complicated. Like, people make it both complicated and complex. It’s about serving the clients that you’re fit to serve—and just keep doing that over and over and over again. And I think that’s one of the strengths that we still have. We are pretty good at keeping ourselves accountable to not try things that we haven’t tested yet. ‘Cause we wanna limit downside risk. We know what we can maybe gain, but if we screw up we might destroy the relationship we built for our clients. And it’s taken us nine years to get this far, but it can be wiped out quickly if you do something that’s, not malicious, but that turns out to be wrong. So we just wanna keep doing this stuff well, and we stand to do it for probably 30, 40 more years to be even better.
Chris Cooper (19:09):
All right. I think another great model that you two have is staff development and training, but I think we’ll come back to that. What I’d like to do is turn to Per. Per. Can you describe your model for adding more gyms to your empire?
Per Mattsson (19:24):
Yeah, I could try at least—‘cause I don’t know if it’s a model yet. But yeah, we’re trying. So I think the background story also is that I have my first gym with one partner, and he’s not part of this new venture, this new empire. So that’s another gym. That’s my first gym. I have that with one partner. Then we opened CrossFit 162 West in 2017, and with that gym we went sort of straight into Two-Brain Business and followed all the tactics and strategies because that was one of our goals. We’re gonna do things by the book now because I was one of the first gyms in Sweden doing CrossFit and did all the mistakes. So that gym was really successful. Like in the first three years I think before the pandemic we were on our way to be becoming a million-dollar gym and had a kids program of 200 kids doing sports-specific training, 250 members with an ARM of $205, something like that. So, you know, we were just crushing it. I think we had a great team. So we are a team of co-owners in that gym. Three of us are still sort of active. It’s me, Christopher and Stefan. And me and Christopher, we are almost not needed in that gym anymore ‘cause Stefan is a very good operative manager. He’s leading most of the processes, like sales, and he’s the head coach. He’s you know, really good at delivering excellent service. And we have a couple of really good coaches who are very entrepreneurial. So they are part of the sales team and the marketing team and the client success team, et cetera. So we felt one and a half, two years ago, that we were ready to try something new. We have always also had the ambition of running more gyms. But I think if I was to compare myself to Oskar and Karl, I think I’m a bit lazier, to be honest. What I do admire with these guys is that they can go all in on something and they just stay consistent. And we don’t want to run the risk of having to solve problems in other gyms as well. So our model was more like, “OK, we know that there are gyms out there where gym owners either want to sell or they need help. Some of them come to Two-Brain Business. Some of them email me or call me and ask me questions.” So we just knew that there are opportunities out there, especially after the pandemic. So we actually posted like an ad on Facebook and told people that we are looking for gyms to buy into where you as an owner want to stay on as an active partner. So our model is to buy into other gyms where the owner still wants to work in the gym and create a career. So that’s what we do. We buy 50 percent and they keep 50 percent. So we want them to have a strong incentive of staying in the business. ‘Cause like one of the gyms we bought into is way up north, and the other gym we bought into last year is way down south. So there’s absolutely no way we could go there and solve problems or deal with stuff. We don’t want to end up in that situation, either. So I think also it’s based on our strengths. I think I am very good at helping other owners gain confidence and learn how to be leaders. And Christopher, my partner, is good at the financial side, so he’s a bit more systematic guy than I am. So as a team, I think we work really well when we sort of step in to help other gyms. And of course one of the conditions also is that that gym signs up for Two-Brain Business. So they have another mentor as well. So we wouldn’t wanna work with a gym owner who isn’t interested in joining Two-Brain Business because we actually think that’s one of the major keys to success.
Chris Cooper (23:25):
That, that’s awesome. What are some of the challenges when you’re taking over a gym that’s different from the other gyms? How do you bring that gym on board so that it’s running as well as the others?
Per Mattsson (23:39):
Yeah, I would say there are a lot of challenges because you actually don’t know anything you think you know. You can have meetings with people, you can look into their financial statements and everything, and then there are still things hidden underneath the surface or something, right? So there’s a risk that you take, but I would say that that risk is quite low because it’s not very expensive to buy into small microgyms. So for us, we were willing to take that risk. We were also a bit naive in terms of what the risks could be. So I think for us it’s a learning process Right now we are in the process of opening up another gym, and that process has been a bit different with those local partners. But yeah, you know, you really don’t know if that local partner is a good leader or not. You really don’t know if they have a good team or not. You have no idea how their members are going to react when you start implementing new tactics and strategies, for instance, rate increases. So it’s based on qualified guesses, I would say. But so far I definitely think that the pros are stronger than the cons. It’s been a lot. It’s been a fun process. I see it as like “mentorship on steroids” ‘cause we speed up their process. They have a mentor, they do RampUp, but then, you know, we can supply them with playbooks, processes, experiences. We can connect their nutrition coach to our nutrition coach. So I think there are a lot of different things that we do that really speeds up the process.
Chris Cooper (25:21):
When you acquire a gym, Per, say you bought one today and you had to step in right away to fix something. Like what are the very first processes or models that you put in place in that gym?
Per Mattsson (25:33):
I would say an on-ramp process with personal training in it. ‘Cause what I want to do is I want to help the owner gain confidence to charge more. And I think an individualized on-ramp is one of the best ways of doing that. ‘Cause sometimes it’s a bit scary to just increase your rates or whatever. But implementing a new strategy for onboarding members, you can see that there are a lot of people even in my small town that are willing to pay more. That’s gonna give the owner more confidence, and it’s gonna show the coaches that “Oh, right, these guys, they actually know what they’re talking about.” So that, I think that’s a good first like stepping stone.
Chris Cooper (26:12):
Yeah. And where do you foresee economies of scale? You know, like Karl mentioned he could centralize finance and marketing potentially. Are there any opportunities for you to do that as you’re acquiring these other gyms?
Per Mattsson (26:26):
Absolutely. I would say, I mean, when they mentioned all those things, you could see me sitting and nodding. It’s exactly the same things. Finances, definitely. We are going to probably hire someone in August to take care of all the gyms for us. So we have a very talented person that we are going to hire, and I think that’s really gonna help all the gyms. Marketing, definitely. So also, you know, it’s also a learning process even with the different individual gyms because I spent one day at the summit with other owners, Karl and Oskar for instance, and a couple of other multiple-location owners, and I got really good input from that day. So we are changing the way we are going to market. We are changing the way we are going to define roles and tasks. So I can see a lot of different scaling options, you know where, where we can really draw from this. So marketing, continuing education, definitely. And finances.
Chris Cooper (27:32):
All right. So I, I really wanted to get into that coach-education piece, and Oskar and Karl, you proudly share that you have more Level 3 coaches—sorry, CrossFit Level 3 coaches—than anywhere else, maybe in Europe, in your organization. How do you handle staff training to create this excellent service across multiple locations?
Karl Solberg (27:57):
I don’t know where to start there. But I think one of the things that we did was to just tell everybody on the team what we expect from them and when in terms of the education milestones. So this was just a small section, and it’s very simple in our playbook. But it says like, “When you start working here, we expect you to have this level of external credentials. And then we also have a list of internal credentials, which are essentially just milestones, education milestones.” And then it is of course like, “Well, what’s the next external step?” “Well, it’s this, and then the next external step is this.” So it’s very clear what we expect from our staff and by when we expect it. And then maybe, Oskar, you can say something about how we actually put that into practice.
Oskar Johed (29:02):
Yeah, I think it really started to take off when we decided to start every single meeting we have with the vision. We wanna fundamentally improve the health and quality of our members and their families. Like that is not surface-level stuff. We can point to numerous examples. We’ve had people, you know, come off medications or leave abusive relationships or whatever. So we keep pointing to that all the time: that the training we do here is to make it better for these people. And the next cohort of 10 gyms that we’re gonna open up is genuinely—I’m trying to not cuss on this show here—but we would wanna make it very, very important—that this is front and center. You know, everybody knows that you don’t necessarily become a better trainer just because you get credentials, but we have a very empathetic, caring crew. If we can overlay that and combine that with higher credentials, they are gonna be able to scale. The confidence comes with that. So they can say to someone, “You need nutrition guidance or you need to do more personal training or you should do X, Y and Z instead.” So that’s where we started. And then we, as Karl said, we keep pointing people: “We still like you if you don’t want to seek higher credentials. That’s perfectly fine, but you will not be able to be part of our organization going forward. We have made this promise externally to these people that we will be here for them forever, and our members get better. So we have to get better as well.” And I think our staff has risen to the challenge. We have at least two currently part-time trainers that are CrossFit Level 3 trainers. They coach twice, once a week or so. So they have other jobs, but they just want it to be better. And now they’re looking to get to Level 4. So it just comes to be a strong belief in what we do. And then it becomes obvious for everyone to be better. So we can eventually look down specifics of how we do it, but we are genuinely committed to improving the health and quality of life of the members. So it just becomes a natural extension. Like, “This is how we behave today and tomorrow.”
Chris Cooper (31:12):
How do you address trainer education, quality and excellence across multiple locations in different places?
Per Mattsson (31:21):
Yeah, that remains to be seen, I think. ‘Cause I would think it’s even hard to answer that just looking at one of my gyms, because I think also what we choose to focus on as owners is also a reflection of what we are interested in. Like if you look at Karl and Oskar, for instance, Oskar, he wanted to become a Seminar Staff member. So that’s what he did, right? So he’s really into it. He’s great at coaching, and he’s great at everything around that. I focus more in my team at CrossFit 162 West on the entrepreneurial side. I wanted them to become good at creating content. I wanted them to become good at selling, you know, establishing networks, blah, blah, blah. So that is what we focused on. I am not sure if that was the best possible strategy or if that is the best possible strategy going forward, but it worked really well for us for a couple of years. I also saw that Karl and Oskar, a couple of years ago, they really struggled with their coaches and were a bit frustrated, but they just stayed consistent. And now I think like the next two, three years, they are going to explode their organization. That’s what I think. I definitely, so sort of, borrow things from them. So I can see us, we have already become a bit more focused on, you know, the coaching side. We want to improve that side of the business as well, perhaps narrowing down our roles with our team members. So we don’t want ’em to do like 5, 6, 7 different things because they sort of lose focus. So as you can see, I don’t really know yet, but I think it’s gonna be more towards what Karl and Oskar are doing and less towards that entrepreneurial side.
Chris Cooper (33:05):
Thanks, guys. One thing I love about all three of you and the team at Two-Brain is that if you don’t know the answer, you’ll say that. Or if you don’t have experience, you’ll say that. I think it’s all too rare among business coaches right now—people who just pretend that they know everything. So thank you for being that way. Let’s just talk about pros and cons, Karl and Oskar. Why do you choose to open new gyms starting from scratch each time instead of acquiring other gyms?
Karl Solberg (33:35):
A question we’ve been asking ourselves many years. And I think when we look at the gyms that we could possibly acquire and we make our list of pros and cons, so far we have ended up with a longer list of cons than pros when it comes to acquiring another gym. When we look at how simple it is, in fact, to open up a gym—and I wanna remember some stuff from “Two-Brain Business,” the first book. Like you’re mentioning how easy it is in that book to open up a gym, to open up a CrossFit gym. It’s like the easiest thing that you can do. You find a location, you fill it with some equipment, and then boom, you’re done. You can basically open up. And I think we still feel that it is actually easy to open up a gym. We have found out, too, that finding a location isn’t always that easy. We’re in Stockholm, in the capital of Sweden. It’s a fairly big city. It’s fairly expensive to rent here. It’s fairly expensive to rent a facility. It’s almost impossible to buy because the price of the land is just too high. So there are challenges there. So it might not be super easy in terms of just finding a location, but there are locations. And the second big obstacle, or the second big problem, is, of course, to find enough staff, to have enough staff to put in there to serve your clients. And I think that’s the obstacle that we’re still wrestling a lot with, and we’re doing it together with Per as well. We’re trying to figure out “well, what do we need to do in order to staff 10 locations?” And of course we don’t have that answer yet because we only have two, but already it’s hard to find staff.
Oskar Johed (36:03):
I also think that if I just compare ourselves to Per—I can speak for myself a hundred percent, but I can probably speak for Karl as well—I believe that Per is a better leader than we are. So I think that his patience in leading people—he’s better at seeing the time it takes to change an organization that I don’t have. If I was forced to do it, I probably would do a decent job, but that’s not one of my strengths. Patience is not something I have a lot of. So the tiny amount of patience I have, I try to have that and work hard so we can stay together and do what we do well instead. But I think both and Karl are, just to compare it to Per, we’re not as good of leaders as he is in terms of like managing change. So for us, it’s more obvious to start something from scratch. We don’t have to change; we just have to replicate rather than trying to see that mentoring of staff. Karl and I are more like, “Hey, keep running in one direction.” We’re really good at that. But when we start changing direction, it’s not where our strengths are. I would say maybe Karl is gonna fire me after this call, but I think that’s something we don’t have.
Karl Solberg (37:23):
I agree. I agree. Yes, I think so, too. Like for us, it becomes more natural and easy to open up a new business than to acquire one and drive change the way that Per is very, very talented in doing.
Chris Cooper (37:40):
If Karl fired you for saying that, Oskar, it would just be more evidence that what you said is true. So yes, perfect. OK. And I 100 percent agree. I ask Per’s advice on leadership questions all the time. Per, why do you choose the acquisition model over the duplication model?
Per Mattsson (37:58):
It seemed both fun and interesting, but also we don’t have to find the location. We don’t have to find a team of staff members. So, you know, all of that is already in place. We know that we don’t have to go there, solve any issues. I can be a good co-owner or partner through Zoom or phone calls. So it’s fun, but it’s also sort of easier to start because all of the issues that they mentioned about finding a place, finding a location. We have tried that. We have also tried in the Stockholm area to open up more gyms, negotiate contracts, and it’s really, really hard. But I can definitely see ourselves opening up a gym also if that opportunity arises. I don’t know. But it, you know, the biggest obstacle I would say is finding a location or recruiting coaches. So for us, this suits us. I am really interested in helping gym owners, so I can spend time on Zoom or phone calls. I can visit the team and inspire them. Christopher is really good at digging into the numbers and helping out on that side. So I think it suits us. He’s right now on a sailboat, but he was coaching one of the other owners today on Zoom. So, you know, I don’t think we are going to make as much money as Karl and Oskar. I don’t think so because the gyms that we are going to run are probably going to be a bit smaller in terms of revenue and profit, but I don’t know. So it’s just, you know, if we can prove that this works with a couple of gym owners, we are going to have a strong negotiation point with new gyms that want to open up with us. So I don’t think we are going to pay next time we buy into a gym. It’s going to be sweat equity and experience. So it’s a fairly easy way of doing it. I think the risk is fairly low. If it doesn’t work, we can just sell our shares again. And that would be a learning experience. So, you know, we have me, Karl, Oskar, we have always said that, you know, we really want to change and help CrossFit gyms in Sweden. Owning more locations is one of the ways of doing it, and other way is mentoring them through Two-Brain Business. So if you would ask why, I would say because it’s fun, because I think it’s doable.
Chris Cooper (40:37):
Such a great answer, Per. So my last question for both of you, for all three of you, is what would make you adopt the other person’s model? So Oskar, Karl, what would make you buy another gym? And does it include a sailboat?
Oskar Johed (40:54):
Yes. I think we—well, I speak myself. I could not be the one driving the change in the organization ‘cause I’m not good at that. I’m pretty good at getting people to run even faster and in the right direction. But I am not patient enough to see change through, so if I had someone—we might have to acquire Per. Or if when we start growing now we might get people on top so I can be outside of the day-to-day business, but we have someone that can drive that change. So I have nothing against the model. I just know that I would not be effective in that model, nor would I be efficient. So if we got someone that could drive change, I would be more than willing to, cause I agree with Per. It’s like if we can get more gym owners to stay open through co-ownership, where you own them for a while then sell them back, that would honestly be my favorite thing. I don’t want people to go out of business. Now I know myself well enough that I could not drive the change that would be needed to make this model successful. Karl might have a different opinion.
Karl Solberg (41:57):
Well, if I would go into a joint venture, if I would buy into another gym, we would have to have a very strong shared opinion about where this business is going. And I think like on the vision level of what we want to do … . I also think I need to be approached. I wouldn’t do it if I needed to approach the other gym, but if I would’ve had somebody come to us asking for our help under these sort of terms and conditions, then I would consider it. Yes. And also, like looking into the future, you were talking about that Oskar, like the way we’re building our centralized organization today, we do want to replace ourselves in our current seats. And I think also that, like, as an owner, I might be interested if my team was strong enough, if I had people on my team that had the skills, like Per’s leadership skills, for instance. If I had that team, then yes, I would like to look at those options. But currently it’s me and Oskar, and we have also our general manager, Emma. We don’t have those skills yet. So today, thank you, but no thank you. Tomorrow? Yes, hopefully.
Chris Cooper (43:47):
Such a great answer. Per same question, reversed: What would make you want to open another gym from scratch?
Per Mattsson (43:54):
I think I would only do it with like Karl and Oskar—people like that because, you know, they have to know a lot about how we think about things in Two-Brain. They have to have a very strong work ethic. They need to be very good at coaching and recruiting and training. So honestly, I think that’s my answer–people like that.
Chris Cooper (44:20):
Thank you so much to the three of you. I think this is gonna help a lot of people decide on what’s really important when it is time to scale, when they go from one location to multiple or even decide to exceed the 150 Model and add more people. Tremendously helpful. You’re very wise and humble. Thank you all. Thank you. Those are three of my favorite mentors and gym owners in the world. And what you’ll hear from them is that they have simple systems that create models that they can duplicate over and over and over again. Karl and Oskar are really good at inserting those models and building on them from a blank canvas. Per is really great at teaching and mentoring those models to people who already own existing gyms. And there are pros and cons to each. What’s most important though, is that simplicity scales faster. They work on very basic models, like the 150 Model. You know, they have similar staff. Everybody runs on systems, so they know what to do all the time, and they can just duplicate that over and over, achieving economies of scale. What they’re not doing is running five gyms that are all completely different from one another, that don’t have the same alignment on vision, mission, that don’t run, you know, the same systems. And so these guys are really, really impressive. Less important, but still important, to these three is the method that they choose. All three of these gym owners and mentors love CrossFit. That’s gonna be their method. But regardless of your method, your model is what determines your success when you’re trying to scale. I’m Chris Cooper. This is “Run a Profitable Gym.” And if you want to meet with more people who are interested in this phase of their business, go to gymownersunited.com. You’re gonna find other people in there with one location, brand new startups, multiple locations, and big empires, too. Keep going, keep helping people and keep extending your impact.
