gym lease

Before You Sign: Ten Things To Do When Negotiating A Gym Lease

Negotiating your gym lease is a huge step in starting your fitness business! Here are ten things to do to be proactive and prepared for the process.

Monica Hilton
January 4, 2023
Before You Sign: Ten Things To Do When Negotiating A Gym Lease
Negotiating your gym lease is a huge step in starting your fitness business! Here are ten things to do to be proactive and prepared for the process.

Once you’ve picked out the perfect location for your fitness business, the next step is negotiating your gym lease.

Drafting a lease and signing on the dotted line might seem relatively straightforward. But experienced gym owners advise you to be aware of where you can save money and avoid pitfalls. Here are their ten lease-negotiation tips:

1. Hire An Expert To Help With Your Gym Lease.

Many gym owners say if they were to do it all over again they’d hire a lawyer to help with negotiating the gym lease. It’s worth it if it saves you money and headaches in the future.

Negotiating a gym lease

Often, a lawyer will catch things you might not understand or even be aware of. One example is the difference between gross and triple net. In a gross lease, the tenant pays a set sum and the landlord pays all real estate expenses. In a net lease (referred to as triple net), the tenant pays for utilities and property taxes, in addition to rent.

2. Read The Fine Print.

If you choose not to hire a lawyer, make sure you read the fine print. One gym owner’s landlord tried to build a ‘personal guarantee provision’ into the lease. This would’ve made the tenant personally liable for the remainder of the lease, even if the business went bankrupt.

Similarly, pay attention to specific details like yearly increases. At the very least, make sure they’re reasonable and justified. This way, you won’t end up paying 25 percent more in your fourth year than your first.

3. Ask Around.

If there are other tenants in your building, talk to them. Be upfront that you’re negotiating a gym lease and find out what the landlord is like. Also, make sure your music and barbell dropping won’t be a problem for next-door businesses. It’s not uncommon for situations to arise based on noise complaints, so be proactive.

4. Include Gym-Specific Clauses.

Not only should you discuss noise levels with your landlord and neighbors, include it in your lease as well. This way, the specifics of the agreement are black and white. Other lease provisions could include things like outdoor activities around the building. So your members will be in the clear with things like running, sled pushes, tire flips, etc.

Gym specific clauses in lease

5. Push For Upgrades To Your Gym Lease.

If you plan to make revisions in your new space, or add features like showers, try to work that in when negotiating your gym lease. The goal is to save money by amortizing the cost over time.

In addition, aim to include possible future repairs in your lease, such as a heating unit (especially if it’s old). In the event that your HVAC system breaks down, you don’t want to be responsible for a full replacement. Since you don’t own the building, an expense like this that you can’t take with you to the next location could be costly.

6. Beware Of Empty Promises.

Do your research to make sure that what both parties have agreed to in negotiating a gym lease is even feasible.

One gym owner told us his landlords promised his utilities would be submetered, meaning tenants would be billed on individual usage. As it turns out, the building wasn’t set up for submetering and the setup cost was upwards of $40,000. Because of this, the gym’s electricity was turned off twice when the landlord didn’t pay the bill.

Similarly, it’s also important to check local bylaws. Another gym owner told us about a time he spent $30,000 on building new restrooms. Afterward, the city came in and enforced the handicapped-restroom requirement, costing him an extra $10,000. Had he checked the bylaws in advance, the restrooms could’ve been built to code from the start.

7. Factor In Renovation Time.

Do your best to estimate the amount of time it will take to get your space ready to open. If you estimate that time period is a couple months, negotiate two to three months of abatement into your lease. That way, you’re not paying rent while you’re preparing the facility.

8. Plan Ahead For Success.

If all goes according to plan, you’re going to be running a booming business with years of success ahead. Therefore, you should plan ahead to give yourself options for renewing your gym lease.

Plan ahead for gym success

For example, if the initial term of your lease is four years, negotiate a two-year extension option. This gives you the choice to stay longer if you want to continue operating from your current space at that time.

On the opposite side, you’ll also want to be aware of your exit options in the event that you need to relocate or close your doors.

9. Hire An Inspector.

Spend the money on an inspection to make sure your building is up to your current city codes. When negotiating a gym lease, nothing is worse than code or building issues when you’re supposed to be focused on a grand opening.

10. Be Smart When Renegotiating Your Gym Lease.

When your lease is about to expire and you’re planning on renegotiating a new one, start the process early. If you and the landlord can’t come to terms on a new agreement, you don’t want to be scrambling to find a new space.

Further, although you might have a trusting relationship with your landlord, beware of being too trusting. In other words, don’t negotiate anything verbally. Outline the details and get every single detail in writing.

PRO TIP: Once you’ve negotiated your lease, take the next step! Set up your gym management system by registering your FREE account here!

PushPress is a gym management software that is here to help you grow your fitness facility. With PushPress, you'll be able to manage classes and appointments, take payments, track attendance, manage leads and create an unforgettable member experience!

Monica Hilton

Monica is our Content Manager extraordinaire for PushPress. She also owns her gym in Indianapolis, Together We Rise CrossFit, which she opened in 2014 and previously worked in IndyCar racing.

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