Are Brazilian Jiu-Jitsu Affiliations Just a Ponzi Scheme?

24 Jan, 2023

The sheer number of the number of BJJ gym affiliations there are is truly incredible. How does a consumer even choose? The list is massive – the very uncompleted list: 10th planet Jiu Jitsu, Carlson-gracie, Gracie-Barra, Alliance, Atos, Renzo Gracie and I’m sure there are half a dozen affiliates more with the name Gracie-something. My intent isn’t to disparage them, most of these gyms at their headquarters are excellent gyms. However the system of making gyms an affiliate system is getting rather degraded. In some senses it feels almost like a Ponzi scheme or some strange pyramid business structure.

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Sounds familiar?

There are also some wild allegations out there as well – about pay to be blackbelt affiliate schemes.

Colby Convington from American Top Team on BJJ affiliations:

“It’s a Ponzi scheme. It’s a money laundering system for people to make money. They say that it’s about respect. These are the same people that are cheating on their wives, having infidelity in the MMA gym, cheating on their taxes… it’s all bulls***, man.”

Colby Covington Calls BJJ Belt System ‘Ponzi Scheme’ & Money Laundering For BJJ Instructors

“Hey you want to make money? You need to pay me $5000 and through our larger affiliate network you will attract customers by our name, but you have to recruit your own customers and that’s how you make money”. Sure, this is how franchising works in a business sense, but the quality of a Subway in Des Moins, Iowa is virtually indistinguishable from the quality of a Subway in Manhattan. Now let’s apply this to BJJ.

For the sake of not picking on anyone, let’s call our gym name “Gracie-Porrada” and base it in San Diego. Our coach is an IBJJF world champion and our classes have 10 blackbelts training. This sounds like an awesome gym, yeah? Well now one of the blackbelts wants to open his own gym somewhere in Hong Kong. So he decides to pay whatever affiliate fee from Gracie-Porrada to open his dojo in Hong Kong. The problem is the quality isn’t tranferable. Sure, the instructor may be of the same quality as any of the other blackbelts promoted from his original gym, but that’s not what makes a gym. Over time, he will lack training partners and his skills will deteriorate. He will have to build a gym and so on. Anyone can realize that the quality of affiliate gym is under no circumstances equal. This is how it usually operates under optimal circumstances as well.

The system becomes so lucrative for these gyms that some may rush to promote blackbelts so they can open their own gym and expand the brand, thus continuing the cycle. It ultimately waters down the sport. Soon you have so-so purple belts wearing blackbelts promoting other blackbelts and so on.

What it ultimately comes down to, as you the consumer – you don’t owe anything to a brand name in your journey if you have payed your bills. Of course if you get sponsored training and you’re a full time athlete, conditions apply. Everyone understands the special connection between an athlete and a professor and I’m not trying to diminish that. Just don’t feel trapped by brand loyalty, especially if you are traveling or moving. Or if you feel like you’ve hit a dead end. If you do not feel the quality is as what you expected, move on. If you think you can get better training elsewhere, do it. Nobody likes a fair weather sailor anyways. Jiu Jitsu is a journey with many captains and many boats, but only one sailor: you.

Written by Benjamin Reed, BJJ purple belt from the USA, follow him instagram.com/benjamin_reed_phuket