Letter of Intent Template for Buying a CrossFit or Functional Fitness Gym

Parties and Transaction Overview

Identifies the buyer entity, seller entity, and the target business, and confirms the intended structure of the transaction — nearly always an asset purchase in gym acquisitions to avoid assuming unknown liabilities and to allow the buyer to step fresh into the CrossFit affiliate agreement.

💡 Sellers occasionally push for a stock sale to achieve capital gains tax treatment, but buyers of CrossFit gyms should almost always insist on an asset purchase to avoid inheriting undisclosed liabilities, tax obligations, or unresolved member disputes. Confirm early whether the CrossFit affiliate agreement can be assigned or whether the buyer must apply for a new affiliate license — this affects timing and deal certainty significantly.

Purchase Price and Valuation Basis

States the proposed purchase price, the SDE or EBITDA multiple being applied, and how the price was calculated based on the gym's trailing twelve months or trailing twenty-four months of financial performance.

💡 CrossFit gym valuation multiples typically fall between 2.5x and 4.0x SDE depending on membership retention rates, lease quality, staff depth, and revenue diversification. Anchor the offer to verified SDE — not gross revenue — and make clear the price is subject to downward adjustment if due diligence reveals material discrepancies in membership numbers, unreported cash revenue, or deferred equipment maintenance costs. If the seller's financials are informal or commingled, negotiate a wider due diligence window before committing to a firm price.

Deal Structure and Financing

Outlines how the purchase price will be funded, including the proposed SBA 7(a) loan amount, buyer equity injection, seller note terms, and any earnout component tied to post-close membership performance.

💡 Earnouts are highly advisable in CrossFit acquisitions because the value of the business is heavily tied to membership retention, which is vulnerable to owner departure. Sellers will resist large earnout components — frame it as downside protection rather than a discount. Tie the earnout specifically to active paying member headcount, not gross revenue, to prevent manipulation. Confirm with your SBA lender early whether the seller note structure is compliant — SBA lenders have specific rules about seller note standby periods that affect deal terms.

Due Diligence Period and Access

Defines the length of the due diligence period, the information Buyer requires access to, and the conditions under which Buyer may terminate the LOI without penalty during this window.

💡 Forty-five to sixty days is appropriate for a CrossFit gym acquisition because validating membership data, reviewing the lease, and getting lender approval all run concurrently. Push for access to the gym's member management software (Wodify, PushPress, or similar) directly — don't rely solely on seller-prepared summaries. Churn data is the most frequently misrepresented metric in boutique fitness acquisitions. Request raw export data, not screenshots. If the seller resists, treat it as a red flag.

Exclusivity and No-Shop Provision

Grants Buyer an exclusive negotiating window during which Seller agrees not to solicit, entertain, or enter into negotiations with other prospective buyers.

💡 Exclusivity is non-negotiable from a buyer's perspective once the LOI is signed — you are about to spend significant time, legal fees, and lender costs on due diligence. Sellers of CrossFit gyms who are hesitant to grant exclusivity are often still testing the market or entertaining multiple buyers simultaneously. A 45–60 day exclusivity window is standard; anything shorter creates pressure to rush due diligence on a business where membership verification and lease review cannot be shortcut.

Transition and Seller Cooperation

Establishes the seller's obligation to support the transition of the business to the buyer, including a coaching transition period, introduction to key members and staff, and handoff of programming and operational systems.

💡 This section is often more important in CrossFit acquisitions than in any other small business category because members have personal loyalty to the founder-coach. A seller who disappears at closing is a material risk to membership retention and earnout thresholds. Negotiate a minimum 90-day transition, with the seller maintaining a visible but reduced coaching presence. Ensure transition compensation is modest enough to not inflate post-close costs and is clearly scoped to avoid ambiguity about the seller's role.

Confidentiality

Requires both parties to maintain strict confidentiality about the transaction, the gym's financial information, and the existence of the LOI to protect member and staff relationships during the acquisition process.

💡 Confidentiality is especially critical in CrossFit gym acquisitions. If members learn the gym is for sale before a transition plan is in place, churn can accelerate materially — undermining the very membership numbers that support the purchase price. Sellers must understand that discretion protects their earnout. Staff confidentiality is equally important: key coaches who learn the gym is being sold may begin job hunting or leave, which is a compounding risk given coach-dependent member retention.

Non-Binding Nature and Governing Law

Clarifies which provisions of the LOI are legally binding and which are expressions of intent, and establishes governing law for any disputes arising from the LOI itself.

💡 Always make the binding and non-binding sections explicit in the LOI itself — courts in some states have found informal LOIs to create implied obligations if language is ambiguous. The binding provisions (exclusivity, confidentiality, governing law) are sufficient to protect both parties while leaving deal terms open for renegotiation based on due diligence findings. Do not sign an LOI that makes the purchase price binding before due diligence is complete.