Are you still offering "lifetime" rates from when you first opened your gym? Dan and Nick are here to tell you why that might be hurting your business more than you think.

In this episode, they break down the hidden dangers of grandfathered rates — from undervaluing your services to creating unfair community dynamics — and explain why it’s never too late to make a change. They also share actionable strategies to shift away from outdated pricing models, create sustainable growth, and ensure your gym is set up for long-term success.

If you're struggling with grandfathered rates or need help transitioning to a sustainable pricing model, email us at podcast@pushpress.com.

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[00:47] What are grandfathered rates?

[02:23] You’re undervaluing your growth and services

[04:06] Use a pricing structure that pushes you to get better

[4:56] Creating unfair dynamics within your community

[06:40] You’re hurting your bottom line

[09:44] You’re signaling weakness

[11:32] Inflation makes grandfather rates unsustainable

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Dan Uyemura: [00:00:00] Nobody builds a business, especially on day one. Like your gym is not going to be what it looks like five years later. You're going to add services. You're going to add amenities. You're going to, your coaching's gonna get better. Things are gonna get better and you should not prepackage. Um, your rates as if you're never going to get better.

Dan Uyemura: Welcome to the PushPress Podcast. Where gym owners learn to dodge bad advice, crush the competition, and actually make money doing what they love. Let's get after it. Today's episode coming to you from Orlando, Florida, sponsored by Foxtail Coffee. Hey, cheers. When you've only had four hours of sleep and you sat next to a very large person on the airplane.

Dan Uyemura: Foxtail coffee. We get you going. Oh man. Anyway. So in today's talk in the first episode today from Orlando, um, we're going to talk about something that's near and dear to us and it's the concept of grandfathering rates. 

Nick Reyes: Yeah. I mean, we see this a fair amount in the fitness industry, right? Uh, you start a business, you got a basic offering.

Nick Reyes: And you got [00:01:00] to come up with a price, maybe a little bit of a doubt, which we can go into later on. And so you say the dreaded words, I'll give you this for life. Sign up today 

Dan Uyemura: for life is quite a long time. Ooh. And, um, not only do we see it a lot in the data in PushPress, these grandfathered plans that go on into perpetuity.

Dan Uyemura: Um. But we see it in chatter, like, Oh, I've got this grandfather rate and I'm scared to talk to them. Right. Right. Uh, did you ever do this? We did at my first gym. Did you? Um, and you know, just like every, uh, mentor out there, like learn from the dumb shit we did. Don't do what we did. Trust me. Don't do it. Uh, yeah, our first gym, the brilliant idea, which, hey, isn't so novel because I'll bet you every gym owner has thought of this is like.

Dan Uyemura: Uh, what's our breakeven point? It's, uh, 7, 900. Okay, sell the first hundred memberships at 79 for life. 

Nick Reyes: Like sprint to [00:02:00] breakeven. Yep. And then, 

Dan Uyemura: and then we're good. And then five years later, we had 80, 79 a month members. And our rent had gone up to like 1, 100. So. Which, which 

Nick Reyes: we'll get into in, uh, in one of our highlights here in a bit.

Nick Reyes: All right. You want to jump into this one? 

Dan Uyemura: Yeah. Let's just dive right into the topic. So, um, why grandfathering rates is a dumb ass move. Topic one. It just really undervalues you and your growth and what you're doing in your gym. In my opinion, nobody builds a business, especially on day one, like your gym is not going to be what it looks like five years later.

Dan Uyemura: You're going to add services. You're going to add amenities. You're going to, your coaching is going to get better. Things are going to get better. And you should not prepackage, um, your rates as if you're never going to get better. 

Nick Reyes: Yeah. I mean, I think you and I talk a lot about like making sure we have optionality in growth over the longterm.

Nick Reyes: No one can see the future. And so if you don't think about like pricing in the lens [00:03:00] of how am I giving myself the greatest optionality for where I need to move and shake and go over time, take COVID for an example, no one knew that crap was coming. And so imagine if you had, you know, done steady price increases every single year and you were operating with larger margins that entire time leading up to it, you had a better cushion to weather that storm than if you were, Hey, you've been locked in for that 79 and you're running on a razor thin margins going up into it.

Nick Reyes: Oh shit, now you lose one person and you're in the red, right? So like, it removes all optionality, all flexibility, which to me is like undoes, undoes the entire thing. 

Dan Uyemura: Yeah. Yeah. And you know, to, to this point, it actually creates no incentive for you to get better. Like if you cannot raise your rates on a, on a big chunk of people, why would you put better equipment in the gym?

Dan Uyemura: Why would you have your coaches go get better training certifications? Why would you put a sauna or a cold plunge? You 

Nick Reyes: know, that's interesting. [00:04:00] Now that you say that it's like. If you, if I know there are gyms that have like every year we do a 3 percent increase or whatever it is, right? Like that's, that's a thing.

Nick Reyes: And so it just kind of dawned on me, like if you just bake that in, 

Dan Uyemura: Oh, it's just so much easier. 

Nick Reyes: Well, not only is it easier, but as a gym owner, you're like, okay, it's. January is coming up. I'm going to be asking for 5 percent more. How am I, what did I do this year to get the value that I'm going to be asking?

Dan Uyemura: Man, you just got me hyped up. Topic change, topic change, why you should bake a three to 5 percent price increase right into your product. I agree because if you don't have a push thing, that's pushing you to get better. Right? Like, and if you know the price increase is coming, you are going to be driven to always get better.

Dan Uyemura: And in my opinion, like that's the only thing that wins in the market is having a better product or service. 

Nick Reyes: Yep. 

Dan Uyemura: So why not just build that pressure right into your pricing? That's the way to go. 

Nick Reyes: Yeah. I changed my topic. You changed your topic. All right. Uh, moving on, uh, topic number two, creates an unfair community dynamic, right?

Nick Reyes: [00:05:00] So, uh, you have two members, they're side by side, right? John joined, uh, when the gym opened, he got your 79. 00 rate, and, uh, and Sam joined. You know, two years later and he's paying 129 and it's like, what the hell? Like they're going to talk about it, you know, over dinner at the bar or whatever it is, the community event.

Nick Reyes: And it's, there's going to build that resentment and everything else. Right? 

Dan Uyemura: Yeah. Here, here's a funny point. I, this is actually. Is from my history, like they're guaranteedly going to talk about it. And you know why? Because you're giving your OG members a brand, like you're an OG member. You get this price forever.

Dan Uyemura: You're you're a tier above everyone else. And people carry that badge around with them in the gym. Like, Oh no, I'm an OG member. Like I don't pay that. I don't pay current rates. Like they, they will, they will brag to people about the fact that they pay less. So it's going to be advertised. 

Nick Reyes: Yep. Yeah, I mean, I think, uh, if you, if you, if you [00:06:00] carry that on for too long.

Nick Reyes: So imagine that that's, I'm going to keep going back to your 79 example. Uh, you fast forward even a few years later and maybe now your rates are 159. Now you've, you get to the point where it's like, damn. I gotta ask John for a massive, for an $80 increase, and John doesn't see the value. John knows I'm OG member, I'm worth the $80 a month discount.

Nick Reyes: Right. Like, so it gets to a point where they, you're gonna lose John when you do the increase and, you know what I mean? 

Dan Uyemura: Yeah. Ultimately, you're creating a, a ledge that becomes harder to undo every year that, that, that goes on. Yep. Right? Yep. Exactly. Yeah. Uh, number three, and again. These are all related and I can tie all these back to my first gym.

Dan Uyemura: It hurts your bottom line. So when we raced to the 7, 900 breakeven mark to pay our rent, which was, you know, the month we did it, we, we, we sold that out before we even opened our doors, high five, we will never lose money. But you, when you [00:07:00] fast forward five years, you also never will make money. And you, I know a lot of you gym owners out there feel like you're running a charity on the, you know, when you, when you create pricing strategies like this, you are setting yourself up to run a charity.

Dan Uyemura: So if you have a grandfather, great that you've promised people you will never increase and, or you feel the pressure that like, Oh, I've waited too long. And now this increase is going to be tough to do. You're not going to make enough money. And let me explain what happens when you don't make enough money.

Dan Uyemura: You start. Working extra hours, you have to take a second job. You can't pay your coaches enough. So the quality of coaching goes down the class, uh, classes, experiences less because coaches are unmotivated. It becomes a headwind that creates a downward spiral when you don't have enough money to go around.

Nick Reyes: A 

Dan Uyemura: hundred 

Nick Reyes: percent. I mean, I think ultimately this is true for any business, whether it's a. fitness business or even like PushPress, for example, at the end of the day, if you're not charging, uh, an appropriate value for the services and for the product that you provide, it's going [00:08:00] to, uh, Not allow you to invest back into other areas where you could produce more value for the customer, which is what you're saying, right?

Nick Reyes: So like for the gym, that's like, Oh, cool. Old kettlebells are still sitting here that are all scuffed up. And when you swing them, it like tears into your hands, right? 

Dan Uyemura: It creates a scarcity mindset 

Nick Reyes: of everybody in the business. So if we had done this. We wouldn't have half of the quality talent that we have, 

Dan Uyemura: right?

Dan Uyemura: I think that's the thing a lot of people don't, don't think about, especially when they're picking vendors, right? Like vendors, vendors like us, um, as you grow, the weight of your business becomes something, every line of code, every class you create, every childcare program you launch, everything you do in your business becomes a weight that you have to support.

Dan Uyemura: So if you don't build a mechanism into your business, IE you have these grandfather rates. You're creating a future debt problem that is insolvable, you know, like today at PushPress, we probably have like 10 million lines of code to support. [00:09:00] We have like four or five product lines and we have hundreds of features, right?

Dan Uyemura: And you know, if, if we had grandfather rates and if we had dug ourselves into that corner, like this is, this is something that people don't know. Like we spend 9 million a year on product and engineering people. 9 million, right? Yeah. It's a lot of money. Right. And I think it's fair for people to understand that because it costs money to support the systems that are helping people run their gyms.

Dan Uyemura: Same with you guys, gym owners, right? It costs money to have great coaches on the floor to be able to roll out childcare or new programs or build a sauna or whatever. And if you grandfather your rates, you're never going to be able to do that. And the gym down the street will. 

Nick Reyes: Yep. Absolutely. Can't see it.

Nick Reyes: Couldn't say it any better. Alright, number four. Uh, and, and again, I know all these things kind of play together, right? But like, it, it really does signal an inferior product. Let's take this, I'm gonna, I'm gonna play off what you just said there, right? Where we've got the 79 rate gem. And I, maybe I'm the gym owner [00:10:00] now, all of a sudden, because I'm getting less money from Dan, who's paying 79 a month, I can't afford to send my coach to the next, the, the professional communication seminar that I, that I think would level them up and help them deliver a better service.

Nick Reyes: Right. I can't send the other coach to a sales course. And all of a sudden my product gets inferior and people see right through this. You're either, whenever you look at pricing, it's either like. Whoa, that's expensive. There's some value there or whoa, that's cheap. Something's off. So it ultimately rings through consumers see right through it.

Dan Uyemura: Exactly. The bottom line is, uh, there's two types of businesses out there. Ones that compete on value or ones that compete on price. And the more you've leaned into, um, a pricing structure that everyone around knows can't last forever. The more you're signaling to the market that you're competing on price, which means ultimately, you know, they're choosing Starbucks over Foxtail [00:11:00] coffee.

Dan Uyemura: Coffee break. Quick sec, Foxhill not competing on price. I guess Starbucks not competing on price either. Starbucks is not competing on price or service or quality. I don't know. They're competing on convenience, I guess. They're competing on 

Nick Reyes: past brand. 

Dan Uyemura: Yeah, they're competing on the 82 I have stuck in a bank account with them.

Dan Uyemura: Anyway, the point is, um, you're really basically signaling to the market just how inferior everything is that you're doing. Yep, absolutely. Not just present, but especially future. And 

Nick Reyes: You're 

Dan Uyemura: lying to yourself. You're lying to yourself. That I think is the most important topic. 

Nick Reyes: Yeah. Costs are going to rise.

Nick Reyes: Your prices should rise too. 

Dan Uyemura: Inflation's a thing. 

Nick Reyes: I mean, 

Dan Uyemura: tell me when we're in a deflationary economy, go ahead and grandfather, that's fine. That's, that's lock it in and just be cool. 

Nick Reyes: Exactly. Exactly. But even, you know, in the service industry where, you know, you, you only have, you have your fixed costs, like your, like your rent, and that's only fixed for a certain period of [00:12:00] time, right?

Nick Reyes: And sometimes it might be like, hey, you're locked in at this rate for three years or whatever. And like, okay. Cool, but it's going to go up and it's probably going to go up by a decent amount when you sign your next lease So that's going to go up. But again, it may not be every year your cost of living wage for your staff All of that is going up at this point five percent a year, right?

Nick Reyes: So if Your two main overheads are going to go up. How the hell are your prices not going to go up? Something's going to give, and that goes back to what you said earlier, where it ends up being your time as the business owner ends up being your time, your effort, your money. It comes out of someone's pocket.

Nick Reyes: And you're choosing for it to be yours. Yep, buck stops with you. 

Dan Uyemura: Yeah, exactly. I mean, unless you have the magic, uh, facility where the square, magic square footage appears for free and you can launch more classes, I don't know, somehow with AI coaches or something like there is no technologizing yourself out of this cost problem.

Dan Uyemura: So you're just lying to yourself and you're lying to your members. Like there is no way you can grandfather them [00:13:00] forever. In fact, I speak every week. I talked to a gym owner who hits me up, like I need to raise prices and I'm scared as shit. And it's like, they know they have to do it eventually, but they've lied to the, they, you know, it's like I haven't confronting this lie that I've given people.

Dan Uyemura: It is not sustainable and it is not possible to keep a grandfather product forever. And my number one rule in business is don't think your customers are stupid. And by telling them that they're grandfathered forever, you're basically assuming that they're stupid. 

Nick Reyes: Yeah. I mean, if you buy into bad pricing, you're buying into a failure.

Dan Uyemura: And, and, and the thing, like, I want to make sure like this is understood all the way around. It's funny because. Um, you know, like a lot of gym owners right now know don't grandfather, but you see this, you see this advice around the internet a lot, like, Hey, don't grandfather your rates because you're going to face this problem.

Dan Uyemura: And then they turn around and buy from vendors who are grandfathering their rates. It's like, I see this double edged sword a lot. 

Nick Reyes: I think that's because it's perceived as if some companies won't [00:14:00] have the same problem. Right. But not true at all. Every company, uh, it doesn't matter if it's a tech company like PushPress or, I mean, your cable companies are their behemoths.

Nick Reyes: They do price increases. Why do they do price increases? Because the cost of acting went up and then it trickled all the way down to, cool, CBS cost us a little more, or whatever it was, right? 

Dan Uyemura: Yeah, but the bottom line is if nothing in your supply chain requires a human being, then the prices could go down over time.

Dan Uyemura: Potentially, but that is not the case in a gym. Yeah, it's not even the case in You know, cable TV, because the actors want more money and the producers and the sound people, they all need more money. Yep. 

Nick Reyes: So Humans, inflation, it's going to hit every company. It's just a matter of time before the, uh, the team hits a breaking point.

Dan Uyemura: And I think there's a lot of people that think, oh, AI is going to come and solve the day, but that's just not true right now. No. Because humans still have to be the monkeys running the AI at this point. Like we, there [00:15:00] still are humans involved in, you know, AI creates more scale, but it does not It just means we're going to do 10 times more things with the same amount of humans or more humans, to be 

Nick Reyes: honest.

Nick Reyes: It's going to increase production. It's not going to necessarily decrease cost. Yeah. Right. Yeah. So, I think that puts a pretty good bow on it. You 

Dan Uyemura: got anything else, man? So, hey, if you're out there and you feel like you don't know what to do, and you've got grandfathered rates, And you need some help on how to unwind that.

Dan Uyemura: Send us an email podcast@pushpress.com. Uh, somebody on our podcast team, we'll get back to you and we'll, we got a strategy for getting it undone. So, or if you have experienced grandfathering rates that are a nightmare or, Hey man, maybe you bucked the trend and it's great. Podcast@pushpress.com. Let us know.

Dan Uyemura: We love to hear from you guys. See ya. Thanks guys. Thanks for listening to another episode of the Push Press Podcast, where we help gym owners, entrepreneurs, and fitness enthusiasts thrive with actionable insights, inspiring stories and strategies for growth. 

Nick Reyes: Don't forget to follow the show to stay updated on new episodes.

Nick Reyes: And if you're ready for more, [00:16:00] join our free Facebook community for gym owners, check the show notes for the link, and we'll see you next time. Keep raising the bar for your business and community.

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