Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.

👨‍💼 Owner Role + Instructor Labor

• Does the owner teach the majority of classes?
• Are certified instructors employed and fairly compensated?
• Has owner labor been normalized?
• Are teaching roles documented or informal?

🏷️ Revenue Model + Seasonality

• Is revenue based on memberships, class packs, or drop-ins?
• Are revenue spikes linked to promotions (e.g., New Year’s)?
• Are seasonal dips accounted for?
• Is client retention and churn tracked?

📊 CapEx + Facility Investment

• Are mirrors, mats, reformers, or flooring included in CapEx?
• Are leasehold improvements included in the value?
• Has replacement CapEx been normalized?
• Are any equipment items personally owned?

📄 Staffing + Payroll Normalization

• Are instructors paid via barter, discounts, or below-market wages?
• Are staff roles clearly documented?
• Are family payroll or lifestyle perks excluded from cash flow?
• Are admin or scheduling roles covered in labor assumptions?

🚩 Red Flags

• Owner teaches all or most classes with no succession plan
• Instructor pay under market or trade-based
• Addbacks include wellness, gear, or family memberships
• No adjustment for seasonality or promotional spikes

📌 SBA SOP Tip

Fitness studios must reflect labor normalization, seasonality smoothing, and infrastructure investment. Valuations should separate personal brand value from sustainable, transferable business operations.