The decision to sell your gym can feel like a crushing weight. For your clients, it’s more than just a gym; it’s a place of transformation, challenge, and community. For you, it’s the result of years of dedication, long hours, and personal sacrifice. Whether you’re stepping into a new chapter or preparing for a well-deserved retirement, parting with your gym is as emotional as it is strategic.
Let us at Sigma Mergers and Acquisitions do the heavy lifting by giving you the ultimate guide on how to sell your gym. Our team understands the unique challenges that come with selling a gym, from valuating specialized equipment to transferring memberships and retaining staff. Our comprehensive guide will give you everything you need to know, transforming a tough decision into a rewarding opportunity.
What Makes This Industry Unique
Gyms and fitness centers are not going away anytime soon. The COVID-19 pandemic hit this industry hard in 2020, as gyms were among the first businesses to be forced to shut down. This meant months without revenue while still having to cover various overhead costs, such as building rent and equipment leases. As a result, about 25% of gyms in the United States permanently closed during this time.
However, despite the setbacks, the industry recovered remarkably. While the pandemic did bring hard times, it also completely changed the way people get their sweat in. Meditative exercise (such as yoga), HIIT training, small group exercise classes, functional fitness, and hybrid (in person and virtual) classes have all surged in popularity in the fitness world. Gyms who embrace these trends early will have an easier time retaining members while being more appealing to potential buyers.
Another trend that has popped up post-COVID is home workouts. However, this has had a minimal impact on gym attendance. Many individuals lack the space or budget for a full home gym, so they eventually opt for a gym facility.
Additionally, many gyms offer membership contracts, which provide predictable revenue streams. This steady income is highly attractive to buyers. Some facilities even charge annual maintenance or enhancement fees, which help cover equipment upgrades and facility improvements, further boosting the gym’s value in the eyes of investors.
One potential drawback for some buyers is the challenge of running a gym without hands-on ownership. Gyms managed by absentee owners often struggle to match the performance of owner-operated facilities. Without direct oversight, it’s harder to maintain member engagement, ensure staff accountability, and uphold the overall culture that keeps clients coming back. These are all factors that directly impact the company’s profitability. For this reason, the ideal buyer for your gym will likely be someone who’s not just financially invested, but also willing to be actively involved in the day-to-day operations.
The Industry’s Financial Outlook
Apart from the sharp decline in 2020 caused by the COVID-19 pandemic, the gym industry continues to thrive. From 2020 to 2025, this sector’s revenue grew at an average annual rate of 7.1%. While much of this growth reflects a rebound from pandemic-related losses, it also highlights the industry’s ability to adapt and bounce back. Looking ahead, experts predict that the industry will continue steady growth at a 1.4% rate over the next five years.
When it comes to operations, the two most significant expenses for a gym are payroll and rent. Industry experts recommend that payroll should not exceed 40% of gross sales, and rent should not be greater than 33% of gross sales. Keeping these expenses in check is key to maintaining profitability and long-term sustainability.
Ideally, about two-thirds of a gym’s gross revenue should come from recurring membership dues. The remaining one-third can be generated through secondary income streams such as fitness class enrollments, retail sales of exercise-related products, maintenance or enhancement fees, and special events. If the revenue balance skews heavily away from memberships, it could be a sign of pricing inefficiencies within your business.
June 2025 Financial Benchmarks
According to the Business Reference Guide, a trusted resource for business brokers and M&A firms, these are the latest financial benchmarks for the gym industry, as of June 2025. Understanding these numbers is essential when evaluating the performance of your business ahead of a sale.
Average SBA Loan Amount
The average SBA loan amount for a gym business currently sits at. This is slightly higher than the overall average 7(a) loan amount, which is $436,270. Gyms generally have significant overhead costs, including a wide variety of commercial fitness equipment. These added expenses tend to push SBA loan amounts higher than other service-based businesses with less overhead costs.
Average SBA Down Payment Percentage
In most cases, SBA lenders require a higher down payment on gym acquisitions than the required 10% (thanks to the newest set of SBA Standard Operating Procedures). On average, buyers put down 60%. This is primarily due to the perceived risk that a gym carries. Fitness equipment depreciates in value quickly, so gyms often have very little collateral to back the loan. Therefore, banks compensate with a larger down payment.
Average Days to Sell
Gyms tend to stay on the market longer than other types of businesses, averaging 297 days to make a sale. The current average for all businesses is 168. This could be due to two factors: reliance on the owner’s presence and location security.
Many gyms, especially small, independent facilities, thrive due to a hands-on owner who is involved in member relations, programming, and daily operations. Absentee owner businesses are wildly popular now and are what many buyers are searching for. Buyers may hesitate to move forward if they feel the gym depends too heavily on the current owner’s involvement.
Secondly, location security is a common concern that slows down deals when selling a gym business. A lot of gyms don’t own their building; they lease it. Coupled with the fact that moving facilities is a hassle with extra labor and costs, buyers might back out of the lease is expiring, non-transferable, or if the landlord is just difficult to work with.
Average Non-Compete Length
Non-compete agreements are essential to consider when selling your gym business, especially if you plan on starting another business after the deal is done. Non-compete agreements are designed to protect your business after the deal has closed by preventing you to start a similar business immediately. Instead, you must allow a set amount of time
In gym acquisitions, the average non-compete length for gym acquisitions is 45 days. For most other business sales, this period typically ranges from 1 to 5 years.
Level of Competition
Gyms have a moderately high level of competition due to high saturation. Whether it’s a big-box gym (such as Planet Fitness, HOTWORX, or Gold’s Gym) or an independent club, urban and suburban markets often have multiple gyms in relatively close proximity. Many of these facilities also offer similar equipment and membership benefits, so it can be difficult to stand out. Often, those seeking to join a gym go with the cheapest membership price.
Furthermore, the fitness industry as a whole is known for high cancellation rates. It’s no secret that many new members struggle with the lifestyle change, and thus, end up cancelling their membership shortly after signing up. To combat this, gyms must retain and attract new members with constant marketing incentives. This adds to the competitive pressure.
Amount of Risk
Independent gyms have a significantly higher chance of failure compared to their big-box counterparts. As aforementioned, price competition is a huge challenge. Large gym franchises benefit from economies of scale that allow them to offer low monthly memberships, often as little as $10 per month. Many independent gyms simply cannot match this without bleeding money.
Additionally, many cost-conscious and convenience-driven consumers opt for franchise gyms for the wide range of amenities they offer. These include 24/7 access, updated equipment, group fitness classes, national membership options, tanning, and recovery enhancements. Independent gyms often have far fewer resources, so they struggle to offer similar amenities.
As a result, independent gyms are often gradually pushed out of the market, making them a riskier investment for prospective buyers. Therefore, facilities that have adopted a strategic approach present a high-upside opportunity that is more likely to attract buyers.
Valuation Using Market Approach
When it comes to determining the value of your gym business, many business brokers and M&A firms opt for the market approach. This method assesses your gym’s financial performance and applies industry-specific multiples based on the recent sales of similar businesses.
While your business broker or M&A advisor can provide a comprehensive and tailored valuation for your business, you can use the following formulas to get a rough estimate before you embark on your sales journey.
6 Steps to Successfully Sell Your Gym
Selling your gym can feel like an overwhelming process. To simplify the process, our experts at Sigma Mergers and Acquisitions have broken it down into 6 comprehensive steps.
- Hire a Business Broker/M&A Firm
- Prepare Legal and Financial Documents
- Market Your Company Confidently
- Start Negotiations
- Complete Due Diligence
- Close the Sale
1. Hire a Business Broker/M&A Firm
The first step in selling your gym business should be consulting with a professional, whether a business broker or an M&A firm. These experts have valuable insight into the intricacies of selling a business and can provide strategic guidance to maximize your chances of a successful sale. They’ll help you navigate everything from valuation and marketing to negotiations and closing.
While a business broker and an M&A firm offer similar services, it’s important to know the key difference between the two. Business brokers generally sell small businesses that bring in less than $1 million in annual revenue. In contrast, M&A firms (like ours) work with medium-to-large-sized businesses to close more complex deals. Choosing the right partner depends on the size and complexity of your operation.
2. Prepare Legal and Financial Documents
Once you’ve hired a trusted business broker or M&A firm, your next priority should be organizing your legal and financial documents. Disorganized records can lead to lower valuations and create major obstacles during due diligence, which can delay or even derail a deal entirely.
To maximize your gym’s value and improve buyer confidence, ensure that your key documents like tax returns, P&L sheets, employee agreements, lease contracts, permits, and other operational records are clear, complete, and readily accessible.
3. Market Your Company Confidently
With your documents in order, the focus shifts to marketing your company to potential buyers. Your business broker/M&A advisor should drive this effort. They’ll implement a variety of proven marketing strategies, including leveraging their internal buyer database, industry contacts, and specialized online platforms designed for business sales.
Confidentiality is critical on your end. If news of the sale leaks too early, it could lead to employee turnover or client loss; both of which can significantly reduce your gym’s value. To prevent this, your broker or M&A advisor will require interested buyers to sign a non-disclosure agreement (NDA) before sharing any sensitive information. Once the NDA is in place, qualified buyers will receive the Confidential Information Memorandum (CIM) and the owner’s interview.
4. Start Negotiations
When a serious buyer is ready to move forward, they’ll submit a Letter of Intent (LOI). This will officially begin the negotiation process and establish the right of first refusal. The LOI will outline proposed terms of the purchase, including price, payment structure, and timeline. This may require several rounds of revisions.
Once both parties agree on terms, you will sign the letter and give the buyer the exclusive right to continue in the purchasing process. The LOI will act as the first draft for the purchase agreement.
5. Complete Due Diligence
Now, the due diligence process begins. This process allows the interested buyer to take a deep dive into all aspects of the company, from financial performance to day-to-day operations. If you’ve already cleaned up your legal and financial documentation, this process should be relatively straightforward. To ensure you’re well-prepared, your business broker or M&A advisor will give you a personalized list of what documents you should be prepared to present. However, the buyer can request additional documents. In general, you will likely need:
- Building lease agreement
- Equipment lease agreements
- Last 3-5 years of tax returns, P&L statements, and cash flow statements
- Business licenses
- Loan and debt documentation
- Employee contracts
- Membership contracts
- Standard operating procedures
- Inventory lists
6. Close the Sale
After due diligence is completed, it’s finally time to close the sale and enjoy the rewards of your hard work. Ownership will officially be transferred to the buyer, and the funds will be distributed according to whatever terms you agreed upon. After fulfilling any transitional support commitments, you are free move on to your next adventure, whether it’s starting a new business or enjoying a well-deserved retirement.
See also: What to Do After You Sell Your Business – Sigma | Blog
Start Your Sales Journey with a No-Obligation Business Valuation
Selling your gym business can be both a daunting and rewarding journey. Navigating today’s complex market can feel almost impossible, but you don’t have to do it alone. At Sigma Mergers and Acquisitions, we can help you take the first step with a pressure-free business valuation.
Our Dallas business brokers and M&A advisors work with a wide range of industries. If you’re considering selling, we offer accurate business valuations in all 50 states and comprehensive sell-side services in 34 states for gym businesses that generate at least $1 million in revenue. We also offer buy-side services nationwide. Our experienced team is ready to discuss how we can support you as your trusted M&A firm.
With our proven Sigma DealMap™ process, we will guide you through every step of the sale with confidence and clarity, working to secure the maximum value for your gym business. When you’re ready to sell, trust Sigma Mergers and Acquisitions to deliver results that meet your goals and exceed your expectations.
