Fitness Center Feasibility Study in the Houston-Pasadena-The Woodlands, TX Metro Area

A franchise-heavy fitness market

In Houston-Pasadena-The Woodlands, TX Metro Area, fitness centers drew 371 SBA loans between FY2017 and FY2026, worth $205.2 million. Nationally the area is 5 of 608 for the class, while fitness is 4 of 39 across Houston classes. A location quotient of 1.48x shows fitness lending is more concentrated here than nationally. The franchise share is 64.7%, so franchised concepts are most of the class here.

The median loan is $349,000, 1.35x the class figure nationally; its quartiles are $150,000 and $598,000. A franchised studio brings a franchisor's build-out budget and royalty structure, so the study has to model the franchise agreement's costs in the coverage ratio rather than treating the loan as a generic gym start-up. Harris County leads with 185 loans, then Fort Bend with 70, Montgomery with 55, and Brazoria and Galveston with 26 each.

Programs and holders

Of the 371 loans, 347 were 7(a) and 24 were 504. Bank holders: The Huntington National Bank (58 loans, $14.9 million); Wells Fargo Bank National Association (23 loans, $10.2 million); Zions Bancorporation, National Association (21 loans, $11.1 million); Simmons Bank (21 loans, $6.4 million); Citizens Bank (TN) (14 loans, $7.1 million). Capital Certified Development Corporation holds the 504 loans listed, 10 of them worth $16.9 million.

Each holder row reflects loans that lender holds or held in the Houston area, a description of past activity that makes no promise about any future request.

The loss history is the sharp edge

Charge-off to date is at least 17.7% for FY2017 to FY2021 disbursed loans in a cohort of 147, and at least 8.8% of the cohort went that way inside five years of approval. That is a heavy floor. Cancellation after approval is at least 9.7%, with the undisbursed-as-cancelled ceiling withheld. A study should supply evidence of membership retention to set beside these floors.

The study should test the member base the trade area can support, the competing studios within the drive time, the lease and build-out cost, the franchise fee burden, and the coverage ratio around a $349,000 request. The gym total of 371 draws on Harris, Fort Bend and Montgomery projects whose county names were read against the July 2023 delineation; any gym with a county that did not match is outside every metro, so this is a minimum.