Earlier this week the following article was posted by the Huffington Post; written by Nancy McGuire Choi. CrossFit has grown by nearly a 1000% (no, that’s not an extra zero) in 4 years. Not only is it an innovative fitness approach, but CrossFit HQ’s franchise model has fostered a community of philanthropy unrivaled by any other business approach. But with the pending divorce of CrossFit founder Greg Glassman, the future of CrossFit’s business model is up in the air. The following article by McGuire Choi addresses this issue.
When was the last time a big name gym franchise raised millions for children’s cancer research, wounded veterans, or mammograms for women without health insurance? For CrossFit athletes and coaches, this philanthropic and community ethos flows from two reinforcing elements — the CrossFit tenet of “making people better” through an evidence-based approach to fitness, and the innovative “affiliate” business model that gives entrepreneur-coaches maximum freedom in the design, approach and personality of their own CrossFit gyms (known as “boxes”).
Recently I highlighted a few of the philanthropic and community initiatives catalyzed by this dedicated group of athletes and coaches. This post focuses on how the unique affiliate model sets the stage for passionate affiliate owners to do extraordinary things inside and outside “the box.”
The news that a private investment firm is negotiating partial ownership of CrossFit prompts important questions about the future of this model for both fitness and philanthropy. The contentious divorce underway between CrossFit Founder and CEO Greg Glassman and Lauren Jenai Glassman has led to a pending deal between Lauren Jenai Glassman and Anthos Capital for her share of CrossFit. The future of CrossFit’s corporate ownership — and by extension, the survival of its affiliate business model — is pending the decision of an Arizona divorce court. With CrossFit’s meteoric growth from just 500 “boxes” in 2008 to over 4,500 today, and momentum gaining, this news comes at a pivotal time for the grassroots fitness movement.
What makes the CrossFit model so innovative and effective for fitness — and catalytic for philanthropy?
CrossFit’s singular focus on making people fitter and healthier gives it an unusual social entrepreneurship flavor for a for-profit company. This mission drives the hands-off relationship between CrossFit headquarters and the affiliates, which supports affiliate owners with CrossFit training methods and good practices without the restrictions or regulations of a franchise. CEO Greg Glassman notes: “I promised them, from the first affiliate to the last, that we’re only here to help, not to profit off you.”
In practice, this means making it as easy as possible for passionate coaches — many of whom are young people returning from military service — to earn a healthy salary owning their own enterprises. Starting a Gold’s Gym franchise, for example, requires a net worth of $1 million. In contrast, aspiring affiliate owners need only shell out $1,000 for a Level 1 Certification course and $3,000 in annual affiliate fees to have the opportunity to realize their dreams of opening their own neighborhood “box.”
To succeed, affiliates owners must be invested in their clients’ progress. Unlike big name gyms which bank on most customers not showing up at their franchises, the CrossFit model only succeeds if clients do show up and make measurable progress. Members pay significantly more than a standard gym membership in exchange for personalized coaching, carefully programmed Workouts of the Day (known as “WODs”), and advice on nutrition, sleep, and injury prevention. Using the WODs, coaching, online discussions, and community camaraderie, affiliate owners must find ways of challenging elite athletes and novices alike.
The open source community model promotes creativity, innovation, and best practices. Greg Glassmannotes that “Franchises lack a diversity of approach, and if I try to get everyone moving in lockstep, I get everyone moving towards mediocrity. Because we have a Darwinian/free-market approach to the affiliates, best practices arise at a breathtaking rate.” Since CrossFit is so collaborative, the affiliates share their insights, evidence and experiences with the larger virtual CrossFit community through CrossFit’s main website and the CrossFit Journal.
Together, these elements comprise a business model that is uniquely appealing to affiliate owners. CrossFit New England owner Ben Bergeron states that the affiliate model was essential to his decision to open his own “box.”
“In addition to the results, the affiliate model that Greg Glassman created is what drew me to CrossFit. I am an independent person and wanted to run my own operation. I wouldn’t work well in a constrained, franchise-type model. Glassman’s theory of best practice allowed me as a twenty-something year old trainer with no financial backing the opportunity to get into the business. This facilitated the amazing life I’ve been able to create for myself and the contributions I’ve been able to make in improving the lives of others.”
The CrossFit community’s long record of philanthropy and community initiatives seems to be a natural outgrowth of the hands-off model that gives affiliates the freedom to identify needs within their communities and mobilize to make a difference.
Bergeron explains, “If I want to run a charity event for a member whose kid is sick, I don’t have to run it by anyone. This makes it easier to do something for a good cause. I’m focused on training people. If we had to take the time and energy to get our ideas approved, it would cut down on my incentives.” In the last year alone, CrossFit New England led and participated in seven fundraising events for a range of causes, including cancer research, at -risk youth, and wounded warriors.
Patriot CrossFit owner Brian Wilson notes, “I got into the business of CrossFit because of the freedom inherent in the affiliate model. If I succeed or fail, the blame lies with me and there’s no safety net. CrossFit Headquarters won’t swoop in and tell me how to fix something. All the information and tools are there for anyone to succeed at this through our open source model. If you’re paying attention, all the best practices are out there for free on the internet. If I mess things up, there’s nobody to blame but me. That’s a great system that creates reward based on how hard you’re willing to work. It’s a very linear relationship between effort and success.” Wilson recently co-founded CrossFit Walter Reed, a military non-profit affiliate that trains severely wounded veterans, paving the way for new methods to train amputees and other severely injured athletes.
The CrossFit affiliate model seems to have generated the best of all worlds, as affiliates improve the well-being of their members while actively contributing to their communities. Now, with an upcoming court ruling on CrossFit’s governance, it remains to be seen what the impact will be on this model, the community, and the future of CrossFit.
(Source: Huffington Post)