Buying a Gym Is More Than Just Signing a Check
If you’re considering buying a gym, congratulations! yYu’re about to step into a business with built-in members, brand recognition, and community. But don’t let the excitement blind you to the legal process. Gym purchases involve specific steps, critical documents, and strict timelines. Miss a piece, and you could end up with unexpected debt, hidden liabilities, or a deal that falls apart.
This guide walks you through what to expect, from your first offer to the day you hold the keys.
Step 1: Letter of Intent (LOI)
The process usually starts with a Letter of Intent (LOI).
- What it is: A non-binding document outlining the basic terms you and the seller agree to explore.
- What’s included:
- Purchase price (or range)
- Payment structure (cash, financing, seller financing)
- Assets included/excluded (equipment, member lists, branding)
- Conditions necessary for you to feel confident closing the deal
- Timeline for due diligence and closing
- Why it matters: Sets expectations, prevents wasted time, and opens the door to deeper review.
Think of the LOI as your “dating phase” before the legal marriage of contracts.
Step 2: Due Diligence
Once the LOI is signed, it’s time to lift the hood and inspect the engine. Due diligence is your opportunity to verify that the gym is worth what you’re paying.
What to Review
- Financials: Profit and loss statements, tax returns, membership numbers, do a valuation.
- Contracts: Membership agreements, vendor contracts, leases.
- Staff: Employee vs. independent contractor status, payroll records.
- Legal Liabilities: Pending lawsuits, liens, or unpaid taxes.
- Assets: Equipment condition, intellectual property, trademarks.
Red Flags
- Inflated membership numbers.
- Old or broken equipment.
- A lease that’s about to expire – or worse, unfavorable renewal terms.
- Workers misclassified as 1099s when they should be W-2s.
Due diligence is where deals are won or lost. Never skip it.
Step 3: The Purchase Agreement
Once due diligence checks out, the attorneys draft the purchase agreement. This is the legally binding contract that seals the deal.
What’s Inside
- Purchase Price & Payment Terms
- Representations and Warranties (what the seller promises is true)
- Assets vs. Stock Sale (are you buying the business’s assets or the company itself?)
- Non-Compete Clauses (preventing the seller from opening a competing gym down the street)
- Closing Conditions (everything that must happen before the deal closes)
This is the document you don’t want to skim. Every clause matters.
Step 4: Closing
Closing is the finish line. Funds are transferred, documents are signed, and ownership officially changes hands. Depending on the deal, you may:
- Take over immediately.
- Allow for a transition period where the seller helps with the handoff.
- Assume existing contracts (lease, vendor agreements, staff).
Once closing is done, congratulations – you own the gym. But remember: how smooth this process goes depends entirely on how well you prepared in the earlier steps.
The Timeline for Buying a Gym
Every deal is unique, but here’s a typical timeline:
- Initial Discussions & LOI: 2 – 4 weeks
- Due Diligence: 30 – 60 days
- Drafting & Negotiating Purchase Agreement: 2 – 4 weeks
- Closing: 1 – 2 weeks after agreement is finalized
On average, buying a gym takes 2 – 4 months from first conversation to final signature.
Asset Sale vs. Stock Sale: What’s the Difference?
- Asset Sale: You’re buying specific assets (equipment, brand, member list) but not the seller’s liabilities. This is most common for gyms.
- Stock Sale: You’re buying the ownership interest in the company itself. This includes debts, contracts, and obligations.
The type of sale dramatically impacts your liability and taxes, so don’t assume—know which one you’re signing.
Common Mistakes Buyers Make
- Skipping Due Diligence
Taking the seller’s word without verifying financials or contracts. - Not Reviewing Leases
The lease is often worth more than the equipment. Don’t get stuck with unfavorable terms. - DIY Purchase Agreements
A template pulled from the internet won’t cover gym-specific risks. - Overestimating Value
Just because a gym has members doesn’t mean it’s profitable. Always verify with a proper valuation.
Self-Check: Are You Ready to Buy a Gym?
- Do you know the difference between an LOI and a purchase agreement?
- Have you planned time (and budget) for due diligence?
- Do you understand whether your deal is an asset or stock sale?
- Do you have a legal team that understands gyms?
If you answered “no” to any of these, you’re not ready to sign.
A Gym Is More Than Just Equipment
Buying a gym is one of the fastest ways to step into the fitness industry or expand your footprint—but it’s also one of the riskiest if you skip steps. With the right documents, clear timelines, and a strong legal team, you can make sure your purchase sets you up for long-term success.
Don’t just buy a gym. Buy it the right way.
Ready to start the process of buying a gym? Schedule a legal consultation today.
