> any reduction in a gym's quality generally boosts its nearby competitors. Right, but the question is how visible that quality is to customers. If you skimp

> any reduction in a gym's quality generally boosts its nearby competitors. Right, but the question is how visible that quality is to customers. If you skimp on your ventilation or equipment maintenance, your customers will notice pretty quickly. If you skimp on background checks for your cheerleading coaches, nobody's going to notice on their own until the scandal hits. The only way customers know there's a difference in the coach vetting if the gym or the cheerleading company tells them. And while it may be possible for Company A and its gyms to distinguish themselves from Company B, it may not be; it depends a lot on the particulars. If they can't, they'll be at a disadvantage.