All-Star Is There A Rule That A Big Gym Can't Open A Location Within 50 Miles Of Another Big Gym

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alpaca

Cheer Parent
Apr 21, 2017
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I have been told that this is why some of the big gyms have been acquiring smaller gyms. Done so in order to keep their competitors out of the market. It doesn't make sense to me as it creates a monopoly. And cheapens the brand if the acquired gym does not perform at the same level as the flagship.

Anyone have insight into this?
 
I have been told that this is why some of the big gyms have been acquiring smaller gyms. Done so in order to keep their competitors out of the market. It doesn't make sense to me as it creates a monopoly. And cheapens the brand if the acquired gym does not perform at the same level as the flagship.

Anyone have insight into this?
Cheer Extreme and Cheer Athletics both have a location down in Charlotte.
 
Cheer Extreme and Cheer Athletics both have a location down in Charlotte.

OK, then that answers that. What I was told never made much sense to me. There were some hasty aquisitions made last year. Actually I'm not entirely sure if it was acquisition or some sort of franchise agreement. The particular location I know about has refused to provide any transparency about the change.

When talking with friends what are at this gym I asked why didn't management on either side take time and do their due diligence, I was told it was because of this agreement made by some alliance.
 
For a long time Woodlands Elite and Produgy All Stars both had Cheer gyms in the same city of Katy. Now different cities, but still close.
 
OK, then that answers that. What I was told never made much sense to me. There were some hasty aquisitions made last year. Actually I'm not entirely sure if it was acquisition or some sort of franchise agreement. The particular location I know about has refused to provide any transparency about the change.

When talking with friends what are at this gym I asked why didn't management on either side take time and do their due diligence, I was told it was because of this agreement made by some alliance.

There is an alliance that has an agreement to not "infringe" on other alliance-programs' locations. But I'm not sure of what programs are involved in the alliance and which are not. If they are not, anywhere is fair game.
 
There is an alliance that has an agreement to not "infringe" on other alliance-programs' locations. But I'm not sure of what programs are involved in the alliance and which are not. If they are not, anywhere is fair game.
Interesting. Do you know anything else about this alliance?
 
Interesting. Do you know anything else about this alliance?

Honestly, that’s about the extent of what I know. I know where I live/the market I’m in is a part of an alliance member territory, but I don’t even know which one (however I have an educated guess).


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I have been told that this is why some of the big gyms have been acquiring smaller gyms. Done so in order to keep their competitors out of the market. It doesn't make sense to me as it creates a monopoly. And cheapens the brand if the acquired gym does not perform at the same level as the flagship. Anyone have insight into this?

The majority of small business acquisitions happen because the business owner has to choose between bankruptcy or reaching out to other businesses to be acquired and get some financial return on their investment. As far as quality, it just takes time to change staff and clientele mentality, and sometimes the staff and clients just don't want to adapt to a more competitive and/or structured environment.

@CLynn @tuckxandxtwist Interesting. An equity strategic alliance could be put into place to actually try to keep the mega gyms out. An example would be if Fabulous AS was hurting financially, and the alliance gyms came in and purchased a portion of Fabulous AS's to keep them in business and prevent them from knocking on Mega AS's door to be acquired. <<<<That would be really interesting if that's what they have done. If it's only about infringing on other businesses, however, it's probably a non-equity strategic alliance and more about business conduct....much more boring in comparison.
 
I have heard there are certain gyms who have mutual agreements (or maybe even contracts) with each other about infringing on certain areas. It makes sense. This is course is second hand information I heard but I take the source fairly reliable.

I also heard that some D1 Gyms were buying, at least partly, into smaller gyms but not converting them so that they have a hand in the D1 and D2 Market! This of course being done silently.
 
Interesting. An equity strategic alliance could be put into place to actually try to keep the mega gyms out. An example would be if Fabulous AS was hurting financially, and the alliance gyms came in and purchased a portion of Fabulous AS's to keep them in business and prevent them from knocking on Mega AS's door to be acquired. <<<<That would be really interesting if that's what they have done. If it's only about infringing on other businesses, however, it's probably a non-equity strategic alliance and more about business conduct....much more boring in comparison.
It would surprise me if the alliance gyms had enough capital for many purchases or investments to keep others a float. The first few maybe but beyond that I wonder how long they could use that model.
I also heard that some D1 Gyms were buying, at least partly, into smaller gyms but not converting them so that they have a hand in the D1 and D2 Market! This of course being done silently.
Now that is interesting. Is there anything that specifically prohibits a minority share? It would feel odd to me if say, the NY Yankees purchased a portion of the Pittsburgh Pirates and maybe that isn't a fair comparison. I love the cheer part of this industry, all the rest is really a mess.
 
I also heard that some D1 Gyms were buying, at least partly, into smaller gyms but not converting them so that they have a hand in the D1 and D2 Market! This of course being done silently.

@CLynn ^^^This is what I was talking about with an equity strategic alliance. You don't have to have a lot of capital if they purchase equity in each other or if they have enough members to do a partial buyout.

If your business is struggling for whatever reason, you are going to try to find someone to buy it out, or partially buy into, before going into financial distress. The successful gyms can't save everyone, but they can buy partially into these struggling gyms and share resources to help each other out. When the Affordable Care Act came out, the government mandated businesses with over 50 full time employees either provide health benefits or pay a fine. Many smaller and mid size businesses can't afford to acquire other businesses for this reason and an equity strategic alliance could be the answer to that dilemma. The cheer industry is very interdependent, if you're a competitive gym and you start losing your local competitors, that's a problem.
 
There is an alliance that has an agreement to not "infringe" on other alliance-programs' locations. But I'm not sure of what programs are involved in the alliance and which are not. If they are not, anywhere is fair game.

If this is the case this is collusion and likely highly illegal.

Here is what I know to be the case in the Chicago area:
Cheer Extreme, GymTyme and ICE all have locations within 50 miles of each other(more like 10-15 miles). I believe these are all Alliance programs.

The irony is no major program has a facility in the actual city of Chicago which is home to 3 million people.
 
OK, so 3 of us have heard of this and we are in different markets. What I would like to hear is a gym owner/manager/coach join the thread and confirm or deny. Someone that is in a position to know.

The concept makes me sad bc here we are talking about wanting transparency in the industry and then we hear of secret deals being made by our very own gyms.
 
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