- Nov 18, 2010
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I’m loving everyone’s replies on this topic! It’s really eye opening for me to hear the parents on this thread chime in on the criteria they use to pick a gym. I’m left a little conflicted though… I don’t mean to drag this out so thanks for being so helpful but it’s nice to learn about the ins and outs of acquisitions.
I still have some questions.
According to most of the parents they use the following criteria to pick a program in their area:
1. Location/Convenience
2. Price
3. Staff
Well just playing devils advocate here but wouldn’t most of these things be largely unaffected by an acquisition? I mean, wouldn’t tumbleweed town allstars typically retain their old facility, pricing structure and most of their old staff? (For the most part. I mean no drastic changes are usually happening to these things)
And if that’s the case then what’s the argument for slapping a brand new World Cup logo on their front door? After all, a lot of the tutu tumbling, birthday parties and mommy & me classes are going to attract customers if they had just kept on being tumbleweed town allstars, right? Those people don’t care what name is on the front. So let’s say Tumbleweed town allstars is thriving financially then the ONLY reason they have for taking on a franchise deal would be to attract the talent pools from other local programs and make even more money. Let’s say they’re NOT thriving financially then the ONLY reason that I can imagine they’d take on a franchise deal is to once again attract talent from these other local programs and keep their doors open, right? What other reason would they have to take on a new name if not to attract more athletes from local programs? Especially if their operations are remaining mostly the same beyond just the name.
We have established that parents don’t really care about the name on the front of the door because they use a different criteria to select a program for their cp and we’ve established that most parents who are new to cheer aren’t really familiar with the different programs so what’s the incentive there for Tumbleweed Town allstars to take on a new identity?
Let’s be real, if these kids and parents at these other local programs switch over to the newly rebranded World Cup tumbleweed town location then it would only be because their old gym wasn’t as successful at competitions, right? I mean Tumbleweed Town allstars has always been there so what was stopping them from going there before the acquisition? Because like I said earlier there wouldn’t be a ton of wholesale change happening at World Cup Tumbleweed town besides the name. So the expectation here from these new customers is that World Cup is taking over Tumbleweed and is funneling in what makes their main location so great in order to deliver that to the Tumbleweed town market and attract these athletes from these other gyms. It’s the only thing that makes sense to me. If parents don’t really care about the name on the front of the door or the number of titles being won then why are these mega gyms entering these new markets and these old gyms allowing themselves to be acquired? Location, price, and staff aren’t going to change drastically so what’s the incentive here?
My theory is that these mega gyms know that with a new fancy name on the front of these old facilities there will be a small exodus from those other local programs which will make this old program money and the only reason those people would leave their old program is because they’re expecting a certain product that couldn’t be delivered at their current program which is competitive success. Am I making sense or is that crazy to think?
Now okay let’s just imagine that I’m right and the main incentive for franchises to expand is to attract local talent by convincing them that World Cup is coming to their town and they should be super excited to win championships and leave their current program then the question still remains: Okay you have a few new athletes who said they’d never cheer at Tumbleweed town allstars, even though they’re closer to home, because their teams never do well at competitions but decide they’ll make an exception for World Cup Tumbleweed Town. These athletes and parents also care enough about cheer to know the World Cup name and decide to leave their old gym and try it out… GREAT successful acquisition. More money less problems! But wait a second… The athletes slowly but surely realize that this is just Tumbleweed Town allstars with a new name which is what we’ve seen with most of these satellite programs at competitions besides the few stingray and rockstar locations mentioned above regarding summit placements. I’ve also experienced it firsthand with the Top Gun Orlando acquisition. It was still Orlando Allstars. When I was there they were using most of the same coaches, same techniques, same conditioning, (Orlando allstars used to use top gun choreographers for their worlds teams before the acquisition anyway) same choreographers too. But different location, and different uniforms.
So it brings me back to square one. Okay if you’re not ensuring that these other programs are as closely matched to your main location then why do you continue to expand? Like won’t people start to see through the facade and sooner or later these acquisitions won’t mean anything to these local parents and athletes and Tumbleweed Town allstars will be right back where they started financially?
But then someone said money is the main motivator which makes a ton more sense to me but I still have to wonder if that’s a good long term plan because, like I said above, in terms of brand integrity won’t these local parents and athletes who care about rankings like we do start to see through these acquisitions sooner or later? Which means they’ll go back to the gym that’s better priced and more convenient and these mega gyms won’t have much financial incentive to keep expanding?
So from a business perspective, beyond all the cheer nonsense, this still doesn’t make a ton of sense to me. Like okay, these mega gyms acquire these small gyms when they’re in a bad place financially and get these small gyms to feed them more money and the small gym gets to attract more athletes with the new name. A fix and flip if you will… but the foundation of the house is still the same because the small gym trains their athletes the exact same way they did before and it all comes tumbling down eventually at competition and now the small gym is still in a bad place financially because mom decides to take her cp back to the more convenient gym in the area.
I still think it makes more sense to focus on expanding your vision in its entirety to ONE satellite location before moving on and continuing to expand like some of these Mega gyms do. But I could be wrong.
Genuinely curious here and ready to learn. Thanks again. I know my posts are super long winded. My brain is so scrambled at this point working through this in my head. I also know it doesn’t matter because these mega gyms will continue to expand regardless but at least I don’t need to be baffled every time it happens or perhaps I do. Idk.
I franchised with a big name program for last season. I live in an area where there are a ton of micro gyms that are mostly founded by parents who don't like where their kid is placed at program X (literally, multiple got their start that way....) or rec coaches who want to get more into competitive programs. Most programs in my area (direct area, within about a 30 minute drive) don't exceed level 3. Occasionally you might get a micro level 4 team (I think the last one prior to this year was a team of 7). Coaches don't get opportunity to develop, and when those kids are ready for progression past level 3, they start driving at least an hour each way to get to a gym 50+ miles from home.
I have been involved in programs in this area, since it's where I grew up, but I also went away to school to a big city with a TON of programs, and bounced around other parts of the state as an adult in my working career. I've seen a lot of what works and doesn't work at programs. When I got back to this area, I wanted a program where coaches development and athlete development were important, and we could retain the athletes we grew, trained and developed higher than a level 3 team. I knew I wasn't going to be able to be successful as "tuckxandxtwist allstars", even though I know what my business plan, credentials, ability and ideas are, strictly because of the sheer number of micro programs. I knew I needed the big name behind me, and something to really set me apart from the other programs in the area. I'm the only D1 program in my area. The next closest is in a different state, and a solid hour drive minimum without ANY traffic, and that is unlikely in that area. After that, you're looking at a drive upwards of two hours for the next D1 program. There are some other programs near by with some level 4/5/6 teams, but again, it's at least a 45-60 minute drive for almost all of my athletes.
I found a program that aligned with what I wanted in what I offer, had a solid name to back me up, and would be there for me to utilize and grow with. We opened during covid, had a pretty amazingly successful first season, and have tryouts for season 2 starting tomorrow. We are retaining over 90% of our full year athletes (almost 100% if you didn't include our seniors leaving), growing almost 50% more in our full year program alone, and have seen our kids grow tremendously over the last ten months of being open. It was absolutely the best decision for our program and our location/demographic. That's only my outlook on it though, but figured it was worth sharing the why behind at least one decision (of the hundreds) in franchising lol.