It hurts my gym (we're right around 60). Like I said, I agree that I don't like seeing little ones on senior teams, but at the same time, I really hate seeing people leave the gym because we can't put them on a level they belong. Why would I ever (if I'm an owner) turn people away from my business? That's just bad sense. If a 9 yr old walks in with all level 3 skills (tumbling, stunts ect), but I only have a youth team at level 1 I'm supposed to tell her to go find another gym? I'll be putting myself out of business.
Since WC isn't that far, I'll use them as an example. They have a team at pretty much every level and age. My gym, suzie allstars has a youth, junior, and senior team. Youth is level 1, Junior is 2 and Senior is 4. I struggle to keep my kids in the gym because there's a "name" around the corner. "Jane" is a kick butt little 9 yr old. She's got all her level 4 skills. Unfortunately, Jane is too young for Seniors. She's also bored out of her mind on level 1. She's not challenging herself, and not progressing in her cheer because she's being held back. I tell her that level 1 is the only option for her, and that if we can't meet her needs, WC can because they've got more levels. Jane leaves, as does her sister. Next week, Jane's friends leave too. Suzie allstars just closed because we lost our kids.
Why, as a business owner, would I want to turn away business? Yes, I'm here for my kids, I love them and I want what's best for them, however, it's also my business. I'd be potentially putting myself out of business. Now, since I'm not an owner but just a coach, I also see it as dilluting competition. If all the small gyms lose their talent to big gyms (this time because they're refusing them instead of just losing them), the gyms that survive will be even smaller. Big gyms will have to travel that much more to find competition.