Letter of Intent Template for Buying a Personal Training Studio

Parties and Studio Identification

Clearly identify the buyer entity, the seller, and the specific business being acquired — including the legal business name, DBA, studio address, and any associated intellectual property such as the brand name and training methodology. If the seller operates multiple locations, specify which location or locations are included in this transaction.

💡 If the seller operates under a sole proprietorship, ensure the LOI identifies the seller as an individual and flags the likely need for an asset purchase structure. Confirm upfront whether any franchise agreements, licensing arrangements, or third-party training certification partnerships attach to the brand and whether those transfer to a buyer.

Transaction Structure

Define whether the deal is structured as an asset purchase or a stock purchase. Most personal training studio acquisitions are structured as asset purchases to allow the buyer to cherry-pick contracts, avoid assuming unknown liabilities, and achieve a stepped-up tax basis on equipment. Specify which assets are included — client membership contracts, session package liabilities, equipment, trade name, phone numbers, social media accounts, and goodwill.

💡 Pay close attention to prepaid session package liabilities. Buyers often seek a credit against the purchase price equal to the outstanding value of unused sessions, as these represent a future service obligation. Negotiate who absorbs this liability and document the outstanding balance as of closing. Exclude any pending litigation, tax liens, or equipment financing obligations from assumed liabilities.

Purchase Price and Valuation Basis

State the proposed total purchase price, the valuation methodology used to arrive at that figure, and how it is allocated across tangible assets, client contracts, and goodwill. Personal training studios in the lower middle market typically trade at 2.5x–4.5x EBITDA, with premium multiples reserved for studios with diversified trainer teams, high membership retention, and long-term favorable leases.

💡 Sellers with informal financial records often disagree with buyer EBITDA calculations because they have undocumented add-backs for personal expenses run through the business. Address this directly in the LOI by requiring the seller to deliver a formal add-back schedule within 15 days of LOI execution. If the seller's adjusted EBITDA is contested, consider tying a portion of the purchase price to a post-close revenue verification period.

Earnout Structure Tied to Client Retention

Because personal training studio revenue is deeply tied to client relationships with the owner-trainer, buyers should include an earnout provision that links a portion of the purchase price to verified client retention metrics at 90, 180, or 365 days post-close. This protects the buyer if clients follow the seller out the door rather than transferring loyalty to the new ownership.

💡 Sellers will push back on earnout structures, preferring all-cash at close. Frame the earnout as a bridge that enables you to offer a higher headline purchase price than you could support on an all-cash basis. Use the studio's existing billing software — Mindbody, Pike13, or similar — as the neutral verification tool to reduce disputes. Define 'active member' precisely to exclude members on pause, gifted memberships, or comp accounts.

Payment Terms and Financing Contingency

Detail how the purchase price will be funded, including buyer equity, SBA 7(a) loan proceeds, seller note terms, and any earnout. Personal training studio acquisitions frequently use SBA financing given the business's eligibility as an operating business with demonstrated cash flow. Include a financing contingency that protects the buyer if SBA approval is not obtained.

💡 SBA lenders will scrutinize the studio's ability to service debt from cash flow, so model your debt service coverage ratio before submitting the LOI. A DSCR of at least 1.25x is typically required. Sellers resistant to providing a seller note should understand that SBA rules often require seller participation in financing as a vote of confidence in the business's ongoing viability. A seller note of 10–15% of purchase price is standard in boutique fitness deals.

Lease Assignment Condition

The studio lease is often the single most critical non-financial asset in a personal training studio acquisition. If the landlord will not assign the lease to a new buyer on acceptable terms, the entire transaction may fail. The LOI must make lease assignment a stated condition of closing and require the seller to initiate landlord consent discussions immediately after LOI execution.

💡 Review the existing lease for assignment restrictions, landlord approval clauses, and any change-of-control provisions before signing the LOI. Some landlords use a sale as an opportunity to renegotiate rent to market rate or shorten remaining term. Know your walk-away terms before entering landlord negotiations. If the lease has less than three years remaining, negotiate a new lease directly with the landlord as a condition of closing.

Trainer Retention and Key-Person Risk

Address the risk that key trainers — particularly those with strong client relationships — may leave following the ownership transition. The LOI should require the seller to maintain existing trainer agreements through closing and encourage the buyer to meet with key trainers during due diligence to assess retention likelihood. Consider including a condition that requires a minimum percentage of revenue-generating trainers to sign new agreements with the buyer prior to closing.

💡 Do not wait until post-closing to meet your trainers. Client retention is a downstream consequence of trainer retention. If any single trainer accounts for more than 30% of studio revenue, flag this as a key-person concentration risk and consider a separate retention bonus funded at close or tied to a 12-month stay agreement. Sellers may resist buyer-trainer meetings during due diligence out of fear of disruption — frame these meetings as a condition precedent to protect both parties.

Due Diligence Period and Access

Define the length of the due diligence period, the types of records the seller must provide, and the buyer's right of access to the studio, financial systems, and key personnel. A standard due diligence period for a personal training studio acquisition is 30–60 days and should cover financial records, membership data, equipment condition, lease documentation, and trainer agreements.

💡 Request a Mindbody, Pike13, or equivalent software data export early in due diligence — this is your best source of objective membership analytics. Cross-reference membership billing data against bank statements to verify that stated recurring revenue is actually being collected. Scrutinize month-over-month churn rates carefully; studios with churn above 5% per month have a fundamentally different risk profile than those with churn below 2%.

Exclusivity and No-Shop Period

Request an exclusivity period during which the seller agrees not to solicit or entertain other offers while the buyer completes due diligence and negotiates definitive documents. A 60–90 day exclusivity window is standard for boutique fitness acquisitions given the complexity of lease, trainer, and membership contract review.

💡 Sellers listed with business brokers may push back on exclusivity, particularly if they have active inquiries from other buyers. Frame exclusivity as a prerequisite to committing your professional fees, lender application costs, and management time. If the seller insists on a shorter exclusivity window, negotiate a staged approach: 30 days for financial due diligence with an option to extend 30 days for lease and legal review upon satisfactory financial findings.

Seller Transition and Non-Compete Obligations

Define the length and scope of the seller's post-close transition support and the geographic and temporal scope of the non-compete covenant. For personal training studios, where clients often have personal loyalty to the owner-trainer, a meaningful transition period and enforceable non-compete are critical value protection measures.

💡 The transition period is arguably more important in a personal training studio than in almost any other small business category because client loyalty follows the trainer, not the brand. Negotiate at minimum a 90-day in-studio transition with the seller present for client introductions. Non-compete geography should reflect the realistic trade area of the studio — typically 5–10 miles in suburban markets and 1–3 miles in urban markets. Ensure the non-compete covers digital and online personal training if the seller has an existing online client base.

Confidentiality and Non-Disclosure

Confirm that both parties are bound by confidentiality obligations with respect to the transaction and all information exchanged during due diligence. If a standalone NDA has not already been executed, include mutual confidentiality provisions directly in the LOI.

💡 Confidentiality is particularly sensitive in boutique fitness because premature disclosure to clients or trainers can trigger attrition before the deal closes. Establish a clear communication plan with the seller for how and when staff and clients will be informed of the ownership transition, and include this plan as an exhibit to the definitive purchase agreement.

Non-Binding Nature and Binding Provisions

Clearly specify which provisions of the LOI are binding on both parties and which are non-binding statements of intent. Standard practice is for the financial terms to be non-binding pending definitive agreement, while exclusivity, confidentiality, and governing law provisions are binding.

💡 Make sure your attorney reviews the LOI before execution even though most terms are non-binding. Courts have occasionally found binding obligations in LOIs when the language is sufficiently specific and the parties have acted in reliance on the document. Avoid language that implies a firm commitment to close and always include a clear walk-away right during due diligence.