All right, Adam. When did you and I meet with it was a CrossFit a Miami at your level to correct. It was that was what was that about a month ago now ready? Yeah, probably a little bit longer. But but but the little while ago I assume since I haven't heard from you passed the test. I did I did I was it was questionable because first time I took my level two there was no test and so definitely a little bit more than I expected. But yeah, it was good. Good learning experience overall as always. Adam was the guy at the seminar that was asking a lot of questions, but what I enjoyed about you was It was clearly coming from a good place. You know what I think friend and I talked about it a lot other guess I've had on the show you can get away with a lot if you're coming from a good place of you know, whether it's understanding or just want to learn more or just curiosity and it was very clear that that's what you were doing. Yeah, the way I look at it is the day you think that you're an expert is the day you stop succeeding. So I was like to surround myself and talk with people that know more than me, right? I think that's what every on Tripping or tries to do its kind of surround themselves with people who are better than they are every good entrepreneur every good one. Yeah, that's right. Yeah, there's some bad ones out there that think they know everything but the reason I'm having you on his for exactly that reason you really struck me struck me as someone that was doing some good things not just as a box owner but specifically from a business perspective. That's what impressed me. I think we're sitting there. At the end of that first day and we were just talking about contracts and we were talking about all sorts of really new on see things that you were crushing at your box. So tell him to give give the listeners a little bit of you know, the ups and downs of Crossfit North North Port where you are as far as you know as much as you're willing to disclose financially but membership that kind of stuff just so they have an understanding of your background, right? Absolutely. So I have a background In business, I have a master's of business business and administration. I kind of finished that before I die drove into the CrossFit life owning a box doing that type of thing. I interned with a bunch of different boxes and Coach that a much different boxes just to kind of get a taste of things that I liked and that I didn't like and things that I'm able to improve on right that was a big thing for me. I wanted to create a better product. I think that's why all gym owners kind of set out and open their own gym is because they think they can do something better. Right and that's why I'm Businesses exist they want to be the best or they, you know want to be better than that other competitors out there. So I've been in business now for about six years like any gym or any business we have ups and downs for sure. I think a big component of maintaining a positive trend is going to be social media but based posts and good advertising and that type of thing but the biggest thing is is, you know, we have fluctuations just like anybody else so I would say right now we're sitting at around a hundred members. We're in a very small area. So it's not like we have a huge demographic info from I know Naples is a little bit larger than we are. I know you're up that way and demographic wise just household income is much higher than we are. So we're kind of like the person that Jim that stands out the most just because we are the most expensive in town and we do have a contract which is rare in our area so well, let me ask you what is your butt is your membership. So for an unlimited options, so for 12 months, we're at a hundred and seventy dollars a month. And what's the going rate? You're kind of on the outskirts of Orlando? No. No, we're down south from you ours. I'm sorry up north from you a little bit up North. So you're familiar with Sarasota. Yes, right. Yeah, so we're right. We're probably 15 20 minutes south of Sarasota. Okay, so you're not too far from me. That's right. Now we're close. You know someone 175 is that what did would you say the average rate in your area is man I've seen and I know I just met with a box owner up your way a couple weeks ago. I've seen from 145 a month no contract unlimited to 135 a month unlimited no contract and I think the guy that I met with from your way. I think who's buddies with the owner of I believe your old Jim. I think the he said he was at 150 and that Blew my mind because ten years ago when I got into CrossFit and I was I started at and you'll know this one. I started at CrossFit Estero. Oh you were down here you are you live down there? Okay. I didn't realize that. Yes. I know a lot of guys in your area that we I think we mutually mutually I have friends with so anyway, yeah, I started there and they were charging a hundred and fifty almost ten years ago, right? So it blows my mind the price is that I see at our local level because there's you know costs have only gone up they haven't gone down especially as the economy is getting better. Everything is getting more expensive. So I think it's interesting the approach that people are taking with this because this is more of a individualized service, right and that's kind of you know, you know that I'm buddies with Stu. And that's kind of what we discuss is this is more of a personal based membership. And so as prices go up your prices should reflect that or you're just devaluing your service. I sold my first affiliate in 2014 and our monthly rate was 180. Done. Oh, wow. So yeah, you're absolutely right about that. But but but talk to the listeners, you know, if a box under is listening, first of all, I want to say a hundred members is still very very good. I know a lot of boxes are like like we hear of the ones with 500 were here at that goes to the outliers. I always tell a box owner if you get to a hundred members, you're like, it's like you're the one percent right? At least. Let's do it starting to run. Just do it. I talked a lot about that right because you know, Jason khalipa is model is a hundred members per thousand square feet. That is a lot of members and maybe in a major city. But yeah, I would say that that's tough to accomplish those higher higher numbers and you could do like stupid box math of like a hundred members times this but but really if you have a hundred members and and you're running your business smart, you can make a good living, you know, you've provided yourself and hopefully one or two other people, you know, Solid career there. What was your process to come up with at 170? Yeah, that's a good question. That's that's one that everybody has I think you know when I started off it was much like a lot of box owners, right? I kind of didn't pay attention to the business knowledge that I had I kind of looked at the surrounding Market rates and I knew I wanted to be higher I will never be the cheapest gym in town and that's that's for sure always be the most expensive but I started kind of at that that Baseline at the I'm so when I started I don't I don't know if how much you remember. I'm sure you do was back in let's say we opened in 2013 and the economy was still rocky. It was just starting to come out of that recession that we had. And so I kind of just wanted to play it safe. And then from there I just went up five dollars a year and it will increase is to kind of get where we're at today. And that's the problem that a lot of gym owners have is not doing annual increases because they're afraid of how their members are going to take it. But if you do in small steps, it's no more than a cup of coffee. A day or a week rather. Well now they have month really right if it's me five dollars a month. So one thing I don't want to brush over is how important is your MBA in your success as a box owner. That's a tough question, right? Because I don't think everyone has to get an education to be good at business and we've seen that time and time again with some major major CEO's that are uneducated, but for me personally, it's been everything for me because it allows me to think. Think critically on how I'm operating my business and kind of strategize and forecasts my sales in my marketing, right and you know, it's weeks it wakes you up to the fact that this is this is a relationship business, but we can't forget. It's a business right? And that's what a lot of box owners forget that we're running a business and without the finances this business won't be around. Yeah, as you were saying that it kind of made me think it almost helps you remove Of that personal stuff out of it and look at it as a business where I didn't have an MBA and it was really very emotionally charged. All of my decisions were not so much. I should look at it as how do I run this business? I think in an ideal world most box owners would have some sort of business background, but that's not always the case and you can you could certainly learn as you go with, you know things such as this episode, right? So and there's absolutely there's so many tools out there so much free content that you know, not being educated can assist you with the that's the Facebook for my mean that can be a dangerous place. I see you posting in there from time to time, you know, but it can be a dangerous place because you have a lot of people just kind of inputting their their their thoughts, you know without having any background to do it, but there's tons of good podcasts like this one providing tons and tons of value out there for free and mean this and It was great. And I mean all the people out there are putting stuff out, you know, and like you're saying be careful who you're listening to I think it's always it's like anything the reason still was good is because he's done it right, you know, there's a lot of be your good because you've done it like you don't have to be we know we talked about it on a recent episode. You have to be the best athlete to be the best coach, but it helps if you understand what it's like to play the game, that's right. So Let's let's talk about these rate increases. You do five dollars a month, you know you increase your monthly rate by five dollars every year. No regardless of anything for the most part. This is the first year that we didn't do a price trays which is unique because we just purchased our building in November. We typically do a price raise in January of every year. What is my logic behind not raising my prices? You know, I don't have a lot of logic behind it. It just didn't feel right if that makes sense. It's already got my gut just told me so in business there's something called market equilibrium. And I don't know if you're familiar with it. So our get bigger. I figured it out with the two words yourself. I give me you gotta get it from the sounds like you kind of put yourself where you needed to be and if you go too far, you're gonna skew that balance if you will, that's right. So the market in the market aspect, there's only so much that The consumers willing to spend before it starts to have a negative effect overall on the business now. I don't think I'm there yet. And I don't think I'm anywhere close to it. But you know, we made a lot of changes a lot of changes all at once so I didn't want to say oh here we just opened a brand-new facility for you guys after years and years of support and now we're going to up you again, so I don't know it just didn't feel right for the price raise now that we will be doing a price raise again next year in January. So it will only be five dollars that was talking about 10, so you To go on just a set dollar amount versus a percentage, you know similar to you know, just Cost of Living. Yeah, it's you know, I just want it to be small enough where you know, it doesn't hurt people but it brings some extra Revenue to the gym. So one thing that's too kind of woke me up too and you're going to hear me probably mention his name a lot because he woke me up to a lot of things and I think it's a lot of difficult changes that box owners are afraid to make one of those is grandfathering right? I think I was very good. Guilty of that. Yes, you go on and I think we all are right again that goes back to the relationship kind of aspect of it, but not only that it's historical right so gyms have been doing that since the beginning of time and you know, it's a mistake. It's a mistake that has just continued almost gym over after gym owner and needs to stop right because as he encountered me improves or if it doesn't improve right those rates are going to change and we need to be aware of that and just because you're loyal to a product doesn't mean that you should Have that additional price increase right? It's that's a big thing like your cell phone bill is going to go up from once a month right cable. It's going to change after that year contract or however long period you sign is going to change based off the economy. And I think that's a big thing. We need to pay attention to is that so we stopped grandfathering in all together and we do minimal price increases based off of our membership size. $5 is really enough to kind of just help bring in some extra cash flow just to put towards equipment and No other investments into the gym. So yeah, let me take a second and talk about grandfathering. We when I open I believe our opening rates were eighty dollars a month in 2007, which is about two Thousand Eleven or twelve are Ray was about 150 and I had a coaching staff and they were still grandfathered in and part of it was talking with Chris Cooper at the time and part of it was my coach Kevin. He's like I need to make more and I was like heaven look here the numbers. And it was his idea and I was like, alright, you make it happen Kevin. Like he was my full-time guy. We became good friends. He made it happen. And you know, we didn't I tell the story we didn't lose anybody. This is substantial increase but it was it was needed to keep the business afloat. Right? And that was a tough time for you, especially because that was back in the day one when you mentioned CrossFit you almost didn't want to talk about it because it was so hard to explain to somebody, you know, a lot of people didn't know what it was and today obviously do to the games and you know, just how big it's gotten that that kind of factors gone. So it's much easier for Jim's now or even a couple of years ago versus when you started so well and it's understood what small group training cost is I remember $80. I was embarrassed to tell people of the prices like this is so much I understand and they were but when you come three four times a week to class of eight it was priceless. Absolutely a couple things I want to talk. We have video specific topics. We're going to talk about are your contracts but you every time you say something. I'm like Willie. I want to hear you own your building. That's right. So that's unique in this world it is you know, and again not to keep referencing stew, but he's helped me out a lot. So he kind of gave me the motivation to kind of go out and do it, right. So something unique with me and a lot of gym owners aren't going to want to live my life. Right. I am pretty much I have one additional coach. My wife said coaches. Well, she coaches very little we have three kids. Right? So we have we can dive into that may not work for my wife's. I mean, that's what go on. Yeah, right. So the point is I only have one additional coach and why is that every dollar that I earn I want to continue to reinvest into my facility and there's a lot of people that you know, it's do and I kind of talked about this in our last conversation. Was that a lot of the heat you don't own a business? Honest until you can step away which I don't necessarily agree with that. Right? He says you have a job and it is a job. But I'm at the end of the day when you own your assets and you continue to invest in those assets. That's yours. Right and nobody can take that away from you. So I'd rather work myself a lot of classes teach all the classes if I have to and then continually reinvest because it's just better for my clients. It's a better experience and that's what we're all about doing here is creating a great customer experience. Was isn't that the McDonald's model as well, right? They just have a lot more money than we do. Yeah, I mean but one day you'll get there and it's like owning your own home to you don't mind fixing the walls putting in a new door the garden because you know, you're investing in something that one day you'll sell regardless of what happens to CrossFit Northport. You have an appreciating asset now, that's right. Yeah and not to talk good. Sorry. Now the other thing I was going to say just looking at you you've professionalized it as well. It appears like you're dressed up to coach. Yeah, and you mentioned that I remember we were at the seminar that weekend. Yeah, he admitted you had your boobs. Yeah. I came in with a little lemon Lululemon Polo and we have everything embroidered in with our logo and all of our coaches wear polos. Now, there are some days Granite that you know, somebody didn't do their laundry and they miss a shirt or whatever that happens. But always are CrossFit attire always cross your Northport attire because it's a business. It's a brand if you go You in LA Fitness, you're going to see something LA Fitness related on that staff guaranteed. You mentioned coaches is your wife the only coach or she the only paid coach. No. No, she's actually she only comes in kind of when I need her. I have one other coach that's part time. He's kind of like my savior when I need you to know if you will so he works. Let's see one class a week and then he takes our 5 a.m. Fundamentals training sessions. So he's not working full time right now. I'd like to get him to that eventually. I'm not sure if she wants to get to that point, but that would be the end goal. So I don't have a lot of Staff but it comes down to the quality of my coaching as well. Like if somebody can't produce a quality product. I'm not going to put them out there and I feel like a lot of gyms do that. They're not as focused on the quality of their coaching her coaches and would rather just throw somebody out there so they don't have to coach a class and I'm not a big believer in that hundred percent. I mean how many how many hours do you coach a day? A week. Do you really want to know that so I start I start at 5 a.m. So we do personal training first. That's our model. I kind of took that from stew again, right? So we do five sessions all one-on-one and I'll typically start if my Coach can't cover around 5:00 a.m. That I have a 6 a.m. Class that I have a 7:00 a.m. Fundamentals and 840 class and then a ten am fundamentals and then four five six and seven at night and you clench almost all of this if not much pretty much all. Yeah, except occasion in a hole in the ground spectrum of the world. I'd say you got a good job, right? You know, absolutely but it is a lot of hours and you can see why that was what I was doing when I open it. It's like first person to get to your level 1. I don't even think they had it. I was just like you can coach right and then bro, so you see where that's happening and I think the the world of CrossFit coaches are being developed, but it's still mean you were at your level 2 you see What's going on right now? Like you see that? Yeah, you you leave your level 1 and if you're not getting developed you come back to take your level 2 and you're still a really bad coach write your fault. You're not working on it would be like trying to get your MBA and not studying not reading a book. You're not going to pass the test. So it's impressive that you coach so much but we do understand why people are putting in subpar coaching and they need to work on developing them. Absolutely. Yeah, so we have a part of I'm sorry to rush you have a part of our process for getting started as a coach and internship process and we actually have somebody going through it right now and that's six months doesn't guarantee. You're going to coach at all. You have to work a minimum of six hours per week and it starts off with just shadowing. You're not doing anything. You're not talking. You're just observing. That's it. Right. So we start them there and then gradually they start to kind of increase in capacity and what they're doing within the class but we start off really slow. It's a learning experience. I tell them straight up like look, this is not guaranteeing you a You're not going to get a membership discount just because you're interning it's not going to happen the value in this is knowledge and that a level 1 course as good as it is. It's not going to be as valuable as this because it's Hands-On training. It's a lot more hours than you're going to get from those two days. Right? And so that's what we start off with if they do well and I put them through a stress test at the end where I slam a class and they have to finish on time make all you know, scaling modifications needed for individuals and have Have no problems, you know perfect finish and so I'll put them through the wringer a little bit. But if they pass then you know, we'll pay for their level one to kind of go into it and that's probably not probably that's really great too. If someone is actually looking to make this a career and learn what better way than to be immersed in it exactly as you're doing now the topic I really want to dive into because this is I think you and I were sitting there and I remember talking about contracts and You know my I think what happened was you told me to contracts and I was like, yeah, but anyone can break them in any time. Have you ever seen anyone and you were like, yeah. So so so let's talk. Let's talk about that. A lot of boxes have contracts and I say contracts with kind of quotes because they're not really meant to be uphill. Yeah, that's right. So there's there's you know, the contracts like you would get at your typical gym your LA Fitness where you can't breach this contract and if you do you're going to owe x amount of dollars in a lot of boxes just kind of put it out there and they discount all of these tears of time but at the end of the day, Not going to follow up anyway, so what's the point but you on the other hand have actually sued your members or ex-members. I should say if they if they try to breach the contract. So give me the whole story of this. The whole story well why you started with contracts and how you got to where you are, right. So let's take a look at the principle behind the contract. Right? If I if somebody signs a 12 month, let's say agreement. They are going to receive a discount from my regular rates. So our drop-in for say a one-hour class if somebody didn't sign any contract would be $25. Somebody comes one time. I come into town $25, you know, $25 know by t-shirt, right? I hate that whole thing. It's cost you this much to take class. Our t-shirts are extra. All right, right. And and that's the problem with that's CrossFit Gyms have continued like it's we need to wake up its business owners. There's a cost to everything and I'm not going to give you a t-shirt for free. I appreciate you coming to our gym, but you won't get a t-shirt for free that's going to be my snippet for this episode. Just so you know, but yeah, okay, I like it. So you got the drop in rate of 25. What's next? All right. So the way I look at it is if I'm going to give you a discount and that discount if you look on our website, you'll kind of see it and I think you're looking at it right now. You'll kind of see it broken down price per class. Right? So you'll see as the commitment level goes up. The price of the class will reduce and you're getting that discount. I'm devaluing my service because you're committing to 12 months. Right? So a lot of people aren't going to pay our to 20 a month rate for unlimited classes, which is discounted on from our job, right slightly, but it's still too. $20 a month, we do have several people who pay that who don't want to be put into a commitment. So we're not forcing people into contracts. It's not like that's their only option is to sign a contract. That's just if they want the best price they're going to have to commit to right. So if I give somebody a discount say, let's say the sound a year at 12 months. I give them a discount now, they're getting a discounted class. If I don't enforce that now I'm out all of that money right now. They've had all those months of service and they had six months of service. That was discounted and now they default on their contracts and now I'm out a lot more money than just the cost of the contract, right? Yeah, so first of all your websites beautiful, so guys check out Crossfit North four.com. I've know if you did this yourself or know, I have a good graphic designer that this is a use. It's a very good website and it's laid out super well as far as the pricing so many websites for in the cross a world. That's like we travel a lot and I want to figure out their schedule this it's like impossible right figure out keep it simple now, but what you said, Do you know you're devaluing? Is that the right word there? So if you're just doing what a monthly rate that's at 145 without a commitment. Well, you say your month to month unlimited is 220 right people commit to 12 months. It's 170 and maybe it's just semantics you said. Hey, I'm devaluing. I would say you're not devaluing what you're offering a reduced rate reduced rate because they're committing to you right and no different than so many subscription websites or anything you pay $19.99 a month or if you commit to a year it comes out to $12.99, but you're right. So the point being if you tell me yours. To do a 12 month contract for months in you want to quit? Well, you've saved yourself $50 a month $200 over that period of time, right? Yeah. I think that's a better way to word it there. But what the challenges are right most box owners just kind of chalk it up me because that's what I said to you. I was like, all I have to do is call Chase and be like, hey, don't let these guys charge my card anymore. Right and it's a little bit more difficult to do that when it comes to a bank account. That's one of the other beauties of using So and we didn't really talk about that but we use EBT or the automatic Bank withdrawal penalties. Yeah, you have to we don't allow credit cards or debit cards or anything like that and for box owners listening you pay less of a percentage on that as well. That's right significantly less. We had almost a thousand dollars a month in credit card and debit card transaction fees. So if you're listening to this me, if you make that change you just saved yourself a thousand dollars is not unrealistic. Right and you know it's a scary kind of approach to to take and I was afraid to take it at first and you know, I had some guidance there and push me in the right direction and it saved us a ton of money when they guess it was still it was still good. Yes. Yes. That's what was scary about that. A lot of changes, right? So we did everything at once and we take a lot of people off and sometimes you just have to be okay with that as a business and a lot of Corporations do that every single day, right? So, what did we do all at once we automatically stopped honoring grandfathering in prices old prices. We stop that right? We allowed people to finish out their contract that term they had left in their contract at that grandfathered rate, which we don't have to the way our contracts right now, but that's fair. I like yeah. Yeah, it's fair because you know, they Into that it would be wrong for us to kind of back away from that. Right? So once that was done though current rates would apply we removed teachers discounts room removed fire. No first responder discounts got real all that and Military Discount, no discounts only discount we have is couples discounts. That's it. And the only reason I do that is because you have a lot of money coming out of one household, right? Yeah. It's two people from one house. What's the discount on that? I'd have to do the math. I can tell you intend to 10% 15% type of right around there. Yeah, get around there son. Yeah, it says please inquire for information and I think that's fair, you know. I don't think there's a right or wrong whether you want to Discount Elio firefighter military teachers. You can go crazy. It's like oh you just kind of teachers but there are people and I love teachers my mom's a teacher I used to offer discount but it's like what about the people that are working their ass off at McDonald's that can't afford that where do you draw the line? Then that's a good point. You just brought up because especially with the First Responders discount. We have a lot of Physicians that come to our gym and we had Physicians that were mad because they weren't getting a Scout and First Responders were right and they made a good point. Right why our First Responders getting a discount when I save people every day as well maybe in a different way. Why am I not getting a discount and then it gets the point where when is like enough enough? Right? If Starbucks a multibillion-dollar company can't afford to give discounts. Why can I afford to make to give these discounts when I'm only making six figures a year in terms of the gym, and he was saying all these changes you made I think to some extent it was like just ripping off. The Band-Aid probably better than hey Adam, you hit us with this change three months ago. Now this change here it is. Did you lose any members? Absolutely. She's okay. I wasn't expecting that the how many did you lose? Not a lot not a lot. So we muscle a couple and we lost a couple of our are you know original members there, right? So and the way I looked at so we lost about just kind of touch base on that. We lost about eight or nine numbers. I want to say which was kind of disappointing. These are people that are with you from the beginning five five years or so, right and then they decide to leave and you know, you kind of feel upset about it as a gym owner and these relationships you build but at the end of the day, they didn't see the value that I brought to the table and if they didn't see the value I failed on my part or B. They just didn't care about it anymore. Right? They don't care about coaching. I don't care about the facility. They just want a cheap place to work out and get us wet on which is cool if they want to do that no problem, but this isn't the place for it. That's what I was going to say. And you answered as could say well whose fault is that and you need to tip the ownership, right? If they're willing to leave its it's mutual right? It's right. They need to see it but it's but I would guess even if you lost nine people you far exceeded that with what you brought in. Absolutely. Yeah, those price increases in price changes made up for all those people that were lost and then moving forward. It was just easy from the beginning, you know, which is goes back to what we talked about the beginning. It's like you have a hundred members, but if they're all paying full Price you don't need 200 members. You don't need me. No, you don't it'd be nice. Right but there's a number where all right. I need a hundred people paying full price and have we when I did my increases like we had 500 members, but some were pay 80. So I'd rather get rid of them have this space. So when someone new comes in willing to pay 180, it's not a not a problem in class sizes or equipment. I'd rather have all my members and that's part of it as well. You're discounting people. They're all using the same. Equipment, they're all using the same floor space taking the same bandwidth from me as a coach. Why are they getting a discount? You go to the movies you get a seat. We're all paying the same thing. That's right. Yeah. That was my biggest thing there. It's just we have to the discounts have to stop and I hope if anybody hears this and the grandfathering we need to put a stop to grandfathering and you know, a lot of people have all my members going to be ticked off her. That's not right. I promise my members they'd have this for life, but they're nice enough. So did I yeah, Mine wasn't a they were my first people I mean the Box wasn't even open and I was like if you want us to stay in business, we have to get rid of this and I did a couple things where they can pay upfront similar to you like right out there contract. It wasn't like you're going from 80 to 180, but it was we need to make a change now. Go ahead. So kind of touch him back on client numbers because I heard you talk about that. We need to be less focused with the amount of members that we have and focus more on the values. Value of that member right how much money they're spending within a month? I'd much rather have 80 members and have their average client value over 300 a month than have all those other members back, you know for that little bit of money and you'll tend to see that the people that are safe or in your case paying $85 a month. They're going to be less likely to take on other services. You may have buy products. You may have that are fairly pricey right there. They're just shitty remembers. Let's put it he's like that. Want discounts are your worst members, right? Yeah, and I think Cooper calls it average revenue per member your arm, you know, and whether it's selling supplements or in your case, probably doing more personal training, that's the goal. And the truth is if I have eight, you know, every additional member is just a headache, you know, whether it's an email whether it's in class. It's just more people to heard the yeah less people paying more the more they pay and it's it's not like you're a better. Better person but they're better member, right? Absolutely and it's better for everyone all around. So take me through the first time you had to actually take someone to court over a contract. So the first time I went to court I did it by myself, right? So that was a learning experience altogether. I filed all the paperwork went to mediation watch. Somebody cry in front of me that I already had a relationship with and I pretty much had to tell him like look, you know, I valued your men. You being at our facility, but I also realized that I have kids right about you not paying and you committing you're taking food out of my kids mouth and that's just being real. I'm a small business owner. I'm not a big, you know, five gyms in you know type business here. I have one gym and every dollar we bring in is important and so I tried to kind of relate emotionally on that end with with the client because they were in a similar situation, but at the end of the day she didn't want to settle And contracts are contracts and if you breach your contract a lot more money is going to apply right interest attorneys fees which at that point then I did get an attorney court costs and all of the time spent on it. So it's in everybody's best interest just to kind of you know, settle up right. So do you remember what you wound up getting for that? It was so it was a year contract. I want to say the first one was fairly very new into our business. So it was the first year that we opened. I've been so I said an example from the start because you let one person go then you know, it's your soft. Everybody's going to take they can get out of it. So I made a statement from the beginning that this isn't going to fly, but we're very upfront to with our contracts. We tell people we don't do cancellations. We don't do buyouts bottom line. Yeah, and I don't for one second thing. This is like your there's A bunch of small fine print at the bottom it's obvious and because of that it's like so that if you don't like that, here's the six month option and here's some of the month option you don't you don't have to do this, right? And that's something we try to be very clear about when in doubt do a month, right? You don't have that initial savings right off the bat, but at least you're sure right. So yeah, that's something I think people struggle with every once in a while and then get into situations where they live outside their means, but we can't act as advisors for people in terms. Is of that, right that's on them and to be clear is there if someone had done a 12 month and they want to get out. Is there a buyout fee could they? Is there a more easy way to end it than going to court It All Pro. Hey, so they have to pay it that have to pay and we say that right up front. We don't allow any cancellation 0 by O2 or financing a membership. Just like your financing a car. That's what we tell them just say year vs. 5 and so The flip side if people tried to leave and been okay with it. Like hey, I accept it. I you know sign this contract. So yeah, we do have some people that they won't even really tell us they're leaving. No just stop showing up and we're very good at checking in. I have a call list every week that I follow up with some people and some people just keep giving excuses and you know, those are the people have no intentions of coming back but we try to do our part and get them in here. But, you know, they're not going to resign and they're honoring their agreement. So As long as they honor their agreement, I think a lot of people it's we don't get as much of that. Now that our prices are higher as we did when they were lower right and at the end of the 12 months so they have to re-sign or does it roll over into another year? No we have to resign because normally our rates would increase so every year you have to you know, sit down with somebody and that's important as the Box owners. Well, because when that contract ends you're at risk now of losing a member because it's an opportunity for Just say no. I'm good. That's right. Do you think they should do that with marriages like a one-year contract? Well, I think everybody should get a prenuptial agreement if we're talking on marriages you are definitely get this is your video. That's if your business owner right rain going on. Yeah, my wife wasn't too happy about that one. She's probably like I have more money than you that's fine. So now how would you recommend a box on her Implement something like This how would they get started? Because if you are going to be willing to take someone to court your contracts have to be done properly absolutely get an attorney. No, Florida statute. That's the biggest thing or at the statute of the state that you're in right? It's a very important thing to know in Florida. For instance. The Department of Agriculture has to approve your contracts. You have to send them there you have to show the terms, right? They have to be able to read through it. There's certain statute that needs to be listed. Batum exact font exact though exactly the way it's written and it without that your contracts not valid get an attorney. That's the best thing you could do back in the day. When I started I remember on the I was on the affiliate page and I asked somebody to hey, can you send me a copy of your contract so I can take a look and that's what I did and it helped me a lot and that was kind of a basis of getting started. I later found out that there's some loopholes we had we have had some people get get away with. Not paying their membership in the past, but those have been fully closed. So it's important to talk to an attorney. Right? What are some loopholes? What did we have? So oh one of the things was the state statute not being written correctly having more than one point of contact. So it was like if you'd like to cancel your membership, you can either email us here or send us a letter here and it's got to be the exact in state of Florida. It's got to be the exact same contact for something as small as that can make a contribution. Boy, Dino. Yeah what I had my box. I had a lifetime membership and it my attorney was like, you know, this is illegal, right? Yeah, and I was like, but I do like, you know change the wording get everything. I didn't even like I had to get everything done where it was like we backed up we had to put money away in escrow in case all is all crazy, but you don't think about all these things as a small business owner. Yeah in the State of Florida, you're required to have a certain Bond required if you have contracts And actually that's false. It depends on the amount that is required upfront. So for us because we're over I think it's 10% of the yearly contract. We have a three hundred and seventy five dollar fee for all new people who are going through their fundamentals. So it's five private one-on-one sessions. I ran into that issue where it was 10% because I used to not be required to have a certain Bond and somebody just got out of a contract because of that even though I didn't default. I have plenty of money in our bank to kind of back up their membership for Year, it didn't matter right it's because that was more than that 10 or 15 percent or whatever it is. I don't recall off the top my head down. That's more than the contract price. So yeah, it's important to know your numbers know your statute talk to an attorney. That's the biggest thing I can say and enforce if you don't enforce it's nothing. Yeah, and that was my point to people, you know, I've done some Consulting and people talk about a contract and I'm like, are you going to take these people to core? They're like no and I'm like well, why are you discounting your Membership, then that's my biggest gripe with it. It's not about contracts are bad. It's that if you like you see with Adam, he's discounting as membership $50 if you sign it, so if you're going to do that, make sure you're willing. I think there's nothing wrong with what Adams doing. If anyone's listening some people are going to listen about this has a dick not he's a business owner and if you're not willing to do what he's doing, you're probably not ready to be a business owner. I mean and granted this box owners. I'm sure listening. And I'm telling you like this is how you're going to your box can be successful. This is how you guarantee your boxes successful in 10 years. It's you know, you might be doing well right now. Are you going to be one of the crossover Affiliates thriving in 2029? That's that's the key to it. You know, I think we need to start a new hash tag bring back the contract. That's what we did in price tag. Bring back the contract. I like it head. Has anyone left gone through all this and then just left you a terrible review online. No. No, but here's the thing if they leave a review and it is false. Now, that's a whole different lawsuit. So it was like this dude went to court over this. I'm not even mess with him anymore. Right usually if it goes to court and I mean, we always get judgment within one or we've only lost twice and it was because of some bad areas in our contract that are now fixed. But yeah, I mean if we're going to go to court they see you I'm not playing around and that's not me trying to be a dick right and I know some people listening will probably think oh, he's a dick like You said I'm a business owner and I have three kids right? I want my business to be around the next 30 Years, you know, whatever that that future will be 30 years from now. I want it here and I want to continue to grow and without this growing is hard if you want to go and sell your gym, you don't have a contract. You just have some numbers on a piece of paper and like oh, yeah, you know, I'm projecting I'm going to bring this in over the next few months cool because if I come in and I want to buy your business, I don't care what kind of numbers you have are your current members because if it's not locked in it really doesn't mean much. Jimmy I'm just what I'm going to give you value on your equipment. That's all you're going to have because most people don't even own buildings. So I'll buy your equipment right that's sent to that's a hundred percent true. You know, what you people like I get asked all the time about how do you value your business? And if your members can leave the day after the sale, it would be very silly to buy a business. absolutely, you know and and like you said I think Box owners listening to this there's nothing wrong with make you know, professionalizing your affiliate of whether it's you're married or whether it's you have kids or your single person. There's it's like you shouldn't feel guilty for trying to run a successful smart business and we do this I think we all do it because we love it. You know, you have an MBA you're training people at 5 a.m. Because you're passionate about helping others, but you can be both you can you could enjoy helping others and also, Really making sure your kids, you know are fed. Right and let me clear something up. Right if somebody runs into a difficult situation. We are more than willing to work with people and I think we need to show some empathy to an extent. Right but at the end of the day, it's just how much you're going to show. So if people need some assistance say they need to, you know, need a month or two to get caught up. We'll give that right and we won't charge interest or any of that stuff, but it comes to the point where people just try to default. That's where it becomes a problem if you default if you don't Let us know what's going on. We can't help you and by that point, you know, we're getting hit with fees for bounced checks, you know, or what it is and now we're going to have to pass that on to you and now it's become more of a problem. So I think you need to have a balance for sure. I think you need to show you're willing to work with people but don't be afraid to enforce. Yeah and wish and I'm glad you said that because I know even when we talked at the at the seminar you said there are people that have had issues and it's not like you're suing a homeless person. You know who's out on the You can't afford your membership a anything else. I mean, I think the three nuggets that we've talked about is ending the the grandfathering in a memberships switching over to an EFT versus credit card and charging a fair amount for a drop in fee doesn't have to be 25, but it has to be this is your payment to be in this class. Anything else is additional any other tips. You would give to an affiliate owner and I'm sure if I was gonna say, I'm sure he loved it. None. But anyway anyone any other good one will go about what you were going to say. Absolutely. Let's let's keep it cool. Keep it short continuous Improvement. That is the biggest practice that we can have not only in our business but in our lives right always try to continue to improve your service to your clients. We do it all the time, you know, I'd rather invest into my facility to create more value for my clients that allows me to justify charging more also, but I'm always reinvesting. I'm always figuring out ways to improve and you can do that a lot of Always right with equipment that you're providing the gym your cleanliness the cleanliness of your gym, which is a huge factor that people neglect little things like we have towel service at our gym something small, but it's something people appreciate always look to create more value, especially when you're going to start increasing prices. You want to see the value there and coaching is an important aspect and know we pride ourselves on being good coaches, but I think every box owner does that so you need to do something that sets you apart from your Market if you go on our website CrossFit Northport Dot Cam Shameless plug you'll see that we practice that right. We want people to come in here and be blown away with our facility the way it looks we want to attract people that are willing to pay for our service. So we will continue to invest in I recommend that all Jim do the same. Yeah. And again, we said it earlier but it starts with your site. I mean a lot of times that's the first thing people are going to see here your site is crisp. It's clean. It's simple to navigate you your there's Video of what your affiliate looks like and it clearly looks clean. So a lot of nuggets on there, which is it's just awesome to see in this day and age in the affiliate world. So congrats to you. Um, I always like to ask every guest any book you recommend. Yes, a couple of them actually psychology is selling great book that book has changed my business tremendously being confident in selling in knowing how to relate it back to somebody that's a very very important thing to do and our industry right? We're constantly selling seller be sold premise behind that book, you're either selling or being sold to and that's going to change your mind, you know in life in general right to help you with every negotiation you do and then the other one That's what I just read never split the difference. That was a great one Grodd. I use that with my wife. She doesn't know. You know, what's funny same thing. I listen to that on my own in the car. His name was Chris Boss or Rich Vos. That would be I'd yeah, he's yeah a couple of Austin malleable mentioned that book as well when we interviewed him and great great book. I highly recommend that and I'm sure the other ones are great as well. I just happen to have read that. Well you have to It's like eight more classes today. So I was right how I'll let you go. But you see I did want to ask you seem super regimented. What are some things you do to stay so organized in your life. So if I had if I wasn't on my computer at give you a script a little screenshot. I have a glass whiteboard to the left of me. It has my projected sales for the month. I have a nice check mark by because I've fortunately accomplished it this month right at the end of the month. Nice job. We're at the end of the month, right? I always try to every time I beat my sales goal. I increase it every month. So I think that's an important thing always reach your goals that stuff. It is cleaning your friend time. Now, you got to do better. All right, but this is a lot easier. So yeah, I just have a white board. I write everything on it. I have personal training sessions. I've done for the month. I have number of signups fundamentals nutrition signups. I have daily tasks like, oh do an Instagram post each day get your programming done follow-up your calls and then I have a lot of stuff in my calendar. It's Important to have a good scheduling system. We use calendly for the business and it kind of integrates. It shows any potential clients and current clients slots you have available and automatically adjusts. I'm sure you're familiar with it. Yeah. And so we use commonly. Yeah. It's a great great service write everything down, you know schedule it out in your phone. We have so much technology. We just need to use it to stay organized and successful just follow. Yeah, one of my mentors used to say to me the mind is for thinking the pain is for remembering and you know being Your phone I mean I use my phone as well because it's like you want to clear that bandwidth and it could be something insignificant. I write it down just so it's like one less thing to think about. What about your own training you find time every day. Whoo, that's a tough question. So not to make it too long. But so when I first started off just like a lot of gym owners. I wanted to try to make it to the games. Yes, we all laugh and smile like that. But that's the are all I say that you work out. I only laugh. Thanks. I appreciate that. So yeah. Nowadays, it's not anywhere near the same. So I used to train two hours a day religiously joying, you know competitive programming all that type of stuff did not focus on my business as much as I should have and because of that I didn't grow the way I should have right. So now within I would say the last two and a half years I've shift focus and now I'm lucky to work out twice maybe three times a week on a good week because I'm that much more focused on my business, you know, instead of trying to make it to Regionals, which Never was going to happen for me. I need to focus on something that was right there in front of me that I've already invested my life into which was my business, right? So now my main focus isn't my friend time. It's how many members have signed up this month? Did I beat my last month's sales setting those goals just like a PR and trying to beat it. Every month is much more rewarding than a faster Fran tab to me at least happy wife happy life. I'm sure she's appreciative of that and it's not as if You're not fit I was you know, you still two to three times a week really at the end of the day. That's all you need. That's all you need. I mean emotionally just from where I was at before and the numbers I had before I think that's hard for all of us, but I'm also getting older now too. So I need to realize that what's important right? I think we all do and and I think you could probably be honest with yourself. You can probably find another hour if you really wanted to write so opportunity costs. That's another little tidbit will throw their so any hour that I spend working out and I try to make at least 3 hours a week is an hour of lost Revenue, right? So I could fill that with a personal training session. Okay. Let me ask this to me last question though. Yeah. Can you take that? I mean you could take that to the extreme you could like. Hey kids. I'll see you in a month. Daddy's got to go to work right like at what point work. How does a box owner? How does Adam find that balance? Where is that cut off? So I wouldn't say I have found that balance. It is blatantly honest with ya. Right. So my wife I would say takes a lot of responsibility on for our kids every single day. So she's a full she works full time. She she's a district district manager for a big bank, right? So she's traveling a lot and then she picks her kids up from daycare does all the stuff she comes down to the gym just a quick workout. And then she's taking care of the kids the rest of the night. So I try to shoot for one evening off a week, but when I'm busy like we are now, I don't take any time the first vacation I've had in over two years was this past weekend? And it was extremely hot in the terrible idea. We went to Disney. So yeah, not a vacation specially with young kids as I do you have kids. I don't have kids now. Okay. What I've been to Disney with again. I'll let you borrow my kids for the weekend. You can see the experience. That's my God the box so much. That's right. No, so yeah finding the balance. I mean, I'm not happy with where I'm at yet. Do I don't know. If I'll ever be happy with where I'm at because minute we're happy is and then it we start to fall behind in my mind, right? So I know you've listened to Gary Vee. I'm sure you have I like a lot of his stuff. You know, I don't think it should always be nonstop work. But right now I'm young. I have plenty of time to not work when I'm older. So yeah. No, I mean hey, I love what you're saying. I think you know you finding some balance would be great. But I also hate for 10 years when I owned my boxes. I was the same way cost me plenty of relationships, but I wouldn't be where I am today and I think you're doing it. Right and it's awesome to see I hope everybody listening really benefited from this F. I were a box owner. I've been taking notes. I think that's some really great stuff we put out there. Well, I appreciate you having me on here. It was a pleasure just for people listening check out the site CrossFit Northport. What's the Instagram at CrossFit Northport? That's right at CrossFit in with Andy of a personal one. Yeah, but we're not going to I don't even use that thing. So I'm asking is on our page and yeah because you have It's tough. So is your they can email you right off? I think your phone number was on there as well. So if they do have specific questions, you can always reach out. Yeah, it goes directly to me. It's a business line, but everything, you know goes right to me. Oh one other thing just want to add in there real quick. I know we're short on time. And this is kind of what happened with that box runner from your way that came down sodomized everything automatization. Is he right now? It's key if you want to run a business and you're short on staff and don't have a lot of stuff like me automation. That's that's where you guys need to be at. That's the best thing. I think I could recommend for anyone, you know, probably a lot of what you listen to I listened to its eliminate automate delegate and I'd say one thing to throw on top of that is too many people automate things. That should be eliminated. Right? No eliminate. Hey, yeah, and then you should be automating everything right good stuff Adam. I really appreciate this was great. Yeah. I appreciate you having me on maybe we can do it again sometime, but absolutely there's a I'm sure we can have you on numerous times and not run out of things to talk about. We said to find time in your day. I'd rather you work out during this hour, but that's three hours is all I need. 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In this episode, Jason Ackerman sits down with Adam Tar, who he met about a month ago at a Level 2. Adam is the owner and head coach at Crossfit Northport, wit his wife Sarah Tarr. What really impressed Ackerman about Adam was what he is doing from a business perspective within his Box. Adam has a Master of Bussision Admisionton, which he stated has not only allowed him to be the most expensive box in his area but also have a solid membership base of 100 members. Adam takes a very hard approach within his box, where he coaches 90% of classes, has very hard but ultimately fair internship program, and hold value in contacts to ensure his business stay alive. They discuss all of that but also topic like Grandingfathering in, going to court over contracts and my EFT should be your membership method of collecting. This may seem like some hard issue to face for many of us as box owners but Ackerman and Adam example why they are so important mostly because it’s allowing you to ensure your future. Check out the extra content about this episode on besthouroftheirday.com Rate/subscribe in Apple Podcasts! Find us on Instagram: @besthouroftheirday + @thejasonackerman Check out our website - besthouroftheirday.com - to learn more about our private coaches development group. 