Since 2008, we have been in the business of helping independent gyms build a profitable business with the greatest long-term return on investment: A professional gym.

To become a professional gym, you need professional career coaches. This means coaches:

- who can help bridge the gap between healthcare and fitness
- who can help their clients put their diabetes into remission, combat their chronic pain and become fit for life
- who earn a professional wage year-after-year

This isn’t just rhetoric.

Our process is broken into Three Seals. Reaching the third seal ultimately means you have earned professional gym status.

First Seal:

Reaching the First Seal usually takes 6-12 months. It focuses on making the changes required to adhere to Madlab Group Laws 1, 2, 3 and 4, which are:

Law #1: Client’s first-day experience

A client’s first-day experience at your gym should be done:

- In a one-on-one setting with a coach
- By appointment only

This dramatically increases client retention and ACV (average client value), two of the 6 KPIs.

Law #2: Client fundamentals

The longer you keep a client in fundamentals, the lower the student to coach ratio (one-on-one is optimal), and the more you charge them:

- The more successful the client is (measured by ACV and retention).
- The more successful the coach is (measured by dollars per coach hour, total coach pay, coach retention, and job satisfaction)
- The more successful the business is (measured by lower churn rate for clients and coaches, a higher ACV, meaning an increased profit, and less burnout)

Law #3: Coach for life

The coach who puts a client through their first day should be the same coach who trains them during fundamentals training and the same coach who continues to coach them when they begin their hybrid gym membership.

(This doesn’t mean clients can’t go to other coach’s group classes, as well. It simply means each client has a coach in their corner for life—a relationship with a professional coach—who knows their unique wants and needs, strengths and limitations, which allows the coach to effectively help their clients with their current and future health and fitness challenges, creating a more individualized/personalized approach).

Law #4: Hybrid gym membership

After a client finishes fundamentals, they should do a combination of group classes and one-on-one training with their personal coach—aka hybrid gym membership. Optimally, clients meet their coach once every 4 to 6 weeks to help prepare them for the next programming cycle, and address any training or lifestyle issues or concerns, such as injuries, nutrition, stress or sleep, the client might be experiencing.

In light of the above, during the First Seal process, gym owners are mentored about:

- Pricing best practices
- Sales
- Marketing & communications
- Coach development / recruiting
- The importance of one-on-one coaching
- Client education (intake) process
- Transitioning current clients to hybrid memberships (increasing ACV)

They also complete courses about:

- Business development (1st seal materials)
- Rainmaker 201 (sales course)

Second Seal:

Going from Seal 1 to Seal 2 generally takes another two to three years. It focuses on making the necessary business changes in order to adhere to Madlab Laws 5, 6, and 7, which are:

Law #5: Coach Compensation

Coaches should be compensated financially on a percentage of revenue basis, per client, for the lifetime of that client.

When this happens, coaches are finally able to become full-time, career coaches, who earn a professional wage ($80,000 +) working 20-25 on-floor hours per week (aka coach pay and dollars per coach hour increase when this law is followed).

Law #6: Coach Development

Coaches must go through an accredited coach development mentorship process, where they earn their way like an entrepreneur, starting out at 0% of the revenue they generate (as they’re shadowing a senior coach) and moving up through the ranks to eventually earn 50 to 60 percent of the revenue they generate.

This process involves technical training, sales training, and business training and generally takes two to three years to become a truly professional coach.

Law #7: Coach Co-op

In order for coaches to work a manageable 20-25 on-floor hours, have freedom over their schedule, and take at least four weeks of paid vacation per year, they need to be organized into a co-op, where they share the responsibilities for pretty much all aspects of running the business, including coaching classes, scheduling, programming, billing, social media etc. In this sense, coaches work together as entrepreneurs but in a co-op form, similar to a law or engineering firm.

A coach co-op increases coach investment in the business, as well as coach retention, and frees the business owner up to work on business development and higher-level business demands.

During the Second Seal process, gym owners are mentored about:

- Coach pay (performance-based pay)
- Coach development
- Coach recruitment
- Developing specialty programs (and how to compensate for these)
- Remote/online coaching
- Marketing 201
- Team building
- Coach co-op

They also complete courses about:

- Business development (2nd seal)
- Professional coach development program (PCDP)
- Implementation of the PCDP
- Marketing
- Rainmaker 301 (leadership & team building course)
- During the Second seal phase, owners continue to have one to two mentorship calls per month, or as needed, with full access to the Madlab team and resources.

Third Seal:

Going from the Second Seal to earning your Third Seal takes approximately three years. During this time, the focus is primarily on Madlab’s 8th and 9th Law, which is all about building a sellable asset.

Law #8 and #9: Turnkey Business and Sellable Asset

When you follow the first 7 laws, you will build a healthy business with professional coaches pursuing careers at your gym, high client retention and ACV, and earn a minimum of 20 percent business profit each year (EBITA or earnings before interest, taxes, and amortization).

As a result, your gym won’t rely on the business owner to be successful, meaning you will have an asset you can sell for 5 x profit + assets and retire on this when the time is right.

During the Third Seal process, gym owners are mentored about:

- Building a sustainable business via the coach co-op
- Achieving 20 percent profit (EBTIA)
- Building their coaching team to get to the point that they have a sellable asset

What this looks like in practice:

After 15 years, Madlab School of Fitness in Vancouver, B.C.—a Third Seal gym—has six full-time coaches, who have been there between seven and 14 years and earn between $60,000 and $110,00. The gym earns a minimum of 20 percent business profit each year, and yearly client retention sits between 85 and 87 percent.

For more about our Three Seal program, book a call now.

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