Scaling Brings Opportunity—and Risk
Setting up a holding company for gyms is one of the smartest moves multi-location gym owners can make when scaling their business. It means your brand is strong, your community is loyal, and your systems are working. But with growth comes greater risk. Each new lease, member waiver, and employee adds another layer of liability.
If you’re still operating multiple gyms under a single LLC or S-Corp, you’re leaving all your assets exposed to the fallout of one lawsuit, lease default, or injury claim. That’s where multi-entity structures (using holding companies and subsidiaries) come into play.
In this post, we’ll break down how they work, why they matter, and how gym owners can use them to build real wealth (not just another job).
What Is a Multi-Entity Structure?
A multi-entity structure is exactly what it sounds like: instead of one business entity holding all your gyms, you create multiple entities that work together.
The most common setup for gym owners is:
- Holding Company (Parent): Owns the brand, intellectual property, and sometimes real estate.
- Subsidiary Entities (Children): Each gym location operates as its own LLC or corporation under the parent company.
This structure creates a legal shield between each location, so if one gets into trouble, the others aren’t automatically dragged down.
Why Every Multi-Location Gym Should Consider It
1. Asset Protection
Imagine one gym has a slip-and-fall lawsuit. Without separation, all your locations (and your personal wealth) are on the line. With a multi-entity structure, liability is contained to the specific subsidiary.
2. Scalable Growth
Adding new locations becomes plug-and-play. You don’t have to rework your entire business; you simply spin up a new subsidiary under the holding company.
3. Tax Flexibility
Each subsidiary can be structured for maximum tax efficiency. You can centralize certain expenses (like payroll or marketing) at the holding company while keeping operational costs at each location.
4. Cleaner Exit Strategy
When the day comes to sell, a buyer can purchase one location—or all—without touching the rest. This keeps valuations clear and makes your business more attractive to investors.
Holding Company 101
A holding company doesn’t operate your gyms day-to-day. Instead, it:
- Owns the brand name, logo, and intellectual property.
- Holds trademarks, your website, and even key contracts.
- May own real estate, leasing it back to each subsidiary.
Think of it as your umbrella of protection. By separating ownership of key assets from operations, you make it harder for creditors or plaintiffs to touch the most valuable parts of your business.
Subsidiaries: Each Gym Stands Alone
Each subsidiary is its own entity (often an LLC), responsible for:
- Running daily operations.
- Employing staff.
- Signing the lease.
- Assuming liability for its own members and activities.
If one gym has a problem, only that entity is affected. The holding company and other subsidiaries remain insulated.
Real-World Example
Let’s say you own Peak Performance Fitness, a three-location gym chain.
- Peak Holdings LLC owns the brand, website, and IP.
- Peak Downtown LLC, Peak Westside LLC, and Peak Eastside LLC each run their own gyms.
- The holding company owns the building for the Westside location and leases it back to Peak Westside LLC.
If a member sues Peak Eastside LLC, that lawsuit doesn’t touch your other gyms, your building, or your trademarks.
Common Mistakes Gym Owners Make
- Keeping everything under one LLC.
This leaves all locations exposed to a single claim. - Failing to keep entities separate.
If you “commingle” funds or blur lines between companies, courts can pierce the corporate veil. - Overcomplicating too soon.
A multi-entity structure is powerful, but it’s not always necessary for a single gym location. - DIY entity formation.
Templates from the internet don’t account for gym-specific liability or state laws.
When to Consider a Multi-Entity Structure
- You’re opening a second or third location.
- You’re purchasing real estate for your gym.
- You’re creating multiple revenue streams (yoga, CrossFit, MMA, Pilates) under one brand.
- You’re thinking about selling one gym but keeping others.
If any of these apply, it’s time to start thinking like a business owner – not just a gym owner.
Self-Check: Is Your Gym Protected?
- Do all your locations run under one LLC?
- Do you own real estate through the same entity as your operations?
- Would a lawsuit at one gym threaten everything else you’ve built?
If you answered “yes” to any of these, you’re operating with unnecessary risk.
Next Steps for Gym Owners (ahem… YOU!)
A multi-entity structure isn’t something you want to guess at. It needs to be tailored to your goals, state laws, and exit strategy.
The right attorney can:
- Set up holding companies and subsidiaries.
- Ensure proper separation to avoid veil-piercing.
- Align your legal structure with your long-term wealth plan.
Build to Last, Build to Sell
Running multiple gyms under one umbrella might feel simple, but it’s exposing you to unnecessary risk. By using a holding company and subsidiaries, you protect your assets, create scalable growth, and set yourself up for a cleaner, more profitable exit.
It’s not just about protecting what you’ve built, it’s about ensuring your gym business creates lasting wealth for you and your family.
Thinking about scaling to multiple locations? Learn how to protect each one.
