Feasibility Study Company Independent Feasibility Analysis

Fitness & Recreation · Asset Class

Fitness & Recreation Feasibility & Market Studies

Independent, lender-grade analysis for gyms, health clubs, and studios across SBA 7(a) and 504, USDA Business & Industry, conventional bank, equipment, CMBS and net-lease, and bridge capital. This page is our standing read on why a gym is a going concern valued on cash flow rather than passive real estate, how membership-ramp and churn forecasts fail review, and the difference between the market study, the feasibility study, and the going-concern appraisal a lender requires.

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77.0M
2024 US fitness membership, a record1
24.9%
Membership penetration, an all-time high1
66.4%
Annual member retention; ~1 in 3 lost yearly2
$47B
2026 US gym & health-club industry revenue3
The Fitness Thesis

A gym is a going concern, not passive real estate.

Fitness is the consumer asset class lenders underwrite on cash flow, membership, and churn rather than on bricks, and, critically, an operating gym is valued as a going-concern business, not as passive real estate. That single distinction separates it from a multi-tenant retail center valued on its rent roll: here the recurring-membership subscription is the analysis. A gym is a bundle of leasehold or real property, FF&E and equipment, and business goodwill, and roughly 90 percent of Planet Fitness's 2024 revenue was recurring dues, royalties, and annual fees.4 We prepare the market study, the feasibility study, and the going-concern appraisal input a fitness file needs, aligned to the standard that will judge it.

The market itself is defined by a shift in format mix. The industry has fully recovered from COVID and set records, with US fitness-facility membership reaching 77.0 million in 2024 at a record 24.9 percent penetration, yet the recovery ran through the high-value-low-price budget tier, not the legacy one.1 The pandemic bankrupted Gold's Gym, 24 Hour Fitness, and Town Sports, and Blink Fitness followed in 2024, even as the aggregate set records.26 Format economics differ by an order of magnitude: an HVLP budget club, a boutique studio, a 24-hour key-card box, and a premium lifestyle club are four different businesses, and a single national number blends a booming value tier with a distressed legacy tier into noise.

What follows is organized as a working desk: a national and market supply-and-demand monitor, the ramp-up, churn, and operating forensics that sink fitness studies, the capital-source routing that decides which deliverable a project needs, and the study-type distinctions competitors state loosely. A net-leased fitness property, meanwhile, is a different asset entirely, valued as real estate on tenant credit near a 6.0-to-7.0-percent cap rate, against an overall single-tenant net-lease retail cap rate around 6.5 percent.1314 Every figure is dated and attributed in the sources below.

The Supply & Demand Monitor

Where the fitness market stands, market by market.

A demand-and-opportunity read for the major US fitness market types, calibrated to named national sources. Metro-level penetration, churn, and revenue-per-member data are largely proprietary and thin; the reads below are qualitative and should be verified in a commissioned study.

The national picture frames every market. US fitness-facility membership reached a record 77.0 million in 2024, up 5.6 percent year over year and extending the strongest two-year growth streak on record, at a 24.9 percent penetration rate, the highest ever.1 IBISWorld puts the Gym, Health & Fitness Clubs industry at $47.0 billion in 2026, growing 1.3 percent that year and at a 3.6 percent CAGR since 2021.3 But the aggregate hides a sharp shift in format mix: high-value-low-price (HVLP) budget operators contributed more than 42 percent of total US club growth from 2019 to 2024, and Placer.ai visit data show low-price gyms outrunning mid-tier and premium segments since the start of 2024.67 The recovery has been concept-specific rather than universal: the pandemic bankrupted Gold's Gym, 24 Hour Fitness, and Town Sports (New York Sports Club) in 2020, and Blink Fitness followed in 2024, even as membership set records.26 Net club counts grew at only about 0.5 percent a year from 2019 to 2024, with Sunbelt metros adding capacity while the Northeast and Midwest largely returned to pre-2020 levels.24 The at-home threat that loomed during COVID has reversed, with Peloton's membership declining every year since its 2021 peak to about 5.8 million as consumers returned to gyms, validating the durability of brick-and-mortar fitness.23

Opportunity read: Opportunity / underserved Deep but competitive Saturated / shakeout risk. Reads are qualitative and format-specific; density and demand vary at the trade-area level.
Market type Demand profile Competition density Best format-fit Opportunity read
Dense urban coastalNYC, SF, LA, Boston, SeattleHigh density & income; strong Gen Z / MillennialVery high; boutique-saturatedBoutique studios, premium / luxurySaturated
Affluent suburbanSunbelt, tech suburbsHigh income, family households, car-dependentModerate–high; HVLP infillingHVLP big-box, premium, 24-hourOpportunity
Middle-income suburban / exurbanModerate income, value-consciousModerate; HVLP-ledHVLP budget, 24-hourHVLP sweet spot
Small town / ruralLower density & income; higher obesity, low accessLow24-hour (Anytime Express), independentUnderserved
High-fitness-culture statesCA, CO, urban coresLead national participationHighAll formats; boutique / premium overweightDeep but competitive
High-obesity / low-access regionsparts of South, MidwestAdult obesity ~35%; lowest fitness accessLow–moderateHVLP budget, 24-hourLatent demand

Market-type reads are qualitative, calibrated to the cited national data; metro-level penetration, churn, and revenue-per-member figures are largely proprietary (Placer.ai, CoStar, HFA operator surveys) and must be sourced from a commissioned study or a franchisor's regional Item 19 data. See sources 1, 6, 7, and 24.

Penetration is at a record, but attendance and retention are thin

Membership penetration reached its highest level ever, 24.9 percent of Americans aged six and older in 2024, roughly one in four.1 Participation skews young, with about 73 percent of Gen Z and 72 percent of Millennials using fitness facilities, and toward higher incomes, with households above $75,000 representing just over half of memberships.24 But the average member visits only about 1.5 times per week, half of new members quit within six months, and most are gone within ninety days.12 Penetration measures who joins; it does not measure who stays, and a demand read that stops at penetration overstates a subject's durable revenue. Fitness spending is also durable-but-discretionary: one personal-finance dashboard found only 23 percent of Americans would cut fitness spending versus 44 percent for dining out, though marginal members remain among the first to cancel when budgets tighten, so a demand shock should be stress-tested.25

HVLP, boutique, and full-service are three different businesses

The format determines the economics by an order of magnitude. HVLP budget gyms (Planet Fitness the archetype, plus Crunch, EoS, Youfit) run $10 to $30 monthly dues at high volume on minimal labor; Planet Fitness alone ended 2024 with 19.7 million members and 2,722 clubs, roughly 90 percent recurring revenue, and raised its Classic membership from $10 to $15, its first increase since 1998, while still adding members.4 Boutique studios (cycling, HIIT, Pilates, barre) run 1,000 to 5,000 square feet at premium per-class pricing; the segment boomed to a $40.1 billion global market by 2024, then shook out, with Xponential Fitness narrowing from eleven brands to five amid roughly $39.75 million in settlements.1122 Premium clubs like Life Time operate roughly 94,000-square-foot centers and grew average revenue per center membership to $3,531 in 2025.8 Between the two, 24-hour key-card gyms (Anytime Fitness the archetype) run small 4,000-to-12,000-square-foot boxes on a flat $799-per-month royalty, with reported average unit volume of $441,894 across clubs open at least a year.9 Legacy full-service big-box clubs, the most COVID-damaged segment, are squeezed by HVLP below and boutique above. A study that benchmarks a boutique studio against HVLP economics, or the reverse, is not comparing like assets.

Per-capita density and the saturation question

On the broadest establishment count, IBISWorld tallies roughly 114,370 US fitness establishments, including boutique studios, martial-arts and CrossFit affiliates, and specialty facilities, well above the roughly 41,370 commercial clubs the Health & Fitness Association counts.324 Net club counts grew only about 0.5 percent a year from 2019 to 2024, but HVLP infill is raising competitive density in suburban trade areas, and a new Planet Fitness or Crunch opening within a trade area can cap a subject's membership growth and force price cuts.2410 Saturation is a trade-area question, not a national one; clubs-per-capita and pending competitor openings within the drive-time ring are the figures that matter.

The ramp is two to three years, not day one

A new gym builds membership over two to three years to maturity, seeded by a founding-member pre-sale that establishes opening volume. Life Time explicitly distinguishes “new and ramping” centers from “mature” ones in its disclosures.8 A feasibility model that assumes stabilized membership on opening day overstates year-one cash flow and debt-service coverage; the ramp curve should be validated against the founding-member pre-sale actuals, and the working-capital reserve sized to fund the full ramp, not the stabilized run-rate.

Common Review Failures

How fitness feasibility and ramp-up forecasts fail review.

Ramp-up, churn, and breakeven are the variables a credit committee scrutinizes most, and the places fitness studies most often break. Each failure below is tied to a real mechanism or number.

  1. Day-one stabilization instead of a two-to-three-year ramp

    A new gym reaches mature membership only after two to three years, and the founding-member pre-sale, not opening week, seeds volume. Life Time separates “new and ramping” from “mature” centers for exactly this reason.8 A forecast that assumes stabilized membership on day one overstates year-one revenue and DSCR; the ramp must be validated against pre-sale actuals.

  2. Underestimating churn, the killer variable

    Churn is the single most important underwriting input and the most common error. At 66.4 percent annual retention the industry loses roughly one member in three each year and must replace them to stay flat.2 Because member lifetime value equals monthly revenue divided by monthly churn, an understated churn rate inflates LTV, revenue, and enterprise value at once. A projection using sub-3-percent monthly churn or 90-percent-plus retention without cohort evidence should be rejected.

  3. One-time CAC and the promotional-pricing trap

    Member-acquisition cost of $100 to $300 must be funded continuously against churn, not booked once, and a healthy LTV-to-CAC ratio is at least 3 to 1.19 Forecasts that assume near-zero, word-of-mouth acquisition understate ongoing cost, and deep promotional pricing to hit member counts depresses average revenue per member while attracting the highest-churn members.

  4. Members-per-location above physical and parking capacity

    The HVLP model deliberately sells more memberships than a club can hold, monetizing members who rarely attend, but breakage has a ceiling set by floor space, parking, and peak-hour capacity. Projecting members-per-location beyond that ceiling produces unachievable revenue; member complaints of overcrowding at high-volume clubs mark the limit.

  5. HVLP price competition compressing ARPM

    The value tier competes on a $10-to-$15 dues floor, and a new Planet Fitness or Crunch entering the trade area can force an independent to cut price.410 Independents lack the scale to hold pricing against franchised HVLP, so a revenue model built on today's dues without a competitive-entry stress test overstates average revenue per member.

  6. FDD Item 19 read at the average, not the 25th percentile

    Franchise Item 19 tables report EFT or royalty-base revenue, not total revenue, and averages are skewed by top performers. Planet Fitness's franchised Average Annual EFT runs $1,205,580, $1,803,265, and $2,613,753 across the bottom, middle, and upper thirds; projections should be built at the 25th percentile and benchmarked against the middle third, not the system average.5

  7. Equipment-refresh reserve and ramp working capital omitted

    Equipment is 30 to 50 percent of startup cost and requires periodic refresh, and rent should stay below roughly 15 percent of mature revenue.2021 A forecast that omits an equipment-refresh reserve, annualizes the January resolution surge of about 12 percent of annual sign-ups, or leaves working capital short of the full ramp understates capital needs and breakeven timing.20

Capital-Source Routing

Which channel funds the project, and what it requires.

Fitness routes through distinct capital sources, and each requires a different deliverable and underwriting basis. The study is built to the union of requirements across the channels actually in play, and the first question is always whether the deal is an operating gym or a net-leased fitness property.

The fitness lender matrix
Deliverable and underwriting basis by capital source. Figures are market conventions, not universal minimums.18
Capital sourceDeliverableUnderwriting basis
SBA 7(a)Going-concern feasibility; business valuation on acquisitionOwner-operator; leasehold, buildout, equipment, WC; 10% equity injection
SBA 504Real-estate appraisal on owner-occupied fitness real estate51% existing / 60% new-construction occupancy
Conventional bank / equipment financeCollateral- and cash-flow-based underwritingFaster equipment funding; harder for independents
USDA B&I (rural)Owner-operated rural-gym feasibilitySmall-town eligibility; 24-hour / Anytime Express profile
CMBS / net-lease (STNL)Income-approach on tenant credit and lease terms~6.0%–7.0% Planet Fitness NNN cap rate
Bridge / hard moneyAcquisition or buildout plan; speed to franchisor deadlineShort term, refinanced into SBA or conventional debt

Sources: SBA SOP 50 10 8; USDA Business & Industry / OneRD term sheets; InvestmentGrade.com and The Boulder Group net-lease data. See sources 13, 14, and 18.

One point governs SBA fitness lending: a gym is a legitimate and common 7(a) use, because fitness real estate is typically leased and the borrower needs financing for franchise fees, buildout, equipment, and working capital, but the owner-operator must run the gym, and change-of-ownership acquisitions require a business valuation and a going-concern appraisal. Under SOP 50 10 8, effective June 1, 2025, the SBA reinstated the Franchise Directory, so a brand (Planet Fitness, Anytime Fitness, Orangetheory, Club Pilates) must be listed for its franchisees to obtain SBA financing, and the SOP also restored a 10 percent minimum equity injection for new businesses.18 The concept-specific default history is a genuine flag, not a formality: Orangetheory showed a 76 percent SBA default rate in 2000–2016 data, and Anytime Fitness carried the highest charged-off loan total among major brands in FY2020–2023 data, against a franchise-loan default rate of roughly 9.9 percent versus about 7.5 percent for the broader SBA portfolio.151617 Boutique and newer concepts warrant conservative underwriting.

  • Owner-operated gym acquisition (change of ownership)SBA 7(a) with a business valuation and going-concern appraisal; verify the brand on the SBA Franchise Directory.
  • Ground-up or buildout with leased real estateSBA 7(a) for buildout, equipment, and working capital, sized to a two-to-three-year membership ramp.
  • Owner-occupied fitness real estateSBA 504 on the real estate, subject to the 51% existing / 60% new-construction occupancy test.
  • Franchisor equipment-refresh or upgrade deadlineEquipment financing or bridge capital, later refinanced into SBA or conventional debt.
  • Rural owner-operated gym (small-town market)USDA Business & Industry, well suited to the 24-hour / key-card (Anytime Express) profile.
  • Single-tenant net-lease fitness propertyConventional or CMBS on tenant credit and lease terms, underwritten as real estate, not the operating business.13
Study Types

Market study, feasibility study, appraisal: three questions.

These three documents answer different questions and are not substitutes. Lenders and sponsors conflate them constantly; underwriters and credit committees do not.

What each document answers, and the standard that governs it.
DocumentQuestion answeredGoverning standard
AppraisalWhat is it worth? A going-concern opinion on cash flow (EBITDA or SDE multiple), allocating value among real property or leasehold, FF&E and equipment, and the member-base intangible.USPAP
Market studyIs there demand? Trade-area demographics, competition density, health-consciousness, and penetration potential.Trade-area demand analysis
Feasibility studyWill this deal work? The market study plus membership ramp, churn, pricing, CAC, and operating economics tested against DSCR.Lender underwriting + going-concern income approach

The distinction that governs a fitness file is that an operating gym is a going concern, not passive real estate. It is a bundle of leasehold or real property, FF&E and equipment (a significant component), and business goodwill, driven by a recurring-membership subscription, and it is valued primarily through the income approach on cash flow, with the member base as the core intangible.12 A single-tenant net-leased fitness property, a Planet Fitness, Crunch, or Life Time STNL, is a fundamentally different asset, valued as real estate on tenant credit and lease terms and trading near a 6.0-to-7.0-percent cap rate, and the two must never be conflated.13 Because fitness real estate is usually leased, 7(a) going-concern appraisals dominate over 504 real-estate appraisals in the sector.

One scope boundary is worth stating. A lender will typically require a Phase I Environmental Site Assessment, but the feasibility or market-study author does not perform the Phase I or II ESA; that is a separate environmental professional's engagement, and prior site uses such as a former dry cleaner or auto-repair shop can trigger a Phase II. The feasibility work sizes the ramp, stress-tests churn and pricing, benchmarks FDD Item 19 performance, and confirms the equipment-refresh reserve and ramp working capital; it does not opine on environmental condition.

Fitness sub-segments, each with a distinct study scope

Fitness Questions

Fitness feasibility and market-study questions.

Is a gym valued as a business or as real estate?

As a going-concern business, not passive real estate. An operating gym is a bundle of leasehold or real property, FF&E and equipment, and business goodwill driven by a recurring-membership subscription, and it is valued primarily through the income approach on cash flow, using an EBITDA or SDE multiple with the member base as the core intangible. Independents trade around 1.5x to 3x SDE, multi-unit franchise platforms 4x to 7x EBITDA, and premier-brand scale operators 8x to 12x EBITDA. A single-tenant net-leased fitness property is a different asset, valued as real estate on tenant credit and lease terms near a 6.0 to 7.0 percent cap rate; the two must not be conflated.

What is the difference between a fitness market study and a feasibility study?

A market study assesses trade-area demand, meaning demographics, competition density, health-consciousness, and penetration potential, and answers whether there is demand. A feasibility study goes further, overlaying the projected membership ramp, churn and retention, pricing, member-acquisition cost, and operating economics to test whether the specific gym can service its debt under conservative, stress-tested assumptions, and answers whether the deal works for this lender. For a change-of-ownership acquisition the lender will also require a going-concern business valuation and appraisal.

Can a gym be financed with an SBA loan?

Yes. Fitness is a legitimate and common SBA 7(a) use, because gym real estate is typically leased and the borrower needs financing for franchise fees, buildout, equipment, and working capital; the owner-operator must run the gym, and SBA 504 applies where the fitness real estate is owner-occupied. Under SOP 50 10 8, effective June 1, 2025, the SBA reinstated the Franchise Directory, so the brand must be listed for franchisees to obtain SBA financing, and a 10 percent minimum equity injection was restored. Concept-specific default history is a genuine flag: Orangetheory showed a 76 percent default rate in 2000 to 2016 data, and Anytime Fitness carried the highest charged-off loan total among major brands in FY2020 to 2023 data.

Why is churn the most important fitness underwriting variable?

Because member lifetime value equals monthly revenue divided by monthly churn, so an understated churn rate inflates lifetime value, revenue, DSCR, and enterprise value simultaneously. Industry annual retention runs about 66.4 percent, implying the loss of roughly one member in three each year, half of new members quit within six months, and most are gone within ninety days. A forecast using sub-3-percent monthly churn or 90-percent-plus retention without cohort evidence should be rejected, and projections should verify an LTV to CAC ratio of at least 3 to 1.

What multiple does a fitness business sell for?

Fitness businesses trade as going concerns on cash-flow multiples. Independent traditional gyms run roughly 1.5x to 3x SDE, single-unit franchises 2.5x to 5x SDE by brand, multi-unit franchise platforms 4x to 7x EBITDA, and premier-brand scale operators 8x to 12x EBITDA. Member retention and the share of monthly recurring revenue are the largest value drivers, each capable of swinging the final price more than 20 percent. A net-leased fitness property is valued separately as real estate on tenant credit and lease terms.

Which fitness format is growing fastest?

The high-value-low-price (HVLP) budget format. HVLP operators contributed more than 42 percent of total US fitness-club growth from 2019 to 2024, and Placer.ai visit data show low-price gyms outperforming mid-tier and premium segments since early 2024. Planet Fitness, the archetype, ended 2024 with 19.7 million members and 2,722 clubs at roughly 90 percent recurring revenue, and raised its Classic membership from $10 to $15, its first increase since 1998, while still adding members. Boutique studios boomed then shook out, and legacy full-service big-box clubs are squeezed from both sides.

Is at-home or digital fitness a threat to gyms?

The threat proved overstated. Peloton's membership has declined every year since its FY2021 peak, falling to about 5.8 million by 2026, and the company is now pivoting to place equipment inside commercial gyms as at-home subscriptions decline. Consumers returned to in-person fitness, and the durable equilibrium is a hybrid model, an in-person core supplemented by digital, with the average member still visiting a facility about 1.5 times per week. A forecast that assumes at-home fitness will gut gym demand misstates the market.

By Market

Fitness feasibility studies by state.

Fitness demand, format-fit, and the competitive set are local. Explore the state markets where membership penetration, clubs-per-capita, and demographics determine whether a gym pencils.

Underwriting a gym or studio? Start with churn and the ramp.

Feasibility Study Company prepares independent Fitness & Recreation feasibility and market studies, built to the review standard your capital source applies. A methodology briefing walks through the analytical framework, the deliverable your capital source requires, and the current membership, churn, and format economics for your concept and trade area.

Request a methodology briefing
Sources

Data sources and dates.

Every figure on this page traces to a named authority. Fitness readings are point-in-time and provider-dependent; membership, churn, and revenue figures differ by basis (commercial-club survey versus establishment count, monthly versus annual churn, EFT versus total revenue), as flagged throughout.

  1. Health & Fitness Association (HFA), 2025 U.S. Health & Fitness Consumer Report: 77.0 million members in 2024 (+5.6% YoY), 24.9% penetration (an all-time high), ~96 million total customers (31% penetration), ~1.5 weekly visits, and ~$517 average annual member value.
  2. HFA / IHRSA 2025 Benchmarking Report (via Gym Marketing Pros): 66.4% annual member retention; monthly-churn bands (Excellent under 3%, Good 3–5%, Average 5–7%, High 7%+), industry overall ~5% monthly; half of new members quit within six months (Glofox and Gymdesk citing HFA).
  3. IBISWorld, 2026 (Gym, Health & Fitness Clubs in the US): $47.0 billion industry revenue in 2026 (+1.3%), 3.6% CAGR 2021–2026; ~114,370 fitness establishments (IBISWorld 2024, via Gymdesk).
  4. Planet Fitness FY2024 Annual Report (SEC) and 8-Ks (January 2025 and January 2026): 19.7 million members / 2,722 clubs (YE2024), ~20.8 million / 2,896 (YE2025), ~90% recurring revenue, Classic Card $10→$15 (2024, first increase since 1998), Black Card >60% of members; system-wide sales $4.8 billion (2024).
  5. Planet Fitness 2025 FDD, Item 19 (12 months ended December 31, 2024): franchised Average Annual EFT Revenue by third — Bottom $1,205,580 / Middle $1,803,265 / Upper $2,613,753 (2,197 clubs); corporate-owned EBITDA-after-rent margins 21% / 35% / 42% (252 clubs).
  6. Custom Market Insights, 2026: HVLP operators contributed more than 42% of total U.S. fitness-club growth 2019–2024; first-time gym users roughly half of new joiners.
  7. Placer.ai via Athletech News, 2026: visits to low-price gyms (under $30/month) outperforming mid-tier ($30–$60) and premium ($60+) segments since the start of 2024.
  8. Life Time Group Holdings 10-K and Q4 releases, 2024–2025: 189 centers (YE2025), average revenue per center membership $3,531 (2025), $3,160 (2024), $2,810 (2023); 2024 revenue +18.2% to $2.62 billion, Adjusted EBITDA $676.8 million; ~94,000 sq ft 2026 club class; "new and ramping" versus "mature" center disclosure and seasonal Q3→Q4 membership decline.
  9. Anytime Fitness 2024 FDD and franchise disclosures: average unit volume $441,894 (1,530 clubs open ≥1 year), flat $799/month royalty; 5,500+ clubs globally, ~2,328 U.S. clubs (September 2025).
  10. Crunch Fitness via Athletech News (2024) and CoStar via Athletech News (2026): 450+ clubs and 2.5 million+ members; ~4.27 million sq ft of leases signed in 2025 (up ~50% YoY) and 91 clubs added.
  11. Market.us, 2024: global boutique-fitness-studio market valued at $40.1 billion (2024).
  12. CT Acquisitions, 2026: going-concern multiples — 1.5x–3x SDE (independents), 2.5x–5x SDE (single-unit franchise), 4x–7x EBITDA (multi-unit franchise platforms), 8x–12x EBITDA (premier-brand scale operators); retention and MRR mix each can swing final price 20%+.
  13. InvestmentGrade.com, 2024: single-tenant Planet Fitness NNN cap rates 6.0%–7.0% (below-investment-grade BB/Ba3 credit, franchise-guarantee complexity, $2.5–$5.0 million typical pricing, 15-year initial terms).
  14. The Boulder Group, October 2024 (Q3 2024 Net Lease Research) and Boulder Group / REJournals, 2025–2026: single-tenant net-lease retail cap rate ~6.5% (Q3 2024), ~6.79%–6.80% blended by mid-2025 / Q1 2026.
  15. sba7a.loans: Orangetheory Fitness 76.47% SBA loan default rate (2000–2016 data), ranking as the 6th-worst franchise.
  16. FitSmallBusiness (FY2020–2023 SBA data): Anytime Fitness carried the highest reported default rate and the highest total charged-off loans among major brands with more than 25 SBA loans; a separate 217-loan / ~$39 million sample put its failure rate at ~7.83%.
  17. Ronnel Enterprises, "Franchise Failure Rates: What the Data Actually Shows": SBA franchise loans defaulted at ~9.9% (2010–2021) versus ~7.5% across the broader SBA portfolio; gym memberships "among the first expenses consumers cut when budgets tighten."
  18. U.S. Small Business Administration, SOP 50 10 8 (effective June 1, 2025): SBA Franchise Directory reinstated; 10% minimum equity injection for new businesses; owner-occupancy tests (51% existing / 60% new construction); streamlined 504 environmental review (Taft Law / Starfield & Smith, 2025).
  19. Financial Models Lab, 2026, and arvo.guru, 2025: member-acquisition cost $100–$300; a healthy LTV:CAC ratio of 3:1 or higher.
  20. Gymdesk, 2024, and StartCosts, 2026: ~12% of annual sign-ups occur in January; keep rent below ~15% of revenue; equipment 30–50% of startup cost with a periodic refresh cycle.
  21. Sharpsheets, 2024, and MMCG, 2024: 22.7% average EBITDA margin among the largest franchises; ~11% sector net margin; ~6.7% net margin for yoga/Pilates studios (IBISWorld via MMCG).
  22. Xponential Fitness disclosures and reporting (2023–2025): eleven brands narrowed to five; ~$39.75 million in FTC and franchisee-litigation settlements; stock down ~74% peak-to-trough. Illustrative of boutique trend-fatigue and Item 19 reliability risk.
  23. Peloton disclosures via Backlinko (2026) and Fitt Insider (2025): membership declining every year since the FY2021 peak, ~5.8 million by 2026 (~97% off its all-time high); now placing equipment inside commercial gyms.
  24. MMCG database, 2024: ~41,370 U.S. commercial clubs at the 2019 peak, ~17% club-count drop in 2020, and ~0.5% CAGR 2019–2024; Gen Z ~73% / Millennial ~72% participation; regional obesity (~35%) and low-access reads. Proprietary single-provider; treated as indicative.
  25. Empower Personal Dashboard, "Americans to spend $60 billion on fitness in 2026": 23% of Americans would cut fitness/exercise spending versus 44% for dining out and 36% for travel. (Ronnel Enterprises offers the countervailing "first to be cut" characterization; treat fitness as durable-but-discretionary and stress a demand shock.)
  26. COVID-era bankruptcies and consolidation: Gold's Gym (Chapter 11, May 2020; RSG Group acquisition ~$100 million), 24 Hour Fitness (June 2020, 144 permanent closures), Town Sports / New York Sports Club (September 2020), and Blink Fitness (August 2024); the April 2024 Orangetheory / Self Esteem Brands merger into Purpose Brands (7,000+ locations, ~$3.5 billion system-wide sales), per Forbes/PYMNTS, CBS News, CNBC, and Ainvest (2020–2025).