It is safe to say that thousands of Americans have thought about owning their own CrossFit® affiliate box (gyms are called “boxes” in the CrossFit world). Time and time again, a top instructor or manager at one CrossFit affiliate will leave and open their box. Other times, a busy working professional that works out at a CrossFit box will use their savings and credit in order to launch a new gym, typically partnering with one or more instructors. While owning a CrossFit box is anything but a passive investment if you work there full-time, and still will require a decent amount of work for a more passive investor, it remains a popular investment option as hundreds of new boxes open their doors each year.
You Aren’t the Only One Who Wants to Start a CrossFit Gym
There are very few barriers to entry to start a CrossFit gym. Unlike other brand names in the fitness world that you have to franchise (e.g. Anytime Fitness, Gold’s Gym, Orange Theory, etc.), you can affiliate with the CrossFit brand for just a $3000 annual recurring fee. Keep in mind, though, that you don’t get the exclusivity like protected territories, and the low cost means that one or more CrossFit gyms could open right next to you or just down the street. In Kapolei, Hawaii, two CrossFit boxes are in the exact same industrial park, and Scottsdale, Arizona, has 3 boxes practically on top of each other.
Affiliate Fee is Very Small Part of the Cost
Besides the affiliate fee, opening your CrossFit box is going to require purchasing barbells, weights, mats, and some type of rig. There are ways to control the cost such as buying used equipment from other boxes or from events like the CrossFit games or other regional competitions. However, don’t expect to spend any less than $20,000 in equipment. Marketing and branding is critical to any CrossFit box. Many boxes spend $2000 or more per month on advertising, website development and hosting, and other marketing. You will need to hire instructors, and even the lowest-cost part-time instructors in lower cost areas generally make $20 or more per hour. Rent for even an ultra cheap warehouse type of space is going to be at least $1500 per month and often is in the $5000 per month range; because you are a startup business, your landlord may require you to pay a few months in advance or ask you to show additional reserves. Also, having $5000 or more on hand for working capital would be an absolute minimum.
Be Prepared and Budget Additional Reserves
The business model of CrossFit boxes is largely dependent on members paying $150 to $200 per month for a large number or unlimited number of classes. Your box will not be profitable right away. You will need to build a membership base to at least a break even point. Depending on how quickly you project to get to that level, you may need to have extra working capital on hand. Bottom line, someone looking to start a CrossFit box should not move ahead with the venture unless they have $40,000-$50,000 that they are willing to spend on the venture.