The lease is often more important than the location itself. A poorly structured lease can drain profits or even force you out early. Here are the mistakes gym owners make most frequently.
What to know
Landlord-drafted leases are written to protect the landlord. Without edits, you may face unlimited personal guarantees, vague repair responsibilities, and escalating CAM costs. Many gym owners also overlook renewal rights, leaving them vulnerable once their term ends.
Action steps
- Negotiate limits on personal guarantees. These can often be capped at a dollar amount or limited to the first few years.
- Secure renewal options with clear rent terms. This protects your ability to stay if the location works.
- Clarify who is responsible for HVAC, roof, and structural repairs. These are costly and should not surprise you.
- Broaden the use clause so it covers activities like heavy weights, sleds, and loud music.
- Ask for a cure period before default. This gives you time to fix an issue before eviction.
Numbers to run
A 3 percent annual rent increase sounds small, but on $10,000 per month it grows to over $11,600 by year five. That’s nearly $20,000 more in a single year than when you started. Always project rent escalations over the full term.
Questions to ask
- Who covers HVAC replacement and structural repairs?
- What renewal options exist, and how is rent set?
- Is there a cap on CAM increases?
- What notice and cure periods apply before default?
Next step
Do not treat the lease as boilerplate. Every clause matters. Edit it before you sign so you don’t fight it after you open.