Fragile Franchises: Why It’s a Great Time to Be an Independent Gym Owner

Fragile Franchises: Why It’s a Great Time to Be an Independent Gym Owner

As the COVID crisis deepens, more and more franchisee gyms are asking Two-Brain for help.

I can’t name them specifically because privacy is a core value of our mentorship practice. But if you’ve heard of a fitness franchise, we’ve probably spoken to one of their franchisees in the last week.

They’re hurting.

 

Fragile Franchises?

 

All the benefits of a franchise—a preset model, done-for-you pricing, group purchasing power, brand marketing—those can look pretty attractive to a solo-preneur trying to figure everything out on the fly. In fact, established entrepreneurs often buy franchises because they don’t want to spend years and thousands of dollars trying to figure it all out while burning money.

But in times of crisis, a franchise becomes extremely fragile.

As a franchisee, you don’t have the ability to pivot your core offering. You can’t simply take your business online overnight; you have to wait for the franchisor to act.

You might not have the ability to cut expenses. As a franchisee, you might be contractually tied to a lease or franchise fees or a certain number of staff.

You could easily lose all your clients—and all your revenue—with no way to get any back and no end in sight.

Almost overnight, the value of gym memberships went to zero. No one can sell “access” anymore.

Within a week, the value of exercise programming fell to zero. No one can sell workouts anymore.

Soon, the value of coach-led classes will fall to zero. Clients know how to enter “free workout class” into a search engine.

The only thing that’s retaining its value is coaching.

Two-Brain gyms made a quick pivot to customized online coaching. Spending four to six minutes per client per day to tailor group programming has resulted in a greater than 90 percent retention rate. Some have actually grown in client numbers and revenue already. And many have been able to cut their largest expenses.

They could do it because they’ve built antifragile businesses. Their failures—and their successes—are theirs alone.

Many have licensed the “CrossFit” affiliation to benefit from the branding (and because they align with CrossFit’s values). Others haven’t. But even within that affiliate model, the terms of licensure are so loose that CrossFit affiliates can make fast moves. They’re antifragile.

 

Ready for Change

 

When the world is constant and predictable, it’s attractive to own a franchise. No guesswork, proven models. And someone else to blame if it fails.

But when the world changes—as it always does—it’s far more beneficial to be the master of your own fortune.

And if you’ve already built your plans and playbook, why do you need a franchise at all?

When the world emerges from the COVID-19 lockdown, independent gym owners will find themselves swimming in a larger ocean with fewer sharks. They’ll have new tools: online training, nutrition coaching and a hybrid model we call Flex. They’ll be thinking differently about their equipment and space expenses. The best affiliates will be stronger than ever before, and they’ll have far less competition.

Gym ownership has always been a game of attrition. COVID just knocked five years off the natural progression of the fitness industry. Licensees and solo-preneurs who pivot fast will benefit. Franchisees won’t.

Online Coaching: Systemize, Optimize, Automate

Online Coaching: Systemize, Optimize, Automate

Doesn’t it feel like you’ve started a new business?

Even though your audience is the same, you’ve gone from “pick up your barbell like this” to “here’s how this workout will help with your goals today.” You’ve switched from coaching groups to coaching individuals through customization or personalization. And even if you’re still delivering group classes on Zoom, your business today is different than what it was on March 1.

That means you’re back in Founder Phase again—the first phase. (I wrote about the four phases of the entrepreneur’s journey in my fourth book, “Founder, Farmer, Tinker, Thief.”)

In this stage, the best way to move your business forward is to follow the three-step process that Founders follow: systemize, optimize and then automate.

 

Systemize

 

First, you have to deliver your new service by yourself. You have to know it inside and out.

But you’re not going to be the primary delivery person forever. So as you deliver, you’re going to record everything. You’re going to write the systems that replace you. You’re going to leave “deep tracks” for others to follow.

Start by writing down “here’s when I post the workout” or the very first step you take each day. For me, I start with the absolute basics: “I turn on my computer.”

Test your systems with someone else: Can he or she follow your instructions to deliver your service exactly the way you do it? If so, move on to Step 2. If the person can’t, keep training until you find success. (We call this the “hit-by-a-bus test”: If you were hit by a bus today, could someone deliver your service without your clients noticing that you’re gone?)

 

Optimize

 

After you’ve tested your systems and proven them to be replicable every single time, you can edit them.

I say “edit” because editing your systems is like editing a book: You look for ways to deliver the same service with less effort. You look for efficiencies and cut for clarity.

For me, this usually means asking something like this: “If I put this instruction in the first email every client gets automatically, will it save me having to answer a question individually every time?”

For example, when I scaled Two-Brain Business from 10 clients to 50, I asked myself, “What are the most common things I’m telling everyone?” And then I put those lessons into video form. When new clients got on a call, most of the “teaching” was already done, and we could work together on implementation.

For you, this might mean recording movement demos or sending instructions to set up MyFitnessPal.

It could also mean removing things that aren’t absolutely necessary. For example, I used to send every client a six-page PDF on the Zone Diet. Now I just say, “Here are your macros. Here’s the benefit of eating this way.” They take action faster and make gains sooner.

 

Automate

 

Only after testing your processes and optimizing them should you turn to automation online.

Many coaches actually lose clients because they rely too much on automated texts, emails and prebuilt programs.

Instead of sending a personal text, they set up an automation: “Hey, it’s me. Checking in on you … .” This is sometimes playing with fire. If you send a text about “top tricks to lose weight this weekend” and your client doesn’t care about weight loss, it’s going to become quickly obvious that he or she is not getting your personal attention. Don’t let automations make you lazy in relationships.

Automation can mean software. There are certain instances where you can automate your client journey: housekeeping items (“Here’s your waiver!”), program introductions, FAQs and weekly reminders for routine tasks (“Don’t forget to take a picture of your meal today!”).

Automation can also mean routine tasks for humans. For example, “Text 20 former members every Friday to see how they’re doing.” The task is automated—you don’t have to tell anyone to do it—but not computerized. See the difference?

When automating through a human, you want to put the best human for the task in that role. Not everyone is great at communicating through text, for example. If your coach can’t send a text without spelling mistakes, he or she is not a great fit. I’m not great at using emojis or GIFs, so I have others do the texting for me.

The key to all of this: Don’t jump to automation too fast. Telling a staff person to “text everyone every day” won’t work; you need to test the system yourself, record what works, optimize your delivery and then hand it off. It’s just like any other business process!

 

Online but not out of Touch

 

The great news: Online coaching allows you to move really quickly through the systemize-optimize-automate sequence.

Record your processes on video, share them with your staff and update based on your clients’ results.

Remember: You’re selling relationships more than ever. Don’t try to replace yourself with a robot!

Coronavirus Response: April 3

Coronavirus Response: April 3

Daily Update

 

Government bailouts are helpful, but they won’t be enough to sustain your business for three months. More than ever, it’s up to us to take control of our businesses and help our communities recover.

Whether you love coaching online or hate it, it is your path forward for the next 90 days. The skill set required to deliver online coaching isn’t quite the same as that required to coach an in-person group. But the digital one-on-one conversations you have now should make you a better coach long term.

 

Today’s Tactic

 

Build your online business the way you build an offline business:

– Start with the people closest to you: Determine what they need most right now.

– Offer to help them.

– Extend the offer to their friends.

– Tell the stories of your earliest clients’ successes.

– Extend the offer of help to your entire audience.

It sounds simple, but this is the marketing strategy that keeps gyms growing. The actual tactics involved can vary. Choose the ones that work for you—but don’t lose sight of the process, and don’t skip steps.

 

News

 

CrossFit’s Support Your Local Box online event starts today! Sign up here.

 

Key Resources

 

Chris Cooper: “What if You Hate Online Coaching?”

Chris Cooper: “What if You Love Online Coaching?”

 

The Two-Brain Business COVID resources page is updated regularly with new info.

Click here to visit and bookmark the page.

 

What if You Love Online Coaching?

What if You Love Online Coaching?

In the last two weeks, you’ve completely changed your business.

You’ve successfully led your clients through a potential tragedy—the closing of your bricks-and-mortar location. You pivoted to a brand new delivery system. You kept most clients engaged, and almost all of them are still paying you in April. You’ve even gained two new clients, and you can see the potential to scale up your online coaching service.

You went back into Founder Phase again. You ran your business all by yourself. Slowly, you became more efficient at delivering this new service, and now you find that you’re working less and making more.

The lightbulb has switched on: “What if this is actually better?”

“What if I can make the same amount of money without that giant rented millstone around my neck? What if I can help my clients even more than before? What if I can do it without having to manage people? And what if I can do it all before 9 a.m.?”

 

The New Landscape

 

During a recent private webinar with online coach Brad Overstreet, I was asked a question: “If you had to start over knowing what you know now, would you include online training right from the start?”

After thinking about it, I said: “I’d start with online training before anything else.”

In other words, I’d start a new fitness business by getting five online clients and keeping them for a month. Then I’d add nutrition or mindset coaching and try that for a month. I’d learn how to keep people by practicing retention without face-to-face coaching (it’s harder).

After three months, I’d assess whether I still wanted to open a bricks-and-mortar location.

In my case, I’m sure I would. But I wouldn’t base my business on my location and equipment—not anymore.

If you’re absolutely loving this new world of online training, you might be asking yourself, “Do I really need to go back to paying rent, managing staff and selling 150 memberships just to make the same money I’m making now?” Here’s my advice:

First, give it a month. You’ve just gone through a traumatic period in which it looked like your livelihood would be taken away. Then you learned how to coach people online and it felt like salvation. Subconsciously, you might be looking at online training through the wrong lens. This is why people who meet on reality TV shows get married: They’ve been through a one-time traumatic event and “saved” each other. But most of those marriages don’t last.

Second, know that it will get boring. The novelty of figuring out new systems and new routines will wear off. And online training won’t mean complete freedom: You won’t be tied to a 5-a.m. class anymore, but you’ll still be tied to your phone. You’ll get texts and messages at all hours and feel compelled to respond (we teach you how to set expectations in our Online Coaching Course).

Third, go back to your “why.” If your clients don’t do well online, does that affect your decision?

Fourth, your clients might not want to be coached online forever. Your business has to revolve around what your clients want. If you move entirely online, will you keep enough clients to make the change viable? Or can you pivot to the “flex” model of in-person plus online coaching (we teach this in our Online Coaching Course).

 

Wild for the Web?

 

Now, if you do still love coaching people online, that’s OK. You have three options:

One, you can focus on the online side of your business. Build out the flex model and work with those clients yourself. Let your coaches focus on the delivery of your in-person program.

Two, you can build a niche audience online. Deliver your program to water-polo players around the world while you serve your local community in person.

Three, you can get out now. Keep as many clients as you can online. Sell off your assets and negotiate an early exit from your lease. The math might still be in your favor.

You don’t have to go back if you don’t want to. You don’t have to sell in-person training only. Online coaching can be the “fourth leg” on your coaching chair (along with group coaching, personal training and nutrition coaching). You’ll always have these tools when you need to pivot everyone back online.

The “shelter in place” mandate will probably become the go-to response of every government on Earth during future crises. That doesn’t mean it has to replace your business. But online coaching can be part of your strategy to be “anti-fragile.”

Soon, you will be back to your in-person coaching. My gym will, too. We’ll all be happy about it. But knowing what you know now, will online training become a permanent part of your business or just something you survived?

Coronavirus Response: April 2

Coronavirus Response: April 2

Daily Update

 

Combat uncertainty by removing variables. By now, you should know what’s working well for you. Measure your metrics—such as class adherence (how many people are showing up for your Zoom classes? Is this number rising or falling?). Also track workout completion, mood, hours of sleep, etc. What do your clients need right now and how can you provide it? (Read more here.)

 

Today’s Tactic

 

Set up your online schedule for April.

Monthly: Pick one larger-scale “challenge” event to boost adherence.

Weekly: Choose two online social meet-ups each week. We include templates for trivia night and other get-togethers in our Online Coaching Course, but you can easily set up morning coffee or an evening wine-down. Be the hub!

Daily: Write SOPs for delivery of your online program (including time slots). If you’re running Zoom classes, choose times based on attendance. If you’re delivering customized messages to clients, dial in your delivery windows.

 

Key Resources

 

Two-Brain Radio: Effective Online Training With Eddie Lester of Fitnessmentors.com

John Briggs of Incite Tax: SBA Loans Frequently Asked Questions—CARES Act, Part 1

John Briggs of Incite Tax: SBA Loans Frequently Asked Questions—CARES Act, Part 2
(the SBA resource mentioned in Part 2 is here)

 

The Two-Brain Business COVID resources page is updated regularly with new info.

Click here to visit and bookmark the page.

 

Coronavirus Response: April 3

Coronavirus Response: April 1

Daily Update

 

If your gym bills on the first of the month, today is when the rubber meets the road. Will your clients continue to value your coaching outside your facility walls? Will you be able to pivot to online delivery for at least the next 90 days? Will you want to? And what if you get COVID—are you covered?

 

Today’s Tactic

 

We’ve been collecting data on gym retention, adherence and delivery for years. When the first gyms faced closure in China a few weeks ago, we were able to quickly identify what worked (and what didn’t). That data helped over 800 gyms in the Two-Brain family retain their clients (still over 90 percent retention), and it helped hundreds of others who followed along. As our attention now pivots to online retention, here’s what we know for sure. Use the info below to improve the services you’re delivering or to create new services you can sell.

1. Clients require more frequent individual touch points online. You don’t have to deliver sessions 1:1, but a two- or three-minute customization is required for long-term retention.

2. Zoom classes are popular at first, but then interest wanes. This effect is less pronounced in bootcamp-style classes (lower skill) and kids classes (retention for kids is actually higher in group than in 1:1 training).

3. Regular check-ins help with group retention (contacts outside classes).

4. Challenges boost adherence. If you don’t have another idea, try CrossFit Inc.’s online competition.

5. Given an online option, about 20 percent of clients will reconsider cancellations and return.

6. The average gym gains between three and four online clients just through organic Facebook posts about online coaching. We just released a 30-day done-for-you social media campaign to our clients (you can find it in Milestone 3 of the new Online Coaching Course).

7. Facebook ad costs are at 2015 levels. Some gyms are starting to get their ads dialed in.

8. Workout programming is less valuable than ever. Habit building, daily accountability and nutrition are the cornerstones of online delivery, according to coaches who have been successful for more than three years. Read more (and get a couple of templates) here.

 

Key Resources

 

Chris Cooper: “Coronavirus: What to Do if You Get It”

 

The Two-Brain Business COVID resources page is updated regularly with new info.

Click here to visit and bookmark the page.