Is Gym Affiliation Worth It? How to Measure the ROI

Is affiliation worth it—or is it just another unnecessary expense?

In this episode of “Run a Profitable Gym,” Chris Cooper breaks down how to measure the true value of an affiliation or licensing agreement, using clear steps and real-world examples from brands such as CrossFit, Hyrox, CNU Stretch and Parisi Speed School.

You’ll learn what affiliation actually gives you (and what it doesn’t), how it compares to franchising and where a brand fits into your gym’s business structure.

Coop introduces a simple ROI formula to help you determine whether affiliation is helping you attract clients, generate revenue and improve retention—or just adding complexity without a clear return.

Whether you’re considering affiliation or questioning the value of your current brand, this episode will help you make a data-driven decision instead of guessing.

Links

Affiliation Comparison Chart

Affiliation Value Formula

Gym Owners United

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0:01 - Intro

0:49 - What does affiliation buy?

5:13 - Where a brand fits in your gym

9:01 - How to measure affiliation value

11:07 - Other revenue from affiliation

Transcript

SPEAKER_00: 0:00

Is affiliation really worth it? I'm Chris Cooper. This is Run a Profitable Gym. And today I'm asking the question that's on top of a lot of people's minds right now. Should I be paying for affiliation? And so what I'm going to do is break this down to give you a very clear answer. And we're going to address this in three steps. First is, what are you actually buying when you're buying an affiliation? And we'll start with that. Step two, we'll talk about the value of a brand in your business and how it can actually fit on top of what you're currently doing. And then I'm gonna actually give you a formula to measure the value of paying for different affiliations for your gym. Let's start with what is affiliation and what is licensing and what is a franchise and how are they different? Let's start with, what are you really buying when you pay an affiliation? In the fitness industry, affiliation is everywhere right now. Many gym owners pay to use brand names in their business title or for specific programs. It's a powerful move. Putting CrossFit on your door tells the world exactly what you do, and it often brings instant recognition. And the same goes for other brands. Putting up a High Rock sign shows people that you train and host High Rock style competitions. These affiliations give immediate clarity to prospects. Here are a few of the best affiliations for microgyms right now. First, Hyrox, which I already mentioned, at$130 a month currently, it's very, very easy to make a great return by offering a special Hyrox program or by running Hyrox events. The next is CNU Stretch. After a really minimal investment to train your coaches, the return on this is potentially enormous. It's similar to buying a Stretch Lab franchise, but you can build this right into your existing gym. And And you can even listen to a podcast with me and Evans Armentrading, the founder of CNU Stretch on Wednesday. Another one is Parisi Speed School. If you want to train youth athletes, a Parisi affiliation is the gold standard. And these are very profitable gyms and you don't have to buy a big, you know, whatever franchise to train youth athletes to do it. Larger gyms, you know, the big clubs might also license one of these like Zumba, which lets you run branded dance fitness classes with licensed instructors. or Les Mills, which is known for body pump and body combat and other pre-choreographed group fitness formats, or TRX. Maybe you're more familiar with that. TRX is Functional Fitness Equipment and Programming, which is often licensed to gyms for specialty classes. You've seen the straps with the handles. Now, these are not franchises. They're license agreements that let you use somebody else's brand in your gym. CrossFit, of course, is another example of a license agreement. You can bolt them on to whatever you're currently doing. And in some In some cases, the affiliation creates more revenue than the gym was doing before or on its own, but none require you to name the gym a certain way or carry their brand over yours or use a specific type of equipment. They also come without business support, and that's what Two Brand is here for. Affiliates are different from franchises. Affiliates are licensing agreements. Franchises are expensive to start with ongoing royalties to the franchisor. And many aren't the business in a box that franchises used to be. In decades past, franchises offered a proven business model with a full playbook, a dedicated territory where competitors couldn't open nearby, access to a strong brand identity and national recognition, equipment and marketing support, training and certification in delivering the brand experience. Fitness franchises like F45, Fit Body Bootcamp, Orange Theory, and Barry's Bootcamp—yep, Barry's is a franchise—they offer these promises at a cost. So franchises typically range. For F45, it's about$50,000 to$100,000 to start. Fit Body Boot Camp is$30,000 and up. Orange Theory is about$150,000 to$300,000, including your setup. And Barry's has an estimated total of investment of about a half million dollars. And these high prices once made sense. You were buying a nearly guaranteed success. But today, many of these franchises behave more like licensing agreements. You pay to use the name, you follow their instructions, but you don't always receive the robust playbook or support that was promised. It's no longer a guarantee of success. Now, by contrast, affiliates are licensees. You pay to use the name, but you get minimal support or instruction. There's no guarantee of success. There's usually not a playbook, but you're also not restricted either. So let's line these options up for a quick comparison. I'll share a little chart here. And as you can see, there's a sliding scale from pure licensing to full franchise control. So how do you... figure out what's best for you. Is it a franchise? Is it a license? Is it an affiliation? And which one? Well, if you're watching on YouTube, you can see the chart here and you can go to the blog link and you can take a long look at this chart and you can figure out like what's the best for me. But now the next step is to figure out what the actual value of that brand is to your business. Before you measure the value of affiliation or any brand, you need to understand where it fits into your business. So think of your business like like a pyramid, just like CrossFit's hierarchy of fitness, right? So the business pyramid starts at the very bottom with your operating system. This is like your base layer. This is how you do your billing, how you do your scheduling, how you do your payroll, your cleaning, your session plans, your staff training, all the fundamentals that really don't depend on a brand to determine how you do it. If you disappear tomorrow, can somebody run your gym by reading your playbook? Do you have those things in place for your gym? Do you have the four marketing funnels? Do you have referrals? Do you have organic social media? Do you have content marketing and paid ads? These are what bring clients in and you must be able to track their effectiveness. Now that marketing is the second layer of your pyramid. It sits on top of your operating systems, which is how you run your gym. So bottom layer, operating systems, next layer, four marketing funnels. Above that is your brand, okay? That's your affiliate or your license. That's where it lives. It's the third most important part of your business. It does not determine your operating systems. It does not determine your marketing. Your operating systems and your marketing will determine how well you use the brand. So brand does have help your other marketing work better, but it doesn't replace your other marketing. Brand gives you a very simple way to describe what you're doing. It's easier to say CrossFit than it is to say I do constantly varied functional movement performed at high intensity with various equipment and the changes day to day in a gym that looks different every single day that you come in and a fun loving community that supports you on your fitness journey. That's what the power of brand does. It gives you a way to describe what you're doing in a way that the listener can immediately visualize. Now, that is the third most important layer of your business. The base is ops. Then you've got your marketing funnels. Then you've got your brand. Above that, you have your unmeasurables, your culture, your relationships, your community support. These things drive retention, but they can't be measured. If you have bad culture, bad relationships, bad community, that will hurt your business, but it's less clear how you build those things. So Thank you. One important part of that is that your method, whatever it is, has to get people results. That's the non-negotiable part of this unmeasurable piece of the puzzle. So before you even ask, is affiliation worth it? Should I pay for a brand? You have to ask, are my operations solid? That's the base of your business pyramid. Then are my marketing funnels built and working? That's the next layer up on your business pyramid. Then do I track my leads? Like, am I good at getting leads? Then you say, does my brand... not the license, but does CrossFit or does HIROX actually generate leads and build trust for my gym? Now, from there, you can say, all right, now I'm ready for affiliation, now I'm ready for branding, and now we can measure whether affiliation or branding is right for my gym. And I'm gonna give you a formula to do that next, but first, I just wanna hammer home a point here. Your brand, the thing that you're licensing, CrossFit, High Rocks, CNU Stretch, Parisi, Les Mills, that is probably not going to be your marketing. It's going to make your marketing a little bit easier sometimes. Sometimes people will actually like be searching for CNU Stretch and find you or searching for Stretch Lab and find you. That's great. That's a bonus. But if you're depending on that for all of your marketing, you're in trouble. You need solid business operations first so that you know that you can retain the clients that you get. Yet, then you need good marketing so that with or without the brand, you can build a strong business. And then you pay for the brand to leverage whatever they bring to the table. And then finally, you focus on things like culture and community. All right, let's get into the formula to determine whether affiliation is actually right for you. I wanna break this down into measurable steps. If you want a slower step-by-step breakdown, just go to the blog that's linked in the show notes and you'll see these all broken down for you. So first, step one, check how many people in your area are searching for the brand. Use Google Trends or the keyword planner tool in Google Ads to check the city terms. So you want to search for like CrossFit near me, your city. High Rocks gym, your city. See how often people are searching for that monthly. And here's a tip. If the brand is generating local searches, it automatically has value. Step two is to track your leads. So every new client that comes into your gym, you want to ask, how did you hear about us? That is so important. important, and you want to record their answers consistently during intake, that will tell you which brands or licenses are actually bringing clients to you. Step three, this is the hard part, you're going to calculate the marketing ROI from affiliation. So here's the formula, number of leads that you get from that brand, times the price of your front end offer, times 12 months, that's the annual brand value. Okay, so here's an example. Let's say that you get five leads a month from people who are searching for cross CrossFit near me or CrossFit in your city. And your on-ramp is$500. So five leads times$500 times 12 months is$30,000 a year brand value. That's pretty good. You know, if you're getting five leads a month from CrossFit and those leads are each paying$500 when they sign up, 12 months of the year on average, you're getting$30,000 in revenue from paying for CrossFit, which is costing you$4,500. That's a great ROI. You got to sub your own numbers in though. And if you're not tracking how many leads you're getting you're guessing the value of the affiliation. We want to be specific. We want to take control of our business by actually measuring these things and doing the math to figure it out. Now, if you're getting enough just from your front end offer in attracting new clients and then buying your on-ramp or whatever, wonderful, like, you know, slam dunk, easy choice. There are other ways that you can make revenue from your affiliation. So for example, if you pay an affiliation fee to an add-on service like Hyrox or CNU Stretch, then you can measure the revenue generated from that affiliation versus the cost. So here's the formula for this one. Revenue from the specialty service, let's call it Hyrox, times the number of times you can run that service equals actual brand value. So here's the example. Let's say that 15 people sign up for your Hyrox training program at 99 bucks a month. and you run it four times a year, That gives you 15 people times$99 times four times a year, that's 59.40, almost$6,000, which is amazing ROI for something that costs you 130 bucks a month, okay? So now you can add that to the front end value of that affiliation. And now you can also calculate retention ROI from affiliation. So this is the trickier one. It's a little bit more vague, but you can still make it a mathematical formula. Again, like this is how you take control of your business and stop getting guessing, hoping, praying for help by breaking it down into the numbers. So let's calculate the retention value of your brand, okay? So make a list. Let's use CrossFit as the example. How many people signed up for the CrossFit Open through CrossFit HQ? I don't mean your intramural open. I mean they signed up through HQ and paid HQ to be part of the leaderboard, okay? How many people traveled to the CrossFit Games this year? how many people talked about or used the workouts from CrossFit.com. Then you're going to multiply each of those by your monthly membership rate. So here's the example calculation. Let's say that four people in your gym pay$150 a month, that's your membership, and they join the Open. Okay, that means$600 a year was the retention value of paying for the CrossFit affiliation. Now, let's say that three more people went to the games. That's$450. And one on-ramp client came from the CrossFit.com website. So your grand total of all those things, people who did the open and paid HQ, people who went to the games, people who found you through the CrossFit.com website is$7,050. So that was$600. It was$450. plus$6,000 a year for the client that came in and signed up and stayed for a whole year, okay? Now, the annual affiliation fee for CrossFit is 4,500 bucks, so you've got a positive ROI on retention there. And this is how you break it all down. And again, if you want these calculations, just click on the blog link below this video or below this podcast so you can walk through this step-by-step. This is how you stop guessing. This is how you take the stress out of all this and just break it down by the math. But if you don't track lead sources and you don't sell an on-ramp or a front-end program and you don't charge extra for extra things, meaning you add more programs and more costs and more complexity and more chaos and more coaching without attaching any new revenue to it. And if you don't retain people for 12 months, then the value of affiliation is gonna be hard to calculate and it might not be worth it for you. And these are, again, because you don't have the base of the pyramid down. You're counting on the brand to do everything for you and that's not its job. You know, I'm gonna honestly say that if you don't have operating systems, the gym can run without you, and four solid marketing funnels, including a good sales process, none of these brands are going to save you. And none of them should. That's not their job. So Before you de-affiliate, re-affiliate, affiliate, you also have to know it's gonna cost you to change things no matter what you do. But affiliation doesn't mean you're paying for somebody to solve your business problems or run your business for you or that you're buying a business in a box. Affiliation means that you're renting a brand. It's up to you to leverage that brand and to see a positive return. In the old days, Paying for a franchise was a virtual guarantee of success, but today you can be just as profitable and maintain control of your business by leveraging licensing really well. Now that said, affiliation is not a silver bullet. If your operating systems and marketing and client results aren't dialed in, then no brand is going to save you. Get the basics right first and then measure the brand's contribution clearly. The best part, if you're not getting a great ROI from any of these brands, affiliations, licenses, you can cancel them because unlike a big franchise, you're probably not locked into a 10-year contract. Hey, it's your business. Your business is going to change over time. You're going to add things, remove things, and change other things. A mentor can help you decide what to add, what to remove, and guide you through those changes. That's the hard part. I'm Chris Cooper. This is Run a Profitable Gym, and that's what I want you to do.