A yoga studio acquisition has unique moving parts — member retention, lease transferability, instructor dependency, and recurring revenue quality. Use this industry-specific LOI template and negotiation guide to submit a credible offer and protect your interests from day one.
A Letter of Intent (LOI) is a non-binding document that outlines the key terms of your proposed acquisition before a formal purchase agreement is drafted. In a yoga studio deal, the LOI sets the tone for due diligence, signals your seriousness as a buyer, and establishes critical deal parameters — particularly around membership retention mechanics, lease assignment, and seller involvement during transition. Because yoga studios derive much of their value from community relationships, recurring memberships, and the goodwill of tenured instructors, your LOI must address these intangible drivers explicitly. A well-crafted LOI signals to the seller that you understand the business and reduces the risk of deal collapse later over issues that could have been addressed upfront. Typical yoga studio deals are structured as asset purchases ranging from 2.5x to 4.5x EBITDA, often financed through a combination of SBA 7(a) loans, seller financing, and buyer equity. The LOI should reflect this structure clearly before you invest time and money in full due diligence.
Find Yoga Studio Businesses to AcquireBuyer and Seller Identification
Clearly identify the legal names and entities of both the buyer and seller. If the buyer is forming an acquisition entity (e.g., an LLC), note that the final purchase will be made by that entity or its designee. Confirm whether the seller is an individual owner-operator or a legal entity such as an LLC or S-Corp.
Example Language
This Letter of Intent is entered into between [Buyer Full Legal Name] or its designated acquisition entity ('Buyer') and [Seller Full Legal Name / Studio LLC Name] ('Seller'), the owner and operator of [Yoga Studio Name], located at [Full Business Address] ('the Business').
💡 If the seller owns the studio under a personal name but operates through an LLC, confirm which entity holds the lease, the Mindbody account, and any equipment financing. Acquiring the wrong entity can create complications with lease assignment and membership contract transfers.
Business Description and Assets to Be Acquired
Describe the yoga studio being acquired and specify whether the deal is structured as an asset purchase or equity purchase. List the key assets included in the sale, such as studio equipment, leasehold improvements, membership contracts, the Mindbody database, the studio brand and social media accounts, website, phone number, and any retail inventory.
Example Language
Buyer proposes to acquire substantially all of the operating assets of the Business, including but not limited to: all studio equipment and props, leasehold improvements, active membership contracts and client database (as maintained in Mindbody or equivalent platform), the business name, logo, social media accounts, website domain, phone numbers, class schedules, instructor agreements, and any remaining retail inventory. This transaction is intended to be structured as an asset purchase. The following are expressly excluded from the sale: [list any excluded assets, e.g., seller's personal vehicle, any equipment under lien not assumed by buyer].
💡 Asset purchases are standard in yoga studio deals and preferred by buyers to avoid assuming unknown liabilities. Confirm whether the seller has any outstanding gift card obligations, prepaid class pack liabilities, or deferred teacher training deposits — these should be disclosed upfront and either excluded or credited at closing. The Mindbody database is often the most operationally valuable asset; confirm data export rights are included.
Purchase Price and Valuation Basis
State the proposed total purchase price and briefly explain the basis for the valuation. Yoga studios in the lower middle market typically trade at 2.5x–4.5x EBITDA, with premium multiples reserved for studios with 60%+ recurring revenue, tenured instructor teams, favorable leases, and strong community brand equity.
Example Language
Buyer proposes a total purchase price of $[Amount] ('Purchase Price'), representing approximately [X]x the Business's trailing twelve-month Seller's Discretionary Earnings (SDE) of $[Amount], as represented by Seller. This valuation is based on the Business generating approximately $[Revenue Amount] in annual revenue with a recurring membership revenue percentage of approximately [X]%, as represented by Seller. The Purchase Price is subject to adjustment following completion of Buyer's due diligence.
💡 Yoga studio valuations are heavily influenced by recurring membership revenue quality. If drop-in or punch-card revenue represents more than 40% of total revenue, push for a lower multiple. Reference the Mindbody data during diligence to validate active member count and churn rate before finalizing your price. A valuation contingency clause allowing price renegotiation if SDE comes in below a stated threshold is strongly recommended.
Deal Structure and Financing
Outline the proposed financing structure, including equity injection, SBA loan proceeds, and any seller financing or earnout component. Yoga studio acquisitions are SBA 7(a) eligible, and many deals are structured with a seller note tied to membership retention milestones to align incentives post-close.
Example Language
The Purchase Price shall be funded as follows: (i) approximately [70–80]% via an SBA 7(a) loan for which Buyer intends to apply promptly following execution of this LOI; (ii) approximately [10–15]% from Buyer's equity injection at closing; and (iii) approximately [10–20]% via a Seller note, to be structured as a subordinated promissory note with a term of [24–36] months at [6–8]% annual interest. Up to $[Amount] of the Seller note shall be contingent on active paying membership count remaining at or above [X]% of the membership count verified at closing, measured at the [6] and [12]-month anniversary post-close.
💡 Sellers often resist seller financing tied to retention milestones, arguing they cannot control whether members stay. Counter by framing it as a transition risk-sharing mechanism and limit the contingent portion to 10–15% of total deal value. For SBA deals, note that standby seller notes must meet SBA subordination requirements — confirm this with your lender before finalizing LOI terms. Earnout structures tied to revenue performance over 12–24 months are an acceptable alternative if the seller resists retention-linked notes.
Lease Assignment and Real Estate Terms
Address the existing studio lease directly, including the requirement that the lease be assignable to the buyer, the remaining term, and any landlord approval process. The lease is one of the highest-risk elements in a yoga studio acquisition — a studio buildout can represent $150K–$400K in sunk costs, and a non-assignable lease can kill a deal.
Example Language
This LOI is contingent upon Seller's ability to assign the existing lease for the studio premises at [Address] to Buyer, or to facilitate execution of a new lease between Buyer and Landlord on substantially the same terms, with a remaining lease term of no less than [3] years from the anticipated closing date, inclusive of any renewal options. Seller shall provide Buyer with a copy of the existing lease within [5] business days of LOI execution and shall cooperate in obtaining written landlord consent to assignment prior to the expiration of the due diligence period. Buyer reserves the right to terminate this LOI without penalty if landlord consent cannot be obtained on acceptable terms.
💡 Review the lease for rent escalation clauses, personal guarantee requirements, and any co-tenancy or use restrictions that could limit how you operate. If the landlord requires a new lease rather than an assignment, negotiate to preserve the same rent and term. A landlord introduction call during diligence — with seller present — can smooth the approval process significantly. Never proceed to closing without written landlord consent in hand.
Due Diligence Period and Access
Define the length of the due diligence period, the types of information to be provided, and the conditions under which either party may terminate. For yoga studios, due diligence should include Mindbody data exports, instructor agreements, lease documents, three years of financial statements, and a review of membership contract terms.
Example Language
Buyer shall have [30–45] calendar days following execution of this LOI and receipt of all requested diligence materials ('Due Diligence Period') to complete its review of the Business. During this period, Seller shall provide Buyer with reasonable access to: (i) three years of profit and loss statements and tax returns; (ii) complete Mindbody data exports including active membership count, churn rate, attendance history, and revenue by category; (iii) all instructor employment and contractor agreements; (iv) the studio lease and any amendments; (v) equipment lists and any existing financing or lease obligations; and (vi) any outstanding liabilities including gift cards, class packs, teacher training deposits, and deferred maintenance. Buyer may terminate this LOI without penalty at any time prior to the end of the Due Diligence Period if findings are unsatisfactory in Buyer's sole discretion.
💡 Request Mindbody credentials or a full data export as early as possible — this is your most reliable source of truth for membership health and revenue trends. Sellers who delay providing this data are often concealing churn or overestimating active member counts. A 30-day due diligence window is often sufficient for smaller studios; push for 45 days if the studio operates multiple modalities, has a teacher training program, or has complex financials.
Exclusivity and No-Shop Provision
Request a period of exclusivity during which the seller agrees not to solicit or entertain offers from other buyers. This protects your due diligence investment and signals mutual commitment to the deal.
Example Language
In consideration of Buyer's investment of time and resources in due diligence, Seller agrees that for a period of [45] calendar days following execution of this LOI ('Exclusivity Period'), Seller shall not solicit, encourage, or engage in discussions with any other party regarding the sale of the Business or its assets. Seller shall promptly notify Buyer if any unsolicited offer is received during the Exclusivity Period. The Exclusivity Period may be extended by mutual written agreement of both parties.
💡 A 45-day exclusivity window is standard for yoga studio deals of this size. If the seller pushes back, offer a shorter window (30 days) with an option to extend upon mutual agreement. Exclusivity is non-negotiable for buyers using SBA financing, as lender timelines alone can consume 30–45 days. Sellers who refuse any exclusivity are a red flag.
Seller Transition and Non-Compete
Define the seller's expected involvement post-closing to facilitate a smooth transition, and establish the geographic and temporal scope of a non-compete agreement. In yoga studios, seller transition is critical because the owner often has personal relationships with members and instructors.
Example Language
Seller agrees to provide a transition period of no less than [60–90] calendar days post-closing, during which Seller shall assist Buyer with introductions to key instructors, active members, and the landlord; transfer of all software accounts including Mindbody, social media platforms, and payment processors; and training on daily operations. Seller further agrees to execute a non-compete and non-solicitation agreement prohibiting Seller from: (i) opening, operating, or consulting for a yoga or boutique fitness studio within [10] miles of the Business for a period of [3] years post-closing; and (ii) soliciting any instructor, employee, or member of the Business for a period of [2] years post-closing.
💡 If the seller currently teaches classes, negotiate a structured wind-down of their teaching role during the transition period rather than an abrupt departure — a sudden exit often triggers member attrition. The non-solicitation for instructors is equally important as the member non-solicitation; a departing seller who recruits key teachers to a competing studio can devastate your acquisition. Confirm the non-compete is enforceable in the relevant state jurisdiction.
Conditions to Closing
List the key conditions that must be satisfied before the transaction can close. These protect the buyer from being obligated to proceed if material issues emerge during diligence or if financing falls through.
Example Language
The obligations of Buyer to consummate the acquisition are subject to satisfaction of the following conditions: (i) completion of satisfactory due diligence in Buyer's sole discretion; (ii) execution of a definitive Asset Purchase Agreement acceptable to both parties; (iii) receipt of SBA loan approval and funding commitment on terms acceptable to Buyer; (iv) written consent from Landlord for lease assignment or execution of a new lease on terms acceptable to Buyer; (v) no material adverse change in the Business, membership base, or key instructor team between the date of this LOI and closing; and (vi) all representations and warranties made by Seller being accurate as of the closing date.
💡 The 'material adverse change' condition is particularly important in yoga studio deals where a single instructor departure or lease complication between LOI and closing can significantly affect business value. Define 'material adverse change' explicitly — for example, a reduction of more than 15% in active paying members or the departure of any instructor teaching more than 20% of weekly classes.
Confidentiality
Confirm that both parties agree to keep the terms of the LOI and all diligence materials confidential, and that the existence of the sale will not be disclosed to staff, members, or the public without mutual consent.
Example Language
Both parties agree to keep the terms of this LOI and all information exchanged during due diligence strictly confidential. Neither party shall disclose the existence of this transaction to instructors, employees, members, or the general public without the prior written consent of the other party, except as required by law or as necessary to facilitate financing with Buyer's lender. Seller acknowledges that premature disclosure of a potential sale to staff or members could cause disruption and may constitute a breach of this LOI.
💡 Member and instructor churn triggered by premature disclosure is one of the most common deal killers in yoga studio acquisitions. Establish a clear communication plan before closing that both parties agree to, including how and when instructors will be told, how members will be notified, and what messaging will be used. This should be addressed in the LOI and formalized in the purchase agreement.
Membership Retention Contingency on Seller Note
Negotiate to tie a portion of the seller's note (typically 10–20% of total purchase price) to maintaining active paying membership count at or above a defined threshold — commonly 85–90% of the membership count verified at closing — measured at 6 and 12 months post-close. This aligns the seller's financial incentive with a smooth transition and protects the buyer if the seller's departure triggers member attrition. Sellers will often push back, arguing membership retention is out of their control post-close; a compromise is to make the contingency conditional on seller-specific departures (e.g., if the seller resumes teaching competing classes nearby) rather than general market churn.
Lease Assignment Terms and Landlord Approval
The studio lease is frequently the most critical and time-sensitive element of a yoga studio deal. Negotiate to include lease assignment as a hard condition of closing, not merely a best-efforts obligation. Request that the seller introduce you to the landlord early in diligence, and confirm that the lease contains no change-of-control provisions that would allow the landlord to terminate or reprice upon sale. Insist on reviewing the full lease, including any personal guarantee requirements that the landlord may attempt to impose on the incoming buyer, before committing to the deal.
Assumed Liabilities: Gift Cards, Class Packs, and Teacher Training Deposits
Yoga studios commonly carry deferred revenue liabilities in the form of unused gift cards, prepaid class packs, and deposits on upcoming teacher training programs. These are real obligations that transfer with membership contracts. Negotiate either a purchase price credit equal to the outstanding value of these liabilities at closing, or an explicit carve-out so the seller retains responsibility for honoring them. Failure to address this can result in the buyer inheriting thousands of dollars in service obligations with no corresponding cash.
Seller Transition Length and Teaching Wind-Down
If the seller currently teaches classes, negotiate a structured transition plan that gradually reduces their class load over 60–90 days post-close rather than requiring an immediate departure. A cold-turkey exit often triggers member attrition as loyal students follow the original owner. A phased transition — where the seller introduces the new owner to the community and gradually hands off relationships — preserves membership value. Include language specifying the seller's teaching schedule during the transition period and a clear end date for their involvement.
Instructor Non-Solicitation and Employment Continuity
Negotiate a mutual obligation: the seller agrees not to solicit or recruit any instructor or employee for a minimum of 24–36 months post-closing, and in exchange, Buyer commits to honoring existing instructor compensation arrangements for a defined period (typically 90 days) post-close. This protects against the scenario where a departing seller recruits star instructors to a new competing studio. Request copies of all instructor agreements, including any existing non-solicitation clauses, during due diligence so you understand what protections already exist at the studio level.
Find Yoga Studio Businesses to Acquire
Enough information to write a strong LOI on day one — free to join.
Most LOI provisions are non-binding, meaning either party can walk away without legal penalty if the deal falls through during due diligence. However, certain clauses — specifically the exclusivity/no-shop provision and the confidentiality agreement — are typically written as legally binding and enforceable. This distinction is important: if a seller breaks exclusivity and negotiates with another buyer while your LOI is in effect, you may have legal recourse. Always have an M&A attorney review your LOI before signing to confirm which provisions are binding in your specific jurisdiction.
Yoga studios in the lower middle market typically trade at 2.5x–4.5x EBITDA or Seller's Discretionary Earnings. Studios at the high end of this range have 60%+ recurring membership revenue, tenured and contracted instructor teams, favorable long-term leases, and strong community brand equity with low owner dependency. Studios where the owner teaches the majority of classes, where drop-in revenue dominates, or where the lease has fewer than 3 years remaining should be valued toward the lower end of the range. Always validate the revenue quality using Mindbody data before settling on a multiple.
Nearly all lower middle market yoga studio acquisitions are structured as asset purchases. This allows the buyer to selectively assume specific assets and liabilities, avoid unknown pre-acquisition liabilities (e.g., unpaid taxes, litigation, or undisclosed gift card obligations), and receive a stepped-up basis in the acquired assets for tax purposes. Stock purchases are rare in this segment and would typically only be considered if the studio holds licenses, contracts, or permits that are non-transferable in an asset deal — which is uncommon for yoga studios. Confirm the structure with your accountant and attorney early in the process.
For a yoga studio, a 60–90 day seller transition period is standard and strongly recommended. During this period, the seller should introduce you to key instructors and long-term members, transfer control of all digital accounts (Mindbody, social media, website, payment processors), and assist with community communication about the ownership change. If the seller is an active instructor, negotiate a phased wind-down of their class load over this period rather than an abrupt departure. Studios where the seller teaches 20% or more of weekly classes should have a 90-day minimum transition with a formal member communication strategy to minimize attrition.
Yes, yoga studios are SBA 7(a) eligible businesses, and most lower middle market acquisitions in this segment are financed with SBA loans. A typical deal structure involves 70–80% SBA loan proceeds, 10–15% buyer equity injection, and 10–20% seller financing. The SBA requires the seller note to be on full standby for the duration of the SBA loan if the seller note is being used to partially fulfill the equity injection requirement. Loan approval timelines of 45–75 days are common, so budget accordingly when negotiating your exclusivity and closing timeline in the LOI.
Instructor departure between LOI and closing is one of the most common causes of deal renegotiation or collapse in yoga studio acquisitions. To protect against this, include a 'material adverse change' condition in your LOI that allows you to renegotiate or terminate if any instructor teaching more than a defined percentage of weekly classes (e.g., 20%) departs before closing. During diligence, review all instructor agreements for non-solicitation clauses and assess whether any instructor has an independent following that could draw members away if they left. Consider requiring the seller to obtain written commitments from key instructors to remain employed post-close as a condition of closing.
Member and staff communication is one of the highest-risk moments in any yoga studio acquisition. Premature or poorly framed disclosure can trigger immediate member attrition or instructor departures. Best practice is to plan the communication strategy in the LOI and formalize it in the purchase agreement — including the agreed timing, messaging, and channel (e.g., in-person all-staff meeting followed by a personal email to all active members from both the outgoing and incoming owner). The seller should personally introduce the new owner to the community in a positive and enthusiastic way. Avoid announcing the sale until all closing conditions are satisfied and funds have transferred.
More Yoga Studio Guides
More LOI Templates
Get enough diligence data to write a confident LOI from day one.
Create your free accountNo credit card required
For Buyers
For Sellers