Fitness Center Feasibility Study in Tennessee

Tennessee gyms: a leading class with a larger ticket

Fitness centers are among the most financed businesses in Tennessee, and Tennessee gym loans run bigger than gym loans elsewhere. The median Tennessee gym loan was $348,500, 1.34x the median for fitness centers nationwide, and Tennessee's median clears our distinctness margin on both tests, against the state's lending in every class and against gyms across the country. It leads this page. Gyms rank 3 of 39 among Tennessee classes, and a location quotient of 1.60x shows they are heavily overweight in Tennessee's SBA mix, although the state itself ranks 23 of 54. Tennessee approved 205 gym loans worth $95.7 million from FY2017 to FY2026; Tennessee's middle half ran from $150,000 up to $533,600.

This is a franchise market. Franchised gyms account for 61.5% of Tennessee approvals, and SBA 7(a) carried 202 loans against 3 under SBA 504, so most are likely leased spaces financed for build-out and equipment rather than buildings. The Huntington National Bank holds 37 Tennessee gym loans worth $9.2 million, while Pinnacle Bank holds 20 worth $15.5 million, the larger deals; U.S. Bank, National Association holds 12, Old National Bank 10 and Citizens Bank 7. Davidson County leads with 54 approvals, ahead of Shelby with 26, Williamson with 22 and Hamilton with 20. Annual Tennessee approvals climbed from 15 in FY2017 to 30 in FY2025, and FY2024 brought $18.2 million on 23 loans.

Cancellations and losses on Tennessee gyms

Tennessee cancelled at least 6.6% of its FY2017 to FY2024 gym approvals, and 8.6% at the ceiling with undisbursed loans counted. Losses run at the same floor: 6.6% of the 76 Tennessee gyms funded in FY2017 to FY2021 have since gone to charge-off, 3.9% of the cohort before year five, so losses have continued past the opening years. Both figures can rise.

What a Tennessee fitness study must prove

A study for a Tennessee gym has to justify a ticket above the national norm in a market already full of franchise units. Demand testing means population, income and the count of competing gyms and studios within a short drive, with Davidson and Williamson, where many of the loans sit, read separately from Robertson or Sevier. With a franchised unit, Tennessee demand work should test the system's membership ramp and attrition against this specific trade area rather than repeat the brand's averages. Cost testing covers build-out, equipment and the lease. Debt service coverage must hold through the membership ramp and later, with a loan near $533,600 stressed harder than one at the $348,500 median. Since SBA 504 funded only 3 Tennessee gyms, real estate rarely backs these loans; the lender's comfort comes from the franchise agreement, the lease term and the owner's equity.