SBA 7(a) Fitness Center Feasibility Study in Minnesota

Minnesota gyms: franchised and mostly Hennepin

Franchising defines Minnesota fitness centres under 7(a): 51.4% of the loans went to branded units. The file for FY2017 to FY2026 holds 327 loans worth $101.5 million. The median is $150,000, which is 0.61x the figure for gyms elsewhere, and the central half spans $57,500 to $375,500. Minnesota is thirteenth among states on the count, and in Minnesota's own ranking of 39 classes, fitness takes the third slot. Hennepin County alone has 116 loans, then Dakota with 45, Washington with 26, Anoka with 24 and Ramsey with 17.

Lenders and the rest of the state

Minnesota's table opens with The Huntington National Bank at 36 loans and $12.5 million, Old National Bank (28 loans, $15.3 million), then U.S. Bank, National Association (21, $2.7 million), Choice Financial Group (18, $7.5 million) and Minnwest Bank (13, $5.1 million). The figures show portfolios only and say nothing about how those banks lend. Beyond the Twin Cities, Stearns has 12 loans, Blue Earth and Wright 10 each, Carver 9 and Beltrami 8, which shows a thin but real spread across St. Cloud, Mankato and the north. Approvals fell from 53 in FY2017 to 19 in FY2022 and ran at 32 in FY2026.

A moderate loss record

Cancellation after approval is at least 7.3% for FY2017 to FY2024, but 9.2% counting undisbursed loans as cancelled, a gap that suggests approvals were still waiting to fund. Among the 159 loans disbursed in FY2017 to FY2021, 6.3% are charged off to date and 2.5% inside five years of approval. Neither number is final. These figures are better than those seen for gyms in some larger states, though a gap between the early and the later measure shows that trouble arrives after the first years.

What a Minnesota fitness study has to test

With more than half of loans franchised, the study must model the franchise agreement fully: the initial fee, the royalty and marketing fund, the equipment package and the territory. Cold months may help indoor exercise, but the study should test whether existing gyms in the Twin Cities already capture that edge. Member counts, dues, churn and the share who join in the first quarter drive revenue, and the study should show a slow ramp. A loan around $150,000 covers a typical build-out, and anything toward $375,500 needs support. Repayment should survive membership below the system average, and a lender will weigh how much cash the owner puts in.