Operations

Contracts? Or Nahhhhh?

Should you use contracts? Or Nah? We break it down!

Dan Uyemura
June 15, 2015
TLDR;

Should you use contracts? Or Nah? We break it down!

I’m going to keep this short, cause I have a lot of work to do today, but I wanted to touch on a topic that frequently comes up in the small gym and/or CrossFit space:To Contract or Not?I am on the side of the fence of YES.  When reading the forums gym owners frequent, however - I never see anyone bring up the one true (and only) value of contracts.  (At least, in my opinion).First let’s talk about the two biggest critiques of contracts:

  1. Contracts Don’t Create Cash Flow.  Good Product/Service Creates Cash Flow.  I actually agree with this 100%.  It’s always good to start off by agreeing, so let’s just agree to agree on this point.  If you’re relying on contracts for cash flow stability - time to rethink things.
  2. Are You Even Gonna Enforce Them Bruh?  In small gym settings, we all end up being friends.  Enforcing contracts means NOT being a friend.  There’s a solution to this.  Read on.

Now. Let’s dig into why I like contracts.

SETTING EXPECTATIONS.

We all see marketing messages claiming “30 day fitness transformations” or “5 day cleanses”.  We all know this is flat out bullshit.Even the consumer knows this is bullshit… but the part of their brain that’s desperate for change clings on to the hope it’s true.The problem with marketing to this part of the brain, is you generally have their attention for about 50% of the time you advertise.If I tell someone to give me one month, they expect to see dramatic changes in 2 weeks,  If they hit the two week point without seeing remarkable changes, they’re one foot out the door mentally.I use contracts to have this discussion with clients on day one.“We need 6 months of your time, energy and devotion”I say this knowing I can generally get someone the changes they’re looking for (or at least enough of a start in that direction) in 3 months (the mental attention span they’ll subconsciously apply on a 6 month term).If a client cannot make that commitment, they generally will not have the desire or wherewithal to make the sacrifices needed to effect change.We are looking for lifelong clients. Ones that see the value and the benefit of the service and product we’re selling.  The first step to creating a happy customer is setting boundaries and expectations of what they will be receiving (and in what timelines).

Contracts might not be needed with ACH!

What About Contract Enforcement?

This is where PushPress comes in.  If you feel that your client is quitting and not holding up their end of the bargain - simply let them know that your system automatically charges the cancellation fee they agreed to when they signed the contract.Upon cancellation, without any thinking - we will automatically charge the cancellation fee they agreed to when signing the contract.  If they are breaking contract for an acceptable reason, you can override this and discount or waiver the fee.We understand your clients can become friends too, but you have a business to run.  Blame us.This would also be a nice time to show them the PDF version of the contract they signed with their signature - it’s stored on Amazon cloud services for eternity.Contract services are just another part of our well-designed, thoroughly thought out gym management, billing, and analytics platform.** Contract services are out in private alpha testing now.  Look for them to drop live any day now **

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Dan Uyemura

Dan Uyemura built his first gym in 2008. Since then he's built and sold a couple of gyms. In 2011 Dan decided to help gym owners run more stable, profitable businesses.

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