Well, I said I didn’t see it happening anytime soon, but it looks like the UFC may coming to your home town after all.

And it ain’t going to be pretty.

Yesterday, Dana White of the UFC announced the launch of a nationwide chain of UFC branded gyms. White says he’s partnered with a private equity firm to help fund the venture (read: a bunch of people with a lot of freaking money).  White’s partner, Mark Mastrov, says they have plans to open between 5 and 10 locations in the next 6-12 months.

Click here to see the interview on CNBC.com

That’s a very aggressive launch, and I don’t doubt that they’ll be able to do just that. In fact, if you operate a school in a large market (like Los Angeles, Chicago, New York, Houston, Las Vegas, etc.) you should probably expect to be competing with the UFC very soon.

Yep, that’s right… you can expect to be going head-to-head with the biggest marketing juggernaut the martial arts industry has ever seen.

So, Should Martial Art School Owners Be Worried?

In a nutshell, yes. The UFC has the power and financial backing to do what no one else has done before – and that’s take martial arts instruction and training into the big box gyms.

Just imagine what it would be like if Bally’s, Gold’s, 24-Hour, or World Gym started hiring martial arts instructors and offered a full compliment of martial arts classes, that their members could take in an a la carte fashion… all incuded for their $20 – $40 a month membership price.

I think you can see where this is going. Even though White and Mastrov say they’re going after all those big-box gyms I just mentioned above, this bears some very bad mojo for martial arts school owners as well.

(And think about this for a second… if you have UFC equipment, hats, t-shirts, heavy bags, mma gloves, etc. on display or for sale in your school, you could very well be advertising for your future competition.)

So, Are There Any School Owners That Don’t Need to Be Concerned?

Yes, and here they are in no particular order:

  • Martial art schools that have extremely low overhead and high profit margins; basically, those schools that follow a Small Dojo, Big Profits business model. (If you’ve been doing well during this recession by following such a model, you’re on the right track.)
  • Martial art schools that cater to children, or that earn a significant portion of their income from teaching kids –
  • Martial art schools that cater to families, and those that offer a family-friendly environment –
  • Martial art schools in smaller communities and markets; chiefly those that don’t already have one of the big chain gyms in their area –
  • Martial art schools that are owned and operated by savvy instructors who know how to capitalize on the UFC’s popularity (see below).

But, Here’s The Good News…

But, there is an upside to all this. Once again, the UFC is going to be doing something that no one else has been able to do on the same massive scale in the history of the martial arts industry.

And, that’s to introduce martial arts to the masses. So, it’s going to be up to the individual, independent school owner to capitalize on the UFC’s move into the fitness market, and to turn that to their favor.

How?

By doing what I’ve been telling you to do all along… and it’s the exact same thing that the most successful independent personal trainers in the fitness industry have been doing for years:

  1. Go small.
  2. Go niche.
  3. Go personal.
  4. Go boutique.
  5. Charge more.
  6. And, offer a higher quality of service than the big-box gyms can possibly ever offer.

In other words, don’t try to beat Wal-Mart at their own game. Specialize by picking a niche and do it better than anyone else in your market. (And you can bet your bottom dollar I’ll be coaching my clients on how to do exactly that in 2009.)

A Few Parting Thoughts

Overall, since Dana White took over the UFC has been very good for the martial arts industry in general. Dana has taken a sport that had become something of an embarrassment to the industry, and he turned it into a household name.

And, in doing so, he’s helped bring a lot of business to martial arts schools worldwide.

So, if you end up with a UFC gym in your backyard, and you can’t find a way to turn the increased awareness and public interest in the martial arts that it’s going to bring into more business for your school, then don’t blame Dana White.

Instead, blame yourself for not figuring out your game plan now when I first told you about this potentially huge change in the martial arts industry.

Mike Massie is the author of Small Dojo Big Profits and runs a martial arts business coaching website for new instructors and small school owners, StartingAMartialArtSchool.com.

19 Comments

  1. Jeff Barnes on January 28, 2009 at 8:28 am

    It is interesting to see this happen. If is kind of like baseball. You create your farm teams to corral the talent up to the bigs. You get enough of these UFC gyms around and you will have a constant stream of new talent coming to their program. It is a smart business decision.

    From a small school perspective I think that there will always be a market for what I do. No matter what happens you will have those ego driven, over adrenalized junkies looking to make a name for themselves in the ring. More power to them.

    Like you said in this article, the key will be to specialize in your niche. And I think if you specialize in the children and family you are going after the bigger market.

    What I see is that those interested in becoming the next ultimate fighter are in the age bracket of 16-30. What I have found in running my own school is that those males in that bracket rarely have money. If they are looking to fight, they have to dedicate an exorbitant amount of time training to be at the top of their game. This leaves little time for them to have a job.

    The UFC gym will have to charge a high price in order to fund the marketing hype they need to launch this product. They will however be targeting those with the least ability to pay for the program. While I know that the sheer numbers will play into the advantage and strategy of the UFC, I think that my schools will survive none the less.

    Jeff



  2. Solomon Brenner on January 28, 2009 at 9:03 am

    thanks for the update I think you are right on with your way to handle this



  3. Jason Stanley on January 28, 2009 at 11:20 am

    Mike,

    I’ve got to agree. In my area there are about 10 or so MA schools within a 8 mile radius, so there is a lot of competition already in a population of about 50,000.

    When I started my school 6 years ago at the local community center there were already 2 other MA programs running there – and they’re still there! Meanwhile we grew and grew to a full time school because we did exactly the 6 steps you described above.

    When the UFC comes to town, all these guys who jumped ship chasing the dollar trying to turn their traditional school into an MMA school (instead of establishing an IDENTITY for their school and working on growing it) will be faced with the same competition issues again as their students are lured away.

    As soon as the next “big thing” comes along, you can bet they’ll jump ship again and their identity will be lost once more.

    Now more than ever martial arts school owners need to get serious, have a solid identity for the school with a matching business plan because it’s not just the recession hunting you, it appears there’s a new predator coming to town in the way of the UFC.

    Jason



  4. Harry Brofsky on January 28, 2009 at 12:03 pm

    There are other big names already in the arena. Gym/Training centers that are franchising gyms using big name fighters like Randy Couture and Rich Franklin. The name and therefore the marketing recognition is there but will the quality instruction? I think this is one niche that a smaller school can capitalize on.



  5. Mike Massie on January 28, 2009 at 12:27 pm

    Man, I love a lively discussion! Keep ’em coming, folks.



  6. Jeff Barnes on January 28, 2009 at 3:15 pm

    That is something I was thinking about when I heard of the UFC opening the gyms. Who exactly is going to be teaching at each?

    Will it be just some watered down curriculum where the instructors are taught by videos produced by the UFC? There is a probably no chance that you will actually get taught by one of the big names in the industry.



  7. Jason C. Brown on January 28, 2009 at 10:48 pm

    In my opinion, Mike’s Small-Dojo-Big-Profits is the only way to go. I come more from a fitness backround but operate off the same model.

    There’s a big box gym 1/2 block down from us that charges much less then we do and there is no way they have the loyalty and community that we have.

    This article is right on Mike.



  8. L. Gillespie on January 29, 2009 at 4:03 pm

    Where I live there is already a 24-hour gym with a martial arts instructor.



  9. Ray Mannion on January 30, 2009 at 6:05 am

    Thanks for the breaking news Mike. In my opinion, big box gym martial arts classes will not be able to thrive any stronger than their kickboxing or pilates followings. I don’t know many people who have taken or taught those classes for more than a year. People simply get bored. I think there will always be a need for independent martial arts schools because only a private owner can take the personal stake in their students development and keep them growing for many years.
    The key will be for the independents to remain SUCCESSFUL through the small-dojo-big-profits approach. It pains me to hear of excellent martial artists who launch a school with loyal students but can’t maintain the overhead. Keep up the great work.



  10. Harry Grimm on February 5, 2009 at 10:17 am

    First off they will open the gyms in large population centers before hitting the secondary market. as they encroach on the smaller areas the other gyms will take notice and start adding classes of their own. but as with Tae bo it will only draw a certain crowd. As I understand it the UFC gyms will not be training fighters and could be looked on as the YMCA is. A good place to start but if you want to really learn the art you go some where else. Not to say that we shouldn’t be concerned but done right they will help raise the awareness and benefit of training. True training in martial arts (non MMA) cen never be duplicated by the big box gyms. the popularity of it will diminish over time and become part of the scene not the whole thing. Don’t be afraid of Wal Mart coming to town use it to your benefit to niche your product and piggy back on their market raising awareness. I don’t believe they are going after the 18-30 year old market when they annouce it on CNBC and with the power brokers invovled



  11. Byron on May 10, 2010 at 5:52 pm

    The best article Ive ever read because they just surprised me lol I havent read the comments above yet but here’s mine….
    They are charging $89 a month for Unlimited Classes,
    TMA from Hapkido to TKD and
    MMA Muaythai and BJJ
    The Kids Place has an Arkade ha and the “UFC PPV” will be held for FREE OH and the GYM is 24hrs Martial Arts called Ultimate from 6am to 10pm….
    I called the concord location and the LA is starting June 1st



  12. Byron on May 10, 2010 at 6:05 pm

    The place is huge and they are advertising all over the city….Kids and Adults!
    $89 scares ME! I agree with the comment above about them being viewed as “YMCA of Martial Arts” and will be watered down but the look of that place, the equipment they have, 24hour schedule and that DAMN cheap price, WOW!!



  13. Javier on May 12, 2010 at 12:20 pm

    You know, I’m fine with them charging really cheap lessons, because I go off of the belief of: “if cheap is bad, than expensive is good” than my school will thrive.

    In addition, I can almost guarantee that many of their instructors will not have the experience some of us have.

    Not trying to brag, but make a point, I’ve been training for 20 years, working with kids for 17 years, won a World Title in NASKA, etc.

    Mom’s wanna know if you’re good with kids and are personable.

    And, as I continue to expand my resume with credentials and experience, it justifies my rates.

    Plus, I look at it like this. If you REALLY want to learn the REAL stuff, you go to a smaller venue that specializes. You don’t go to a big box location.

    Do you go to Taco Bell for Mexican food, or to the hole-in-the-wall shop off of 3rd Ave and Main St. called Manny’s Mexican Food?

    Like Mike said, niche is key.

    Create a following of consumers that rave about your services and you will make it through the giants.

    When was the last time you went to Wal-Mart and you RAVED about the service…?



  14. Mike Massie on May 12, 2010 at 6:11 pm

    Javier, I agree… but it’s still important to study the history that has occurred with other industries that were taken over by corporate giants.

    Why?

    Because, by studying the survivors among the independent operators in those industries, we can begin to understand what it will take to survive the eventuality that big box gyms will come to dominate the martial arts industry.

    You see, the popularity of the UFC is a double-edged sword for independent school owners. On the one hand, it has increased public awareness of the martial arts as a viable choice for fitness and recreation among the mainstream.

    But on the other hand, with the success of the UFC Gym concept, and as they win more market share in the fitness market, the large gym chains will soon realize that they can adopt a similar strategy in their own centers.

    Say what you will about the fitness industry, but one thing is for sure… they follow money and adopt trends rapidly.

    So, I suggest that smart school owners study what independent business owners have done to survive takeovers in other industries, and copy what they’ve done (niche, boutique, lean and agile, focus on customer experience, etc.)

    Doing so will allow you to survive and thrive in the coming decades.



  15. Byron on May 12, 2010 at 11:12 pm

    I totally agree with You Sir….
    And Javier,in my opinion for them to teach a quality class, they will have to care about people and you tell me ONE slothful fitness gym that does?
    My beef is a new martial arts student doesnt know the difference, so the FRONT end is going to kick but man. “Lean and MEAN”



  16. Juli on May 13, 2010 at 11:36 am

    Does anyone know the pay structure for the instructors? Are these the people that couldn’t make it in their own schools, so now they’re working for Fitness McDojo? I’ve never worked in a gym – don’t know what they pay their specialty people. I ask because this will likely affect the quality of instruction.



  17. Mike Massie on May 13, 2010 at 12:43 pm

    Probably about $10-15 an hour, but that’s just a guess based on what the big gym chains start their PTs and group fitness instructors at.



  18. Javier on May 13, 2010 at 12:59 pm

    Good points Mike.

    It’s definitely a challenge, but a well received challenge nonetheless.

    Personally, I am trying to go against my big fish, Mile High, Seos National Karate, United Studios of S.D., etc.

    Once I learn how to get past my current big fish, I’m sure my competitors will catch on and I will have to change my strategy again. Which is fine, b/c it will prepare me for the next level.

    And, UFC will come back out to it’s original start, Colorado. It’s only a mater of time.

    But, by than, I’m sure I would have refined my marketing strategy and developed a network within my community who people want to do business with.

    Tiger Woods changes his golf swing every 3-4 years or so… why? Because he’s looking to stay on top. Well, until his coach just left him ;)

    I’m just trying to stay on top of my game. :)



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