Ok here is my two cents in this topic, I like the idea of a tourament which everyone can particpate in because it will give sort of an update of everyones skills.
At the begining of the tournament everybody should have a description of their gym, pokemon type, badge etc to show that they are motivated for this challenge.
Then each person will choose a pokemon from their team which will go well with the gym they have proposed giving the rest of us an idea of what to expect from them if the do become a gym leader.
Then each potiential leader is put into a lotto draw and fights are chosen by random, each fight should take place in a normal arena might have some terrain useful for ceratin attacks and stratergies.
Each fight will be a 1v1 and can either go for a set number of rounds or until one pokemon is knocked out (which ever you prefer). For something like this to work we will need dedicated refs and a low DQ time, maybe 1 or 2 days (possibly a tiny bit more, depends how long you want the tournament to go). Each round could be a knockout or a round robin which I would assume would take a long time so knockout might be best.
If we have as many as 16 entrys (which I assume might be the number we are looking at) it could easily go from 16 to 8 to 4. Which means the possible gym leaders would have to survive 2 knockout rounds. With a 2 day DQ timer and each 1v1 (from my experience) lasting about 5-6 rounds we could have a fair determination of new gymleaders within the month possibly less.