I Took Over a Commercial Gym and it's Been a Nightmare.

Edit: this post got way more comments and attention than I ever would have guessed. Thank you all for the helpful suggestions. I've added an addendum at the bottom of the original post. Some background: about ten months ago a friend told me about a gym in my city that was being evicted. The gym was a franchise and had been at that location for about 20 years and I drove by it all the time and it always seemed busy so I was intrigued. I did some sleuthing, found the eviction case in the court records, and when I skimmed it over it seemed like there were major partnership issues between the owners of the gym. I looked up the gym owners and they were suing each other. There was a "for lease" sign at the entrance to the shopping center so I called and, surprisingly, it was the actual property owner who answered. Nice old guy. He'd owned the property for close to 30 years. To prevent the story from becoming too long I negotiated a very favorable lease on the gym. I don't know why I thought it was a good idea to get into a business I have no background in but it's almost like I got sucked in by the idea of getting a good deal... which is a weakness of mine. Some brief background on myself: I have a full time job that pays well. Financially I'm in a good spot but part of me wants/wanted to own a couple of businesses. Maybe it's ambition or maybe all of the "passive income" slop somehow seeped into me, idk. However I work a ton and have **zero** time to actually run a business. This was clearly my first mistake but I didn't realize how bad the gym business was. A bank had a lien on the equipment and I tried to get in touch with them to buy the equipment but I was never able to get in touch with anyone. So I bought a mixture of new and used equipment for the gym and this was a **huge** mistake. The new equipment worked fine. The used equipment has been a nightmare. Treadmills constantly break and replacement parts are hard to find. The selectorized weight machines have had tons of weird problems like squeaky bearings that are impossible to fix. The company I bought the used equipment from sold it as "refurbished" and supposedly gave me a five year warranty on the equipment but I'll let you guess how that's worked out. Literally from my first complaint they've ghosted me. I went with ABC Fitness as my payment processor because every gym I have ever been a member of in my life used ABC Fitness so I figured "if everyone uses them I should just use them". When I spoke to their sales people they basically pitched it as taking 5% of my gross revenue and they really upsold their ability to retain members collect on outstanding balances. I made the mistake of not reading every single word of the contract and missed a ton of fees. Right now with all of the additional fees they charge they are effectively taking close to 10% of my gross. Also, their hardware and software is absolutely archaic. I started interviewing staff and hired what I **thought** was a manager from a gym on the other side of the city. It turns out he was not a manager but just an hourly employee. That's on me for not doing sufficient due diligence but, at the same time, he completely lied about his experience. He went so far as to tell me (and for some reason I believed him) that he knew how to run ad campaigns on Google and Facebook. I should have known that was too good to be true but I was wearing rose colored glasses. We opened in November and the first blow was that we were not able to get much of the old membership. They had all moved on to other gyms. The manager I hired and gave an ad budget to? I have no idea what he spent the money on. The money went to Google and Facebook but the ad campaign was not effective at all. Our membership fell way short of my targets. We only got about 400 members instead of the 750 I was hoping for. What's worse, starting around March, about 23% of membership just stopped paying. These were people that had signed up for annual plans (for the lower rate) but their credit cards wouldn't process. It was shocking to see. We're slowly grinding and adding new members but I'm way behind where I'd hoped to be. My hourly employees have been less than reliable. Part of their duties is to clean the gym and the restrooms. I have cameras in the gym that I sometimes watch and they basically all just hang around the front desk. What does my "manager" do? Nothing. He just walks around aimlessly. Based on network traffic (which I can monitor) it appears he spends most of his day on sports betting websites. I go in to the gym once per week to check on things and I do a quick meeting with my manager (who I should fire). He gives me an update on how things are going and what ideas he has to drive membership and revenue in general. So far he has: 1. Brought in a third party to sell drinks and supplements. They're supposed to pay us rent. They are yet to pay us a dime. I need to "evict" them but I don't even know how that works. 2. Brought in several trainers that were all supposed to pay us rent. Maybe three trainers have paid us two or three times each so far. I keep telling my manager that they need to pay or get out. He's adamant that they need to "build their client base". I know most gyms sublet the training rights to a third party but my manager thought that since we are just starting out the best thing to do would be to "rent" directly to trainers. 3. Brought in some body builders to do photo shoots. His rationalization was that it was "free advertising". I actually think it has been counterproductive and these people act like they own the gym. There's more. This has gotten much longer than I anticipated and has been a bit of a rant but it's like every aspect of this business blows. I feel like everywhere I turn is a scummy used car salesman with no end in sight. Here's a summary of my lessons learned: 1. Don't buy a business if you have a full time job that leaves you with zero time to be involved. 2. Don't buy used gym equipment thinking you're getting a better warranty. 3. Verify people's resumes. 4. Read every last word of your contracts. 5. If you don't have a good manager don't assume your hourly employees will magically step up to the plate. The one silver lining in all of this is that the landlord has been super responsive in handling things like roof leaks and broken HVACs (he agreed to handle the HVACs for the initial term of the lease... like I said I got a great lease). I've heard so many stories over the years about bad landlords that this has been a breath of fresh air. What am I going to do from here? I have no idea. I'm sure I'll figure it out. **Addendum** First, I want to address the combination of new vs used equipment. I bought new free weights, olympic weights, benches, etc. because the price difference between new and used was minimal. I bought used cardio equipment because my choice was between new equipment with a 1 year warranty from a vendor that was on the other side of the country or used equipment with a five year warranty that was refurbished from a seller that was six hours away. I went in saw the equipment in person. I never expected them to completely ghost me on warranty claims. Second, I'm firing the manager this coming week and I'm just going to have hourly employees cover the gym while I look for a new manager. Third, I'm going to overhaul the incentive structure for my hourly employees to sign up new members and I'm going to change the pay and incentive structure for the incoming manager. Fourth, I'm going to personally investigate the situation with the trainers who aren't paying and the guy who's selling drinks and supplements and not paying. The theory that they're paying the manager directly is plausible. Again, this got way more comments than I ever imagined so I'm sorry if I don't respond to you directly. Thank you for all of your input.