Model Study: Indoor Pickleball Conversion of a Former Joann Store, 30 A & S Drive, Paramus, New Jersey

The franchise structure as proposed does not cover its debt: a Picklr-type franchised club financed under SBA 7(a) at 10 percent equity reaches a Year 3 DSCR of 0.64x after a 9 percent royalty and brand-fund load, and its reserve is gone in Year 2. Restructured as an independent operator, the 10-court club reaches a Year 3 DSCR of 1.26x, but only if rent stays at or below $13.00 per SF NNN, equity rises to 25 percent ($685,040 on a $2,740,150 project) and a $600,000 financial reserve is funded. Buying the building is not supportable: the listing offers it for lease only, and an illustrative purchase produces 1.15x. The franchisor's condition is itself an underwriting fact: The Picklr confirmed a corporate restructuring in September 2026, and as of 5 October 2026 no bankruptcy petition had been verified in public sources; confirming the status on PACER is a condition precedent to any franchise credit decision. Determination: not supportable as a franchise as proposed; conditionally supportable as an independent operator as restructured.

Model study prepared by MMCG Invest | Michal Mohelsky, J.D., FMVA | October 5, 2026

As proposed, a franchised club financed under SBA 7(a) at 10 percent equity is not supportable. The royalty and brand-fund load is modeled at 9 percent of gross revenue, based on Pickleball Kingdom's published 7 percent royalty and 2 percent ad fund, taking $181,800 out of Year 3 cash flow. Year 3 DSCR falls to 0.64x, the case never reaches 1.00x even on the sponsor's more favorable ramp, and the $450,000 reserve modeled for the franchise case runs out in Year 2. Separately from the arithmetic, the franchisor's credit is impaired: The Picklr's own 2025 FDD stated that its financial condition "calls into question" its ability to support franchisees, its restructuring is confirmed, and its bankruptcy status was unresolved as of 5 October 2026.

As restructured, an independent operator is conditionally supportable at a Year 3 DSCR of 1.26x. The structure: an SBA 7(a) leasehold loan of $2,055,110 at 75 percent loan-to-cost; 25 percent equity of $685,040; a 12-month interest-only period; a $600,000 financial reserve; and base rent negotiated at or below $13.00 per SF NNN (the asking rate is undisclosed, "Upon Request"). Because the coverage margin is thin, the determination depends on the Conditions and Limitations, chiefly: a measured clear height of 18 feet or more; a zoning determination permitting indoor recreation; confirmed parking adequacy; and a signed lease at or below the rent ceiling.

The purchase path is not supportable. The building is offered for lease, not sale. At an illustrative $250 per SF acquisition (MMCG assumption), a bank first lien plus SBA 504 structure produces a Year 3 DSCR of 1.15x, and dark-box recovery would fall short of the combined loan balance.

This is a model study. The subject building is a real, publicly listed property; the operator and borrower are hypothetical and unnamed. No private client data and no analog from any other engagement were used. Real companies appear only as named franchisors, competitors and parties to public reporting, using their own published figures or reporting by named publishers. Every figure carries a documentary source or is labeled "MMCG assumption," and figures are dated. Figures read directly from the publisher's own page (the LoopNet listing, Census QuickFacts, SFIA, IAPPF, Community Impact, SBA.gov) are marked primary-verified; figures carried from secondary summaries are marked as such. The research pass closed on 5 October 2026. The pro forma uses MMCG assumptions benchmarked to public franchisor disclosures and does not forecast any actual operator's results. The underwriting framework is described on our indoor sports complex feasibility page.

The method is set out in full in MMCG's feasibility study methodology.

Four big-box candidates of 25,000 to 45,000 SF were screened.

Paramus was selected as the only candidate both currently marketed and inside the size band, with the deepest affluent trade area (Bergen County median household income $124,884), a 5-per-1,000 parking ratio and Route 17 exposure at 137,800-plus vehicles per day (LoopNet). The selection's main weakness: the "few dedicated indoor clubs" premise was not primary-verified for Paramus (see Competitive Supply).

The Project is a dedicated, membership-led indoor pickleball club under an independent brand, occupying the full 30,000 SF former Joann store, a freestanding outparcel next to Paramus Park Mall with pylon signage on Route 17.

Physical program. Ten regulation courts, each 20 by 44 feet inside a 30-by-60-foot playing envelope, take about 18,000 SF. The remaining 12,000 SF holds a front desk and pro shop (about 1,200 SF), a lounge and beer-and-wine bar (about 2,500 SF), restrooms and locker rooms (about 1,800 SF), a coaching and dink-wall bay (about 1,500 SF), and circulation, mechanical and storage. The 10-court count matches published conversions of similar size: The Picklr runs 9 courts in a 22,000 SF former Bed Bath and Beyond in Logan, Utah; S2 Pickleball opened 9 courts in 25,000 SF in Boise; Pickleball Kingdom installed 12 courts in a roughly 40,000 SF former Bed Bath; The Picklr Centereach opened 11 courts in 33,900 SF.

Hours and staffing. 6:00 a.m. to 11:00 p.m. daily, giving 61,880 bookable court-hours after maintenance closures (MMCG assumption). Staffing at stabilization: a general manager at $90,000, an operations and programming manager at $65,000, about 7,000 paid front-desk hours a year at $18.00 with app-based keyless entry for early-morning members, and contract coaches paid 60 percent of clinic and lesson revenue (MMCG assumptions).

Occupancy and ownership. A 10-year NNN lease with two five-year options; base rent $13.00 per SF, flat Years 1 to 5, stepping 10 percent in Year 6; six months of free rent during build-out; a single-purpose operating company as borrower; personal guaranties from every owner of 20 percent or more (MMCG assumptions).

Positioning. A premium-quality, price-disciplined independent alternative to the franchise systems. Unlimited membership is $169 per month, below The Picklr's $189 Unlimited rate effective 1 April 2026. Targets at stabilization in Year 3: 600 average members, blended realized dues of $150 per month, blended utilization of 49.7 percent.

Marketing and Sales Strategy. Pre-sales open 120 days before opening; founding members get $139 per month, held for 12 months and capped at 180 members (MMCG assumption). The demand base is Bergen County's 977,026 residents, 19.8 percent of them aged 65 or over, so daytime programming targets retirees and evening leagues target employed adults aged 35 to 64. Acquisition channels: DUPR-rated open play, corporate events sold to the Route 17 office and retail corridor, referral credits, and partnerships with nearby fitness tenants including Crunch Fitness and F45. The launch marketing budget is $110,000 in Year 1, falling to $70,000 at stabilization; retention is managed through a monthly member committee (MMCG assumptions).

Amenities.

Building facts. The listing describes a freestanding outparcel built in 1992, partially built out as standard retail, with central air and heating and private restrooms (LoopNet, accessed 5 October 2026).

Lease or purchase terms. The listing offers lease only, rent "Upon Request," rent type "TBD," term negotiable; no sale price is published. The $13.00 per SF NNN model rent is an MMCG assumption: it is the highest rent that still yields a 1.25x Year 3 DSCR in the restructured case, a solved ceiling rather than a market finding. The only large-format asking rent seen in this pass was $21.48 per SF per year in Costa Mesa, a different market.

Zoning and assembly use. The Borough of Paramus classification and use permission were not retrieved and remain a condition. MMCG expects the building official to classify indoor courts without spectator seating as Group A-3 assembly (an MMCG judgement pending the official's determination), which brings sprinkler, egress and plumbing requirements budgeted at $75,000 (MMCG assumption).

Utilities and tax. Utilities modeled at $3.25 per SF ($97,500 per year); property tax pass-through at $5.00 per SF ($150,000); CAM and landlord insurance at $3.25 per SF ($97,500) (all MMCG assumptions; the actual assessment was not retrieved). An electrical engineer must confirm the service upgrade for LED court lighting.

Bergen County (U.S. Census Bureau QuickFacts, accessed 5 October 2026): population 977,026 on 1 July 2025, up 2.2 percent from April 2020; 19.8 percent aged 65 and over; median household income $124,884 and per capita income $63,735 (2020 to 2024 ACS); 53.1 percent with a bachelor's degree or higher; 355,127 households; density of 4,105.6 persons per square mile; mean commute 31.2 minutes.

The 6-mile trade area covers about 113 square miles and, at county density, holds about 464,000 residents (MMCG calculation), including parts of Passaic County not measured separately. About 91,900 trade-area residents are 65 or over, and adults 35 and over are estimated at about 241,000 (MMCG assumption). Tract-level ACS data were not pulled. The income profile supports premium pricing, and the retiree share supports weekday daytime use, the daypart where independent clubs most often fall short.

National participation. SFIA's 2026 Topline Report counts 24.3 million US pickleball players in 2025, up 22.8 percent, with about 4.5 million new players; core players (eight or more sessions a year) numbered 7.48 million, up 20.4 percent, and casual players 16.8 million. Among fitness club members, pickleball players rose 21.3 percent to 7.6 million (HFA 2026). A secondary summary reports an SFIA mid-year note that growth "may be slowing," treated as unconfirmed but relevant to direction.

Trade-area court-hours demanded (MMCG calculations and assumptions): core players at about 2.3 percent of residents aged six and over give about 9,900 core players in the trade area; 30 percent paying for indoor play is about 2,970; at 1.5 sessions a week of 1.5 hours, four to a court, that is about 86,900 paid indoor court-hours a year. At stabilization the subject uses 30,732 court-hours, about 35 percent of that demand; whether that share is achievable depends on competing supply, which was not primary-verified.

Leagues and events. No trade-area league registration data were found; the model assumes 1,000 league registrations a year at an average of $100, plus tournaments and corporate events producing $110,000 (MMCG assumptions).

Saturation evidence. Three items show franchise clubs failing in multi-unit markets: The Picklr Round Rock opened January 2025 and closed in early September 2026 when its owners chose not to renew the lease, consolidating into two other Austin clubs; the Goleta franchisee left the system and rebranded as The Grove Pickleball; and a 16-court Picklr build-out in Elmwood, Louisiana stalled in late 2025 (secondary). The Picklr had sold more than 500 locations by 2025 against 56 franchised outlets open at year-end 2025, a large sold-but-unopened backlog its own disclosures flagged. The Picklr's 12 mature units reported median gross sales of about $938,000; the subject's modeled $2,020,000 is 2.15 times that median, attributed to trade-area income and density and an unbundled pricing model. This gap is the largest single underwriting risk in the study.

Census status, stated plainly. The 20-minute-drive census with operator-site pricing was not completed with primary verification in this pass, and no operator website within the Paramus drive time was retrieved. The entries below record what was verified at the system level; completing the trade-area census is a condition precedent to credit approval.

Competitor Number 1: The Picklr (franchise system). 56 franchised outlets at year-end 2025. Unlimited membership $189 per month from 1 April 2026, up from $149 (secondary); membership bundles free court reservations, four clinics a month and unlimited leagues. The nearest verified unit is Centereach, Long Island (11 courts, 33,900 SF), judged outside the 20-minute radius. No Bergen County unit was verified.

Competitor Number 2: Pickleball Kingdom (franchise system). Investment $940,000 to $2,257,600 (2026); royalty 7 percent, ad fund 2 percent; the franchise fee is reported at both $60,000 and $49,000, a conflict left unresolved. Facilities run 10 to 20 courts. No Bergen County unit was verified; no distress reported, and the brand announced European expansion in February 2026.

Competitor Number 3: PickleRage (franchise system). Clubs of 25,000 to 45,000 SF. No trade-area unit verified.

Competitor Number 4: Ace Pickleball Club (franchise system). Investment $817,750 to $2,404,850 (2025 FDD, secondary); a Bed Bath conversion in Solon, Ohio occupies 40,000 SF. No trade-area unit verified.

Competitor Number 5: Dill Dinkers (franchise system). No published price or New Jersey location retrieved in this pass.

Competitors Number 6 to 8: independents, fitness clubs with courts, and public courts. Not retrieved. Crunch Fitness and F45 are listed near the subject but neither operates courts. No announced openings or recent closures were verified within the trade area.

Because the "few dedicated indoor clubs" premise is unverified, MMCG treats a nearby franchise opening as a base-review sensitivity, not a tail case.

The Picklr's status as of 5 October 2026. A corporate restructuring is confirmed (a Picklr employee wrote that her role ended "due to a corporate restructure"; IAPPF, 17 September 2026). The COO was elevated to acting president. Athletech News reported on 25 September 2026 that the company cut corporate staff, closed several clubs and is "evaluating a number of options." IAPPF stated on 17 September that it had not independently verified a bankruptcy petition or a case number, noting that a restructuring is not a bankruptcy filing and that a franchisor bankruptcy would not automatically close independently owned clubs. IAPPF published an update on 3 October 2026 whose address references Chapter 11, but its text could not be retrieved, so any filing, its date, court and case number are unconfirmed. MMCG's position: a Chapter 11 filing is possible but unconfirmed and must be checked on PACER before any credit decision on the franchise case.

Lease-guaranty mechanism. The 2025 FDD included a Corporate Guaranty Amendment under which the franchisor could act as a backup or partial guarantor of franchisee leases, with fees payable for that support; the documents do not establish how many guaranties were executed or their dollar exposure. A lender should value any franchisor lease support at zero.

Operator structure. The franchise case carries three risks the independent case does not: a 9 percent royalty and fund load, dependence on franchisor systems (software, national reciprocity, brand marketing), and credit exposure to an impaired franchisor. The independent case gives up brand awareness and reciprocity and keeps the 9 percent of gross while removing franchisor counterparty risk. The Goleta exit shows a club can survive as an independent after leaving a system, and IAPPF observed that landlords and lenders may become more conservative on large pickleball facilities. MMCG adopts the independent structure as the restructured case.

Prices are MMCG assumptions benchmarked to published franchisor pricing.

Stabilized revenue, Year 3 (MMCG assumptions): membership dues $1,080,000 (600 members at $150); non-member court rental $180,000; open play $140,000; leagues $100,000; clinics and lessons $240,000; tournaments and events $110,000; pro shop $70,000; food and beverage $100,000. Total $2,020,000.

Utilization by daypart (MMCG assumptions): weekday early 45 percent; weekday daytime 40 percent; weekday prime (5 to 10 p.m.) 80 percent; weekday late 15 percent; weekend prime 75 percent; weekend off-peak 30 percent. Blended: 49.7 percent, or 59.1 utilized hours per court per week, 30,732 court-hours a year at $65.73 of revenue per utilized hour. The documented support is demographic (the 19.8 percent senior share supports daytime; the 31.2-minute mean commute pushes working-adult demand to evenings); no published operator utilization data were found.

Seasonality and ramp. A Northeast indoor club peaks November to March and softens June to August; the monthly index runs 115 in January to 80 in July (MMCG assumption), and opening is set for 1 October so the first winter falls inside the ramp. Revenue reaches 65 percent of stabilized in Year 1, 85 percent in Year 2 and 100 percent in Year 3, then grows 2 percent a year; base attrition is 25 percent with lost members replaced (MMCG assumptions).

Lease-up table (MMCG assumptions): presale 180 founding members; Year 1 quarterly average members 260 / 320 / 350 / 380 at blended utilization of 31 to 36 percent; Year 2 average 510 members at 43 percent; Year 3 average 600 members at 49.7 percent.

Location: 30 A & S Drive, Paramus, New Jersey 07652 (LoopNet Listing ID 36594466) Size in SF (Gross): 30,000. Courts: 10. Case: restructured (independent operator, leasehold).

Source: Marshall & Swift CoreLogic, MMCG

Hard cost of $58.08 per SF sits at the low end of the $55 to $80 per SF conversion band; the unknown clear height, slab flatness and roof condition justify the 15 percent contingency. Excluding the reserve and deposits, project cost of $2,033,900 falls at the top of The Picklr's Item 7 range (about $1.25 to $2.08 million), within Pickleball Kingdom's ($940,000 to $2,257,600), and above the roughly $1.5 million each reported for two Orange County Picklr conversions of 27,000 and 19,000 SF. MMCG reads the hard cost as reasonable and the reserve as deliberately heavier than franchise norms. The proposed franchise case adds a $60,000 franchise fee and cuts the reserve to $450,000: total cost $2,660,330, a $2,394,300 loan at 90 percent, $266,030 of equity, and $379,700 of amortizing debt service.

Loan Assumptions (restructured)

Stated rules (verified in this pass). A brand meeting the FTC definition of a franchise must be in the SBA Franchise Directory to obtain SBA financing, and placement is not an endorsement (SBA, accessed 5 October 2026); the current directory file is effective 29 September 2026. The combined 7(a) plus 504 limit is $10 million effective 4 July 2026; 504 equity rises to 15 percent for a new business or special purpose property and 20 percent for both. MMCG's working understanding of SOP 50 10 8 (10 percent minimum startup injection, maximum collateralization, personal guaranties from 20 percent owners) is carried as unverified program assumptions, since the SOP text was not retrieved.

Judgement calls. The Picklr fails a franchisor-health review as of 5 October 2026 on its own FDD risk factor, the confirmed restructuring, the closures and the unresolved bankruptcy status; a directory listing, if one exists, would not cure that, because placement is not an endorsement. On special purpose classification, the converted box keeps its retail shell, slab and storefront and can be re-let to retail (documented backfills include Crunch Fitness taking 30,973 SF of former Bed Bath space in Hagerstown, and Burlington and Barnes and Noble taking dozens of boxes), so MMCG views the conversion as arguably general purpose; to be conservative, the 504 purchase path is underwritten at 20 percent equity anyway.

Three structures compared.

Purchase case (illustrative). At $250 per SF, acquisition is $7,500,000; with conversion, equipment, reserve and fees, about $10,322,000 total. The stack (all MMCG assumptions): a 50 percent bank first lien at 7.25 percent over 25 years ($5,161,000), a 30 percent CDC debenture at 6.50 percent ($3,097,000), and 20 percent equity ($2,064,000). Annual debt service of about $698,500 against EBITDAR of $800,300 gives 1.15x. At this price, owning does not improve coverage. Conventional: without the SBA guaranty, MMCG expects 30 to 35 percent equity and a 1.35x covenant, which Year 3 cash flow of $410,300 would not meet on a seven-year term.

Stabilized Year 3 (MMCG assumptions).

The franchise royalty and fund rate follows Pickleball Kingdom's published 7 plus 2 percent; The Picklr's own royalty rate was not retrieved.

Independent (restructured), $000

Franchise (proposed), $000

The franchise case never reaches 1.00x, even on the sponsor's more favorable ramp. In the independent case, the Year 1 loss and the Year 2 shortfall consume $563,000 of the $600,000 reserve, leaving $37,000, which is why the reserve is sized at $600,000 and cannot be reduced.

Contribution per utilized court-hour is $56.81 independent and $50.89 franchise (MMCG calculation). Year 3 fixed charges are $1,335,600 independent and $1,321,600 franchise.

The independent case clears 1.25x by 0.1 percentage points of utilization. A lender should treat the restructured approval as supportable only with the covenants and reserve described, not as comfortably covered.

Independent Year 3 base: EBITDA $410,300; debt service $325,900; DSCR 1.26x.

Franchisor failure mid-term (franchise case, Year 4). A franchisor failure with a 10 percent transitional member loss and $150,000 of rebranding and software migration costs takes Year 4 EBITDA to negative $64,000. If the franchise agreement is then terminated or rejected and royalties stop, Year 5 EBITDA rises to $443,500 and DSCR to 1.17x: a franchisee may cover its debt better after leaving the system, as the Goleta exit suggests, though the outcome depends on contract terms and any bankruptcy court's treatment of the agreements.

Dark-box recovery if the operator fails. Leasehold case: courts, HVAC and restrooms become the landlord's property, so the lender's collateral is FF&E only; a 20 percent orderly-liquidation recovery on $230,000 of equipment yields about $46,000, roughly 2 percent of the loan, with the rest resting on guaranties. One upside: IAPPF anticipates a potentially significant market for second-generation pickleball real estate, so lease assignment to a successor operator is plausible. Purchase case: dark value as retail at 70 percent of a $7,500,000 basis, less $300,000 of reconversion, is $4,950,000, about 60 percent of the combined $8,258,000 of debt; the first lien is covered and the CDC position impaired.