Latest News from Rally Fitness

The Business of CrossFit: An Update on New Market Research

New Market Research on CrossFit 2017

A couple of years ago, we shared some market research data related to CrossFit facilities. Since 2014, there have been BIG changes and its growth graph now looks like a hockey stick!

According to a recent report from CNBC,By the numbers, CrossFit  is possibly the biggest fitness trend in the world. CrossFit has 13,000 gyms in more than 120 countries, up from just 13 in 2005. That's more than the 12,521 Starbucks  locations in the United States. Its direct rival, Planet Fitness, has just 1,124 locations.

With 4 million CrossFit devotees, roughly the population of Los Angeles, it is crystal clear that this fitness program – which some liken to a cult – has tapped into something that was missing in the fitness industry. What was this missing ingredient?  That’s hard to pinpoint.

Is it the shared pain of a CrossFit group? Perhaps it is the camaraderie that results from this pain? Most likely, many factors have led to this explosion of popularity, but the basic premise is just as simple as it was when Greg Glassman started it.

CrossFit workouts change daily and contain variety to keep its membership on its toes. The regimen consists of functional movements that aim to increase individual work capacity and is applicable to other sports activities. CrossFit also encourages its members to follow a Paleo diet.

By the Numbers

As noted in a Quantcast Analytics report, the vast majority of CrossFit members are between 24 and 34. The breakdown of CrossFitters is as follows:

Under 18:   18 %
18 – 24:        6%
25 – 34:       42%
35 – 44        19%
45 – 54         8%
55 – 64:   Less than 3%
65+:          Less than 3%

Gender

Men and women are represented equally as CrossFit participants

Ethnicity

The percentage of CrossFit athletes who list their ethnicity as “white” is 86%

Earnings

Over half of CrossFit participants have an annual income of greater than $150,000

Families

The percentage of CrossFitters with children is 59%

Education

The percentage of CrossFit participants with post-graduate degrees is 40%

CrossFit workout with RallyFitness gym equipment

Business is Good for CrossFit Affiliates!

A report from Channel Signal, a business analytics service, notes that the failure rate of CrossFit facilities is less than 2%. This is a remarkably low failure rate.

According several media sources  “affiliates pay a fee to use the name CrossFit, but then that's basically it. Affiliates are also locked in at the fee they paid when they joined the network. CrossFit founder, Greg Glassman said he has some early affiliates who still only pay $500 a year. The current licensing fee sits at $3,000, and Glassman doesn't plan on raising it anytime soon.

“The Reebok CrossFit Games aren't a major source of income, even though the event draws 15,000 people through its gates daily. The Games attract sponsorships from fitness companies, but the vast majority of those deals fund the prize money. Last year the Games doled out $2 million in prizes.

Another huge part of CrossFit’s appeal has been its ability to scale.  According to a report, “Once a prospective box owner has completed his or her certification, the barriers to entry are quite low. CrossFit gyms are called “boxes” to emphasize their low-tech bias. Many are opened in former industrial settings, within garage or loading-bay doors for example, offering access to fresh air.

Start-up costs are so low and most boxes offer monthly memberships for somewhere around $200 per month with additional discounts for long-term commitments and for active military, police, fire personnel, and teachers.

Early Adoption of Social Media has paid off Big!

CrossFit social media adoption

The small but dedicated management team of CrossFit has shown amazing insights about how their members consume media. CrossFitters don’t watch a lot of TV, listen to a lot of radio or read a lot of newspapers. They do, however, consume a boatload of social media such as Twitter, Facebook and others.

Quartz noted, “In the beginning, CrossFit gained converts by posting daily workouts on a no-frills website. It still does, but now those daily workouts are also mobile-friendly and broadcast to CrossFit’s 864,000 followers on Instagram.

“CrossFit has also launched several Instagram stars. Two winners of last year’s games—Camille LeBlanc-Bazinet (Facebook profileand Rich Froning —have 600,000 followers and over 450,000 followers, respectively. And Instagram has also made stars of some of the sport’s more photogenic but perhaps less accomplished athletes like Lauren Fisher  (398,000 followers) and Brooke Ence (154,000 followers).

It has been noted that CrossFit has followed the lead of Uber, where affiliate assume the costs of capital while the lean and mean corporate management team led by Glassman manage the image and innovations. “Whether purposefully or through a fortuitous accident, Glassman’s diffuse, no-frills business model has transformed a bunch of fitness nuts lifting tires in their garages into a brand Forbes estimated is now worth $4 billion. And the juggernaut shows no signs of slowing down anytime soon.”