Kelley Fitness, LLC, affiliated with CrossFit, Inc., back in the summer of 2006 when there were fewer than 100 affiliates. At that time, we became CrossFit Ocean City. Now there are over 5000 affiliates and the movement continues to grow. Back in 2006, we knew, or knew of, just about everyone within the community, which Coach Greg Glassman started back in the 1999 - 2000 timeframe. The concept of affiliation would not have started but for a few ambitious followers of CrossFit's free, online workouts back in 2002, who asked Coach for permission to use the CrossFit name. CrossFit North (Seattle area), I believe, was the first. Then along came CrossFit East (Florida). The rest is just history.
Along the way, the affiliation process has had few barriers to entry. The affiliation fee has risen from $500 a year to $3,000 a year and one applying for affiliation now needs to have taken and passed the L1 Certificate Course prior to affiliation approval. One is required to write an essay, which is then reviewed by CrossFit Headquarters staff, prior to the granting of affiliation. CrossFit posts its "Steps to Affiliation" here and provides guidance on the affiliation here. The FAQ section of CrossFit's main page also answers significant questions about the affiliation process here.
Essentially, becoming an affiliate of CrossFit means that you're allowed to use the CrossFit name. That's it. CrossFit affiliation isn't a franchise, so if you're looking for a fitness franchise, you'll need to look elsewhere. HQ won't tell you how to run your business and you're free to do what you want when it comes to training your members.
Discussed below are things one needs to do to apply for and become an affiliate. I've also added some insight into what it's like to be an affiliate, the advantages and disadvantages, and some advice on running your affiliate business. I've excluded information on programming, specific equipment, and other aspects of using the CrossFit method as your coaching platform.
TESTING AND CERTIFICATE REQUIREMENT
Along with the affiliations came the certifications. In the beginning, certifications were more of a weekend meet up where Coach gave all the lectures on CrossFit theory and tossed in four to six workouts for good measure. The "staff" consisted of whomever had already been to a certification and was willing to travel to be part of the team - all without pay or compensation of any type. At least we all learned about functional movement, fitness, and coaching on a level that no other certification even came close to.
As CrossFit grew, so did criticism of the certification process. In true Coach G fashion, the certification process was overhauled extensively. A professional Level 1 training staff was developed and the certifications became, by 2010, ANSI approved certificate programs. The taking of the certificate course and passing of the exam are one's first steps in affiliation. You can't just show up and take the test, you must complete the entire course and then take the test. The pass rate for this exam is, I'm told, about 80%.
The demand for the certificate courses never seems to wane. This has gone from about one per month to about 17 a month with no end in sight. Sure there are critics of this process and the ability to turn someone into a trainer in a weekend, but that's true of a lot of programs both in and out of the training business. Take a look at AFAA's personal trainer course and you'll find that for $499, you can just take it online. USAW will turn you into an lifting coach in a weekend as well and I don't think I've ever heard of any complaints about their program.
Regardless, if you want to coach athletes using the CrossFit method and you want to affiliate down the road, then you need to complete the Level 1 Certificate Course.
BUSINESS ENTITY AND INSURANCE
You don't need to have an existing business to start your affiliate. Several very successful affiliates today started out as personal trainers inside commercial gyms running small groups through CrossFit workouts. Others, like us, started our operations out of our garage. Still others began in parks. Some of the more recent examples of successful affiliates jumped in hot and heavy with 8,000 square foot gyms and $50,000 or more worth of equipment. The bottom line for all affiliate owners, however, was the common thread of having attended a Level 1 course that provided all of us with the foundational theory behind CrossFit methodology and theory.
From a business standpoint, once you start training others, you want to make sure that you're doing so in a professional manner. For some unknown reason, I've experienced a number of people who look down on trainers and show a lack of respect in a number of ways: failure to pay, slow pay, disregarding appointments, failing to show up on time, leaving early, or assuming that the business model you decide to set up doesn't apply to them. Holding people's feet to the fire will take a lot of your time, so be prepared.
One good way to begin a professional business is to form a corporate entity. Each state has their own requirements for entity formation. An LLC is the easiest insofar as recordkeeping goes. One can certainly form a corporation under subchapter S as well. I won't get into the details here, but check with an attorney to determine what's best for your situation and to ensure that you comply with state and local laws pertaining to running a gym. I've advised a number of Maryland CrossFit boxes regarding legal matters (I'm an attorney by the way) and it's important to know the law and to follow it. More on this below.
As a corporate entity, you not only set yourself up as a professional, but the liability protection for your personal assets is another concern that a corporate shell provides. Once again, the dollars you spend hiring an attorney to make sure you get this right could save you thousands on the back end for doing it yourself even if you don't have a dime to your name when you start out.
A brief mention here, but you'll need liability insurance as well as business insurance. Check with a reputable insurance agent who is familiar with insurance needs of the fitness industry. This may not be your local guy. Look into what the CrossFit RRG can provide as well. I've found that the RRG provides the best protection for everthing we do as an affiliate - from training to general liability. (Full disclosure - I'm also a board member of the RRG.)
Together with the insurance comes the waiver forms you have your clients sign. Each state has their own laws regarding waivers and the extent to which someone can waive their liability. Additionally, each state has its own laws with respect to negligence. In Maryland, where I practice, waivers of liability, when worded properly, are binding on the client. Additionally, Maryland is a contributory negligence state, so any negligence attributed to the client bars recovery. That said, we still insure as if we could be taken to the cleaners though we haven't had a claim since we opened in 2006.
I can't emphasize enough that you need to seek legal counsel when forming a corporate entity and when seeking to comply with state laws surrounding gyms. There's still more to consider as an affiliate owner.
Outside of CrossFit's license to use their name, you'll have numerous other licenses, permits, and fees to pay to open your gym. To begin with, most states require that you register your gym. In Maryland, this is done through the Health Club Registration Unit of the Attorney General's Office. Simple to do, but many gyms overlook this requirement and operate at the risk of being shut down and fined heavily by the state. Anyone who offers a fitness program must register. Other states have similar requirements. I find few CrossFit gyms have complied in Maryland.
Local regulations may also require licensing. Depending on the locality, this could simply be a business license, a sales and use tax license, or other licenses. In Maryland, if you want to sell anything other than services (i.e. t-shirts and the like), you must have a sales and use tax license and you must collect and remit sales tax on the items you sell.
You may also be required to have a building permit, zoning permit, fire marshal inspection fee/permit, and the like. Check with your local building department to ensure that you've complied with their inspections, fees, and certificates.
Other than these licenses and the license to use the CrossFit name, you're not required to have any other licenses. This includes other training licenses. CrossFit doesn't care, nor recognize, any other fitness training licenses as a basis or prerequisite for opening a CrossFit affiliate.
There's another license that you'll need to have if you plan to play any music in your gym. This is a license from each artist from whom you plan to play music, or you can satisfy this requirement by going through ASCAP or BMI. You can only get away with this for so long and ASCAP in particular goes after CrossFit gyms aggressively. They'll start out with a simple and friendly letter that gives you a limited time to comply and a quote for the fee. Make sure that you review the quoted fee and challenge that based upon what you actually do with respect to playing music. Don't blow these folks off, they have lots of money and will make an example out of you.
BACK OFFICE STUFF
If you've read this far, you're already a CrossFit affiliate owner, motivated to become one, or you've decided that this entirely too much BS and this isn't the route to go. No matter, there's more info to come.
To manage your affiliate's finances, you'll need a good, reliable software platform that captures all of your income, expenses, liabilities, payroll (if you have it), loans, credit cards, equity, profit and loss, and balance sheet information. The industry leader is Quickbooks Pro. If you aren't sure what to do with this program, then find a class in your area and take it. Learn to use this program early on and learn it well. Neglect the numbers and you'll be left wondering where all the money went. And don't try to manage the tax filings at the end of the year. Hire an accountant to make sure you don't screw this up.
Hand in hand with the financial software is some type of client tracking automation. There are two leading contenders in this realm: MindBody Online and Zen Planner. There are others, but these two are head and shoulders above the rest. And we've used both of them and find that Zen Planner is the most user friendly of the two. With these, you'll also be able to process payments electronically, set up recurring membership payments, enter contracts for your members, track attendance, ensure you have up to date contact info, and be able to communicate with your clients using email, text, and social media.
If you pay your trainers, you need to determine how that fits into your gym structure. There are a number of affiliates that make arrangements with their trainers as volunteers, meaning the trainers pick up a class or two in exchange for free, unlimited access to the gym. While most gym owners and trainers want the flexibility of the trainers being independent contractors, few trainers meet this qualification under IRS rules. The IRS publishes an indepth guideline to help you determine how to treat your trainers - as employee or independent contractor. Read up and then ask your lawyer to assist you if you're having trouble deciding. Bottom line - don't mess with the IRS.
Along with establishing employees is setting up payroll with your financial software. This is very easy and I recommend using the assisted payroll function. Using the built-in payroll function ensures that all of the taxes (federal and state) are collected and paid along with social security, medicare, and any other wage deductions. The state and federal taxing authorities are unforgiving when you miss deadlines and the penalties can be larger than what you owed in the first place.
You'll need workers compensation insurance for your employees as well. Check with your state's workers compensation authority to determine what steps you have to take in this regard. The insurance usually isn't that much and it's required.
Other than what's been mentioned above, I haven't mentioned what you'll need in the way of other overhead to run your box. Here are some important items to budget for:
When you set up your affiliate, you'll want a website. Not only will CrossFit link to you, but this will be a primary means of reaching your members and a way for new members to find you, learn about your business, and communicate with you. Whether you use a static website or run a blog, like we do, there are costs associated with the URL purchase (don't get one with CrossFit in it unless you're approved as an affiliate) and the blogging software. Perhaps you want to hire a professional to set up the website for you. The costs can be as simple as $15/month for a blog up to whatever you pay to have your site managed.
Communications are important, so you'll need a phone. Cell phone and landline, or just cell, are essential. Pick a plan that works for you.
The facility you use will have to be purchased or rented. Determine what your budget is and plan accordingly. Along with that you'll need to budget for electric, gas, water, and any other utilities you intend to use. Additionally, you'll need to budget for cleaning supplies and such things as toilet paper. Don't forget the whiteboards, markers, erasers, and other "things" you'll use in and around the gym. The cost of these will eat away at your monthly budget a little at a time.
Credit cards, loans, bank fees, and the like must be accounted for as well. A small fee like $10 a month to the bank adds up over a year. Make sure that when you use your business credit cards that you pay them off each month as you go, or be prepared to pay the interest charges.
Many professional associations will also want your money. The local chamber of commerce will likely seek you out. Not a bad investment of a couple hundred dollars if you use the social meetings to generate business opportunities for your gym.
Charties will seek you out as well. Whether it's the local baseball team, your church, or the local law enforcement DARE program, it's good to support these charities with donations.
WHAT YOU GET BACK
If you're expecting a lot of support from CrossFit HQ, then think again. HQ will promote you on the website, publish pics you send in, feature articles you write on their website, and hopefully give you kudos when you deserve recognition. Never forget that you're not a franchise. HQ is not responsible for your success or failure. They won't loan you money and they won't come to your rescue when your business has trouble. They will help you fight off CrossFit rip-offs in your area, but they'll be just as happy to see another CrossFit gym open up next door to you as they were to see you join the community. That's not disloyalty or a disregard for you, it's just the way it is.
Most of what you get back for pouring your heart and soul into your CrossFit affiliate is the pleasure of seeing people's lives changed through better health and fitness. You also get respect from the fitness industry and from those who live and work around you. There's just a sense that you, that CrossFit gym, just happen to be the hardest place to train with the best results.
So, be that gym that everyone wants to train in. Be that gym that fosters growth of community. Run your business professionally and demand and expect a professional rate for your services. As you've read above, there's a lot of stuff you need to do to run your business besides train people. Whether you like it or not, the other stuff is required just as much as being a good coach is required.
So, you want to be an affiliate? Well, get to work.