How Louisiana’s Cross Gates Family Fitness has learned invaluable lessons by triumphing over tragedies.
“Never let a good crisis go to waste.”
These words were famously spoken by Winston Churchill during World World II. They are words that Larry Welch, the co-owner of Cross Gates Family Fitness in Slidell, Louisiana, has also learned to live by.
Founded in 1981, Cross Gates Family Fitness has faced its fair share of crises, including a devastating fire, Hurricane Katrina and most recently, the COVID-19 pandemic. Through each trial and tribulation, the company’s leaders have gleaned a number of important lessons — turning lemons into lemonade, if you will.
Following are the lessons learned from each crisis, and how they have made Cross Gates Family Fitness the esteemed organization it is today.
The Fire
Cross Gates originally opened as a neighborhood racquet and swim club. It was acquired by Larry and Merryanne Welch in 1994. They quickly got to work reimagining the facility as a multipurpose family destination for the Slidell community.
The couple was thrilled to own their own facility, as they’d fallen in love working as managers at a nearby health club. However, about a year after officially taking ownership of the club, and literally days after finding out they were about to have a second child, 80% of the club burned to the ground.
The only thing that survived was a small metal building housing four racquetball courts. “It was literally trial by fire,” recalled Larry.
Thankfully, the club was insured, and the couple thought outside the box to figure out how to stay afloat during the rebuilding process. They brought in trailers to serve as the men’s and women’s locker rooms, and converted the surviving racquetball courts into areas for strength training and cardio.
“It literally looked like some kind of FEMA hurricane rescue center — we had all these trailers everywhere — and that was the adventure,” said Larry.
According to Larry, this is when the Cross Gates Family Fitness community really solidified, with the membership rallying around the club as a result of the tragedy. In fact, many members continued to pay dues despite not having access to the full facilities.
To give back, the club dubbed these paying loyalists “chartered members” and promised their dues would never be raised so long as they stayed a customer.
“It was the connection to the community we had already started to make that really shined through,” said Larry. “To this day, 25 years later, when we have a dues increase, we have to go in and identify all of our chartered members to make sure we don’t increase their dues. There is no doubt the fire experience is what matured us to embark on this huge growth pattern we’ve been on ever since.”
Hurricane Katrina
The next crisis to face Cross Gates Family Fitness, which had grown to two locations, was Hurricane Katrina in 2005. The storm impacted 42% of the club’s entire market, damaged the main facility and completely flooded the newer, second location.
“Personally, my house flooded, my church flooded, my kids’ school flooded,” recalled Larry. “But then you just have to start multiplying that — 42% of my employees, in general, lost their house, much less their livelihoods and so forth. Plus, the impact on the members. That just gives you some perspective on the magnitude of the devastation.”
For Larry, the biggest lesson here was the importance of having faith.
“For me, this definitely became a spiritual journey,” said Larry. “You’ve been through the fire and you work so hard. And then Katrina hits. It was discouraging for me. I was at a crossroads in my life. It was not easy, but I developed a much deeper sense of my faith, and I developed a slogan that says, ‘There’s just nothing that the nearness of Christ can’t handle.’ That became and still is my mantra.”
It was also during this time that Cross Gates became even further convicted on the importance of community and giving back.
The original club, which is the biggest location, was one of the first businesses in the market to get electricity and water restored. So, they immediately opened it up to the public, allowing anyone — member or not — to take a shower, charge their phone or just sit in the air conditioning. In addition, they ensured volunteer groups had a place to shower and rest in between reclamation efforts.
This lesson is still felt today, with giving back remaining a key component of the brand. Over the years, Cross Gates Family Fitness has partnered with organizations like Habitat for Humanity and Giving Hope, helped build local parks, and more.
“Katrina is when our organization learned to give back in a new way,” said Larry. “It just became an automatic response.”
The COVID-19 Pandemic
As a result of the fire and Hurricane Katrina, Larry said he felt more personally prepared to handle the third and current crisis facing the organization — the COVID-19 pandemic.
The brand’s now three locations were shut down for two months, and have continued to face ups and downs as they navigate changes in consumer sentiment, new variants of the virus and more. However, Larry has felt emboldened by the community spirit apparent in the industry during this time.
“Whereas the other tragedies were a bit more singular in nature, the pandemic is something we are all going through together,” said Larry. “I have leaned on my REX roundtable and the group mentality, and that has been super valuable for us.”
Similar to the fire, Larry and the club’s leaders have thought outside the box to keep the club solvent, instituting a dues increase and adding additional profit centers, including a “Plus Membership” with additional perks, an online retail store and more.
Although the club may look different in 2022, Larry is confident the club can continue on the growth pattern it was on previously.
“We inherited the racquet club with less than 2,000 members and one location,” said Larry. “We now have three locations with almost 20,000 members. We were growing before the pandemic and I think we can still grow, it just may look different.”
In fact, Larry said the club has recently decided to double down on the member experience and the service the club provides.
“We will probably consider another dues increase, but we’re going to make sure the service we deliver outpaces that,” explained Larry. “So, we might end up being a company with fewer bodies. But hopefully, we can replace that revenue and the profit — and the people we do have will get a better experience than they’ve ever had before.”
People First
Through each tragedy, a common theme has been the importance of people. In fact, Larry attributes the “Cross Gates Difference” to its hardworking, passionate staff.
This includes Nate Welch — Larry’s nephew and the club’s vice president of operations — who was drawn to the organization as a result of the great culture and family atmosphere his uncle has cultivated at Cross Gates Family Fitness.
“I respect my uncle tremendously,” said Nate. “Larry is the guy who cares about people, and I am the result of that, but so is the entire organization.”
This is no accident. According to Nate, the club’s leadership is strategic on how it prioritizes people and cultivates culture.
Guiding lights for the organization in this effort have been the books, “The Advantage” and “The Five Dysfunctions of a Team” by Patrick Lencioni, which have been key to the club operationalizing organizational health. From these books, the club consistently has “thematic goals” that create clear priorities for staff, holds off-site meetings with the leadership team and creates direct growth paths for teammates.
Cross Gates also prioritizes peer-to-peer recognition. Staff can give each other a shout out based on another team member’s embodiment of the club’s acronym, WE-CG, which serves as a pillar to ensure everyone visiting a Cross Gates Family Fitness location has the best experience possible.
“We have 100 shout-outs handed out each month,” said Nate. “Team members who get the most are awarded gift cards at the end of month and an overall winner is recognized at our annual Christmas party.”
Larry and Nate also hold “Connect” meetings via Facebook Live, which provide opportunities for staff to pose questions to the leadership.
“It’s a conversation of everything going on in the company, designed to drive transparency,” explained Nate. “Every team member at every level is invited and encouraged to ask questions and present concerns and opportunities.”
In addition, to further emphasize the club’s family atmosphere, Nate even sends welcome letters to the significant other of the person being hired that says, “You’re a part of the team now, too.”
Last but not least, Cross Gates Family Fitness will soon implement employee surveys similar to those offered by Medallia for members, aimed at learning more about the employee experience and any areas for improvement.
In fact, this is a service MXM — Medallia’s partner to the fitness industry — has had for some time, but was released as an official product on January 1, 2022.
According to Blair McHaney, the CEO of MXM, a brand’s employee experience — like that created at Cross Gates Family Fitness — is integral to creating a great member experience across the board.
“Employee experience drives member experience,” said McHaney. “The better the employee’s experience, the better the member’s experience. There’s also a heightened need for this now due to the Great Resignation, where a lot of people are leaving their jobs. Being able to get some insight into how engaged your staff is can give you some insight into potential turnover issues in the future.”
For Larry, there is no greater just cause than that of Cross Gate Family Fitness’ people.
“My No. 1 priority is identifying, acquiring and then creating an environment where great people can reach their potential,” said Larry. “That’s what I started from the very beginning, and it never ends.”
As Larry looks back on the many crises the club has navigated, with his faith intact and great people in place, he feels grateful for the many lessons learned, and confident the club can navigate any future obstacles thrown its way.
“It’s one day at a time,” said Larry. “In the midst of the crisis if we look at the big picture, it can tend to be overwhelming. My philosophy has been simply to take the next best action I can identify. We do this day after day, hour after hour, and then at some point we look back and realize we managed the crisis pretty well.”
