WAG Part of gyms profit to owner/manger?

[BarCoach]

Had a great meeting this morning with the general manager of a sports complex to discuss adding gymnastics to his facility. He is open to the idea and has either 8600 or 15,000 sq. ft. that could become available to make it work. Now I need to write a proposal so he can see exactly how much money he'd be putting in and how much profit he'd be making down the road. Wondering if anyone else is in a situation where you have to pay the owner of your building a percentage of what you're making? What is that percentage? How is that calculated? Do I take a salary and my employees wages and he gets the rest? Then he'd keep making more as the business grew, obviously. Just trying to work it all out. Who knows if it'll happen but I'm excited that I at least have an opportunity to present my case.

 

[my4buffaloes]

Why not just pay him rent?

 

[gymdog]

This is very confusing. Would you be the owner of this business or not? There are two ways for this to go, either you are renting or buying space in his facility, or he is hiring you to start a gymnastics program within his business (you are then his employee, at a managerial level, but his employee nonetheless).

When a gymnastics program goes into a sports "complex" I have seen this go both ways. It's really up to him though and how he sees his business. With regards to how it works based on profit, if you're his renter, then you pay him rent. Now, if the business grows and is becoming more profitable he would likely raise the rent at the end of the lease and if he's giving you some kind of deal to get started then there might a contract specifying some kind of initial profit sharing. But that is less common in my experience and seems like he is essentially taking ownership or a share at that point. So then I guess to me the third viable option would be joint ownership. Those are the only 3 things I would consider. Not exactly sure what the other legal options are in terms of incorporation or limited liability.

 

[gymdog]

You might want to consider Jeff Metzgers boot camp.

 

[sce]

I'm confused.

Will the management be run through his company? ie will students sign up through their system, finances be dealt with by their office etc. Will you be their employee? The other teachers be their employees? This would be easiest for you, as all employment taxes etc would go through them.

Or are you renting from the company? Is the company supplying the equipment?

There are other costs to consider: Insurance, training, on going supplies ie chalk etc.

 

[JBS]

Yes...go to Metzger's boot camp. You will need a solid plan...his program will help you understand how to build your plan.

https://www.metzgerbootcamp.com/home.htm

 

[BarCoach]

I am looking into the boot camp. Thanks everyone.
It wasn't entirely clear to me either, which way it would go. But I am writing up a proposal so I can kind of choose which way I'd like, and suggest that. Except, I can't just pay rent because I don't have the finances to buy the equipment. If I had the money, I wouldn't need his space. I would find a more ideal space in a separate building.

 

[BarCoach]

I think these are my options.
Ideally, the manager would buy the equipment and convert the space and I would work as his employee to run the program. This is more work for him.
Second option would be for him to loan me the money for the equipment and I would pay that off, plus lease the space. But if I can do that then shouldn't I just get a bank loan and find a separate building? Is there any benefit to getting a loan from him and being in his space?

Should I be proposing what is best for me? I sort of got the sense that he wanted me to do all the work and that he could provide the space but why not just go for exactly what I want? Right? Then if he says no maybe I can negotiate a loan.

 

[Aussie_coach]

That does not sound right to me. He provides a facility, the facility will be the same if you have 1 student or 1000. He should not be gaining all the profit from your business.

The general way gyms work is that the person providing the facility will charge you rent, you will pay your outgoing expenses of rent and wages etc and then take your own wage from the profits of the gym.

You may be able to work out a deal with him as you are a growing business, that you pay a smaller amount of rent initially and once you pass a certain student base you pay a larger amount. This may help you get in your feet initially.

 

[gymdog]

I am looking into the boot camp. Thanks everyone.
It wasn't entirely clear to me either, which way it would go. But I am writing up a proposal so I can kind of choose which way I'd like, and suggest that. Except, I can't just pay rent because I don't have the finances to buy the equipment. If I had the money, I wouldn't need his space. I would find a more ideal space in a separate building.

If you don't have the finances, then I don't see how you have any option here other than having him be the owner and you be the manager. In terms of that, gymnastics is a great investment, and will likely experience a boom period again following the 2016 Olympics.

 

[ollieblueeyes]

Bank Loans are pretty scarce right now. It is fairly common to have private lending ie he lends you the money just as any bank would. I would got that route if you truly want to be an owner.

I think the first question you need to ask is do you want to be the manager or owner? Being the owner brings flexibility and control, but also a ton of risk. Being the manager less risk but he will call the shots.

 

[BarCoach]

I finally heard back from the manager and he would like to meet on Friday morning! I'm just thrilled that it wasn't a definite, immediate no. What should I be prepared to discuss? The proposal I wrote already includes demographic and possible financial info. It explains what the gym would offer and outlines my experience. I would love to give him a whole PowerPoint presentation but he doesn't seem to have much time (our last meeting was very short). I will of course listen and respond to what he has to say but I would like to go in knowing a few things I should say to really get him on board with the idea.

 

[BarCoach]

Also wondering about a very informative, older thread that I read about the cost of building a pit. Can anyone help me find it?