A franchised 12-reformer Pilates studio is bankable at system-median performance; a franchised 30-mat yoga studio at its system median clears roughly 1.0x and needs heavier equity or a smaller loan. That is the honest summary of the current FDD record, and it is why the two formats cannot share an underwriting template. In both, the credit risk concentrates in three places: the Year 1 ramp, the gap between the brand average and the bottom quartile, and the franchisor itself. Xponential Fitness, parent of Club Pilates, Pure Barre, YogaSix and StretchLab, entered late 2026 with a Jefferies-led sale review, a pending $17.0 million FTC resolution, 140 studio closures in 2025, and second-quarter cash of $25.0 million against $522.4 million of long-term debt. Lenders should underwrite the brand's bottom quartile and the parent's balance sheet, not the Item 19 average, and an MMCG study does both.
This page covers studio formats specifically: reformer Pilates, barre, yoga and assisted stretch. For big-box clubs, 24-hour franchises and premium clubs, start at the gym and fitness feasibility hub. For climbing, pickleball and court facilities, see indoor sports complex feasibility studies.
What a Lender-Grade Studio Feasibility Study Concludes
The determination is stated, not implied: feasible as proposed, feasible as resized, or not feasible. In studio credits the resizing is usually one of four moves: more equity (20 to 25 percent rather than the 10 percent SBA minimum), a funded working capital reserve sized to the modeled Year 1 shortfall, an underwrite below the FDD system average, or a smaller loan. The three risks the study underwrites:
- Ramp. JETSET Pilates' 2026 FDD discloses average new-studio revenue rising from $67,276 in month one to $101,182 in month twelve against a cited monthly break-even near $45,000 to $50,000; Club Pilates' disclosed new-studio curve runs from about $22,540 in month one to $67,419 in month twelve (2024 FDD cohort data). Year 1 coverage below 1.00x is normal, which is a reserve-sizing problem, not a reason the deal dies.
- Dispersion. The Club Pilates 2026 FDD reports FY2025 average gross revenue of $987,800 and a median of $978,300 across 1,005 studios, but the bottom quartile averaged $685,500 and the lowest studio reported $146,300. YogaSix's bottom quartile averaged $231,707 against $788,337 at the top (2025 FDD, FY2024). The site decides which quartile a new studio joins, which is the core of the feasibility study.
- Franchisor. Royalties, brand funds, technology fees and field support all run through a parent whose condition is an underwriting variable, detailed below.
The method is set out in full in MMCG's feasibility study methodology.
Brand Economics From Current FDDs
Figures below come from 2025 and 2026 FDDs as reproduced by FDD aggregators, with conflicts flagged; MMCG ties every figure used in an engagement to the registry PDF. Annualized closure rates divide exits (terminations, non-renewals, reacquisitions, ceased operations) by average franchised outlets per year.
| Brand (FDD year) | Investment (Item 7) | Headline revenue (Item 19) | Royalty and fees | Signal |
|---|---|---|---|---|
| Club Pilates (2026) | $403,289 to $1,029,811 | Average $987,800; median $978,300; 1,005 studios, FY2025; bottom quartile $685,500 | 8% royalty, 2% brand fund, local advertising the greater of $1,500/month or 2% | The segment's anchor brand; same-store sales down 5% in Q2 2026; zero SBA charge-offs across 148 resolved loans (third-party) |
| JETSET Pilates (2026) | about $525,000 to $752,000 (two sources conflict) | Average $1,137,299; median $1,131,233; average EBITDA $349,103 (30.7%), FY2025 | 7.5% royalty, about 1.5% brand fund | Highest disclosed margins; small system (about 40 units); franchisor Item 21 reportedly shows negative net worth, so the parent review matters |
| BODYBAR Pilates (2025) | $389,964 to $759,356 | Average $628,760; net income 23.6% (FY2023, 16 studios); revenue per member $223/month | 7% royalty, 2% fund, $3,000/month local minimum | One of the few brands disclosing per-member yield |
| Pure Barre (2025/2026) | about $445,299 to $736,465 (2026, secondary) | Median about $345,000 (FY2024); range $43,313 to $1,408,444 | 7% royalty, 2% fund | Barre medians sit well below reformer Pilates |
| YogaSix (2025/2026) | $534,000 to about $1.0 million (2026, secondary) | Average $488,615; median $468,417; 162 studios, FY2024 | 7% royalty, 2% fund, local floor | The yoga benchmark; margin structure is the binding constraint |
| StretchLab (2026) | about $271,000 to $814,000 (sources conflict) | Median about $487,000, 448 studios, FY2025; run-rate AUV down 12% | 8% royalty, 2% fund | 38 openings against 37 closures in 2025; growth has stalled |
| Solidcore | Company-owned (Kohlberg) | Not franchised | n/a | Comparable for demand, not for franchising |
| CorePower Yoga | Company-owned (TSG) | No public financials | n/a | Instructor-classification settlements ($1.4M, $1.65M, $1.49M) are the labor-law precedent for every studio pro forma |
Why two "AUVs" for the same brand differ. The $987,800 Club Pilates figure is the FY2025 average gross revenue of franchised studios open the full year (Item 19). The $966,000 figure circulating is a quarterly run-rate AUV (one quarter times four, including studios with nominal sales), and Xponential's multi-brand run-rate AUV of $659,000 to $683,000 is a different measure again. Underwrite to the Item 19 quartiles; read run-rate AUV as a trend signal. In Q2 2026 that trend was down 5 percent for Club Pilates.
Bottom-quartile underwriting. MMCG's standard is to show the median and average for context but test coverage at the bottom-half average, because a new studio has no claim on the top quartile until the trade area proves it. At the Club Pilates bottom-quartile average of $685,500, a studio financed at the Item 7 midpoint covers at roughly 0.67x, which is the whole argument for testing the site.
Unit Economics: the 12-Reformer and 30-Mat Models
Two reference models anchor every studio engagement. All structural inputs are stated in the study as either FDD disclosures or labeled MMCG assumptions.
Reformer Pilates (Club Pilates type, 12 reformers, about 1,900 SF inline)
| Input | Value |
|---|---|
| Capacity | 56 classes/week, about 34,944 annual slots; roughly 61% utilization at $900,000 revenue |
| Stabilized revenue (Year 3) | $900,000, near the third-quartile average, below the system mean |
| Ramp | Year 1 about 80% of stabilized, Year 2 about 95% |
| Fee load | 8% royalty + 2% fund + 2% local = $108,000 at stabilization |
| Instructor pay | about $44/class (Indeed, Club Pilates average, September 2026); 2,912 classes = $128,000 |
| Stabilized EBITDA | about $216,700 (24.1%), within the disclosed 20% to 30.7% brand range |
| Structure | about $750,000 project; 20% equity; $600,000 Standard 7(a), 10 years |
| DSCR | 0.89x Year 1 / 1.91x Year 2 / 2.25x stabilized; 0.67x at the bottom-quartile AUV |
The Year 1 gap is solved with a funded reserve or 6 to 12 months of interest-only. The bottom quartile is solved only by the site. Suite size is a hard cap: twelve reformers in a small suite run at 94 percent utilization at the FDD average, so the space itself can price the brand average out of reach, a point our Prospect, Kentucky model case demonstrates in detail.
Yoga (YogaSix type, 30 mats, about 2,200 SF)
| Input | Value |
|---|---|
| Capacity | 45 classes/week, about 70,200 slots; about 39% utilization at the median |
| Stabilized revenue | $470,000, at the YogaSix median |
| Fee load | 7% + 2% + $18,000 local floor = about $60,300 |
| Stabilized EBITDA | about $69,000 (14.7%) |
| Structure | $550,000 project; 25% equity; $412,500 Standard 7(a) |
| DSCR | about 1.04x at the median; 1.23x if the loan is held to $350,000 with $200,000 equity |
Yoga is structurally a low-yield, high-capacity format: roughly $17 per visit against $42 in reformer Pilates. Equity, not the brand, determines bankability. An independent yoga studio with a seasoned operator can out-cover a franchise, because the 12 to 13 percent of revenue in franchise fees is the difference between 1.0x and 1.7x.
Independent Studios: What the Data Supports and Where It Stops
No US trade association publishes audited independent-studio revenue, margin or utilization benchmarks: not Yoga Alliance, not the Pilates Method Alliance, not the SBDC network, and Mindbody's industry report covers sentiment and pricing models rather than unit P&Ls. Market-research market-size estimates conflict by more than two times and are unusable for underwriting. Independent studio feasibility therefore rests on the operator's own trailing book, a local competitor price survey from operator websites, and franchisor P&L disclosures used as ceilings. Build-out is cheaper (roughly $100,000 for a no-frills studio to $300,000 to $380,000 premium, with reformers at $2,000 to $5,000 each) and there is no fee load, but there is also no national lead engine and no disclosed comparable set, so MMCG haircuts independent pro forma revenue 15 to 25 percent against franchise Item 19 medians unless the operator brings a seasoned client book.
Demand and Trade Area Analysis
Participation. SFIA's 2026 Single Sport Report puts 2025 US Pilates participation at 13.8 million, up 6.8 percent in a year and about 39 percent since 2020, against total US activity growth of 1.2 percent. Core participants (50 or more sessions a year) number 3.38 million, 85.7 percent of them women. Pilates was ClassPass's most-booked format for the third straight year, with reformer bookings up 71 percent.
The bankable cohort. Women aged 25 to 54 with household income of $100,000 or more: 70 percent of participants are women, participation peaks at ages 18 to 34, and 39 percent of participants (44.7 percent of core) live in $100,000-plus households. Core-participant age spread (roughly even across 25 to 54) supports suburban as well as urban sites.
Trade area convention. A 3-mile or 10-to-12-minute drive-time primary trade area in the suburbs, 1 mile in dense urban cores. Club Pilates' historic designated territory is up to about 50,000 people, roughly a 2-mile radius. Preferred co-tenancy is grocery-anchored or lifestyle centers with daytime traffic; avoid sites sharing parking with heavy evening-peak restaurants.
Saturation screen. Count every reformer studio in the trade area, franchised and independent, and flag any trade area carrying more than one 12-reformer equivalent per 15,000 women aged 25 to 54. The supply side is still growing into a decelerating comp base: Xponential guides 150 to 170 net new openings for 2026 and attributed part of its same-store decline to fill-in development, while new entrants (Pilates Addiction sold more than 200 territories in its first year) add further pipeline.
Franchisor Risk: the First-Order Variable
Xponential Fitness, primary-verified. FY2025: revenue $314.9 million, net loss $53.7 million, 341 gross openings against 140 closures (about 4.5 percent of open studios), a $22.75 million franchisee settlement and a pending $17.0 million FTC resolution. Q2 2026: revenue $66.0 million, down 13 percent; North America same-store sales down 6.8 percent, Club Pilates down 5 percent; cash and restricted cash of $25.0 million against $522.4 million of long-term debt. Its largest holder, Voss Capital (about 19.3 percent), demanded a sale in March 2026; the company retained Jefferies in April, three directors resigned, and the review remained open at the Q2 filing.
What each outcome means for a franchisee's lender. A whole-company sale transfers franchise agreements intact; the risk is fee and technology changes. A Club Pilates spin-out or royalty securitization is credit-positive for Club Pilates franchisees and negative for the remaining brands, which lose scale. Smaller brands sold to a lightly capitalized platform should be re-underwritten closer to independents. Parent distress leaves royalty obligations in place while support degrades, against collateral (leasehold improvements and reformers) with thin recovery value.
Precedents worth remembering. F45 Training IPO'd at $16 in 2021, delisted in 2023 near $0.18, and its plaintiffs alleged growth built on franchisees needing near-100 percent financing. Honors Holdings, Orangetheory's largest franchisee at 143 studios, defaulted on more than $100 million and landed in involuntary Chapter 7 in late 2024. The recurring failure modes are multi-unit operator leverage, seller paper and franchisor-encouraged maximum financing, all of which SOP 50 10 8.1's injection and historical-coverage rules now push against.
The lender's franchisor checklist (what MMCG executes in every studio study):
- Pull the current FDD from a state registry and tie out Items 7, 19, 20 and 21; aggregator summaries conflict.
- Underwrite to the Item 19 bottom-half average; show the median and mean for context.
- Compute three-year Item 20 attrition; flag anything above 5 percent a year.
- Read Item 21 for going-concern language, negative net worth and dependence on fees from unopened units.
- Review Item 3 litigation and any regulator matters; for Xponential, confirm the FTC resolution's approval status.
- Confirm Franchise Directory listing and addendum status against the current file.
- For a public parent, read the latest 10-K and 10-Q: leverage, liquidity, same-store sales, strategic-review disclosures.
- Call franchisees from the Item 20 exit list.
- Confirm reformer sourcing and whether used reformers can be resold outside the system.
- For acquisitions, confirm trailing 1.25x coverage, the independent valuation and the franchisor's transfer terms before commitment.
SBA 7(a), 504 and USDA Structures for Studios
- Loan size and the $350,000 line. A franchised Pilates studio at the Item 7 midpoint with 20 percent equity borrows about $570,000 to $600,000: a Standard 7(a). A yoga studio fits under $350,000 only with equity of 35 percent or more; for startups the Small Loan path still exists, but under SOP 50 10 8.1 it no longer exists for any change of ownership.
- Reformers inside or outside the 7(a). Financing the $129,000 to $170,000 equipment package inside the 7(a) is cleaner than a separate equipment lease, which adds a senior lien on assets with limited secondary-market value and complicates any workout. Modeled both ways, the split structure costs roughly 19 percent more in combined debt service.
- Equity and reserves. SOP minimum injection is 10 percent for startups; MMCG's studio standard is 20 to 25 percent plus a funded reserve covering the modeled Year 1 shortfall with a cushion, because base-case Year 1 coverage runs below 1.00x.
- Lease. Term plus options at least equal to the loan term, a landlord collateral access agreement, and the personal lease guaranty included in the global cash flow.
- Buying an existing studio under SOP 50 10 8.1 (loans numbered on or after 1 October 2026): 1.25x coverage on the last fiscal year or two-year average, historical or adjusted, with no reliance on projections; a 10 percent injection that cannot be waived, with Limited sources capped at half; an independent valuation on every change of ownership with debt capped at the valuation; a Quality of Earnings report at a $3 million purchase price; no Small Loan processing; full-standby seller debt countable within the Limited cap and refinanceable only after 36 months. A studio still ramping cannot be bought on its forward plan; the trailing year must carry 1.25x. The full acquisition framework is on the hub.
- 504 and USDA. A studio operator buying its condo or building can use 504 at general-purpose equity levels (our judgement for inline retail). Rural studios can reach USDA B&I where the area qualifies; see the USDA feasibility page.
Fees and Timeline
Studio feasibility studies typically run $4,900 to $9,500 depending on brand complexity and site count, delivered in 9 to 16 business days. Every study states its determination plainly: feasible as proposed, feasible as resized, or not feasible, with the resizing specified in dollars.
Frequently Asked Questions
What does a Pilates studio feasibility study include?
A trade-area demand and saturation analysis, a capacity and pricing build, a month-by-month ramp, a stabilized P&L reconciled to FDD disclosures, DSCR at the proposed structure and under stress, and a franchisor credit review. It is written to SBA and conventional credit standards.
Is a Club Pilates franchise bankable under SBA 7(a)?
At median performance, yes: the 2026 FDD reports a $978,300 median across 1,005 studios for FY2025, and the brand's SBA loss record is clean. The bottom quartile averaged $685,500, which may not cover debt service, so the site decides the credit, and the parent's condition belongs in the file.
How large is a typical SBA loan for a Pilates studio?
At the Item 7 range of $403,289 to $1,029,811 and 20 percent equity, most loans exceed $350,000 and are underwritten as Standard 7(a) loans over 10 years.
Can reformers be financed separately from the 7(a)?
Yes, but a separate equipment lease adds senior debt service and splits collateral with thin resale value. Financing them inside the 7(a) is usually cleaner and cheaper.
How long does a reformer studio take to stabilize?
Disclosed new-studio curves run from roughly $22,500 to $67,000 of monthly revenue (Club Pilates, month one to twelve) and $67,000 to $101,000 (JETSET). Plan Year 1 at about 80 percent of stabilized revenue with a funded reserve, and stabilization by Year 3.
Are yoga studios harder to finance than Pilates studios?
Usually. YogaSix's median was $468,417 (FY2024) at a much lower per-visit yield, so median-case coverage sits near 1.0x unless equity is higher or the loan smaller. Barre medians are lower still.
What DSCR does SBA require to buy an existing studio?
1.25x on historical or adjusted historical earnings for loans numbered on or after 1 October 2026 under SOP 50 10 8.1. Projections cannot satisfy the test.
Can I use a 7(a) Small Loan to buy a studio?
No. Change-of-ownership loans must be underwritten as Standard 7(a) loans at any size under SOP 50 10 8.1.
How does Xponential's situation affect my loan?
Lenders now review the parent's results (Q2 2026 revenue down 13 percent, $25.0 million of cash against $522.4 million of long-term debt), the pending FTC resolution and the open sale review, and they stress brand support under each sale scenario. We build that review into the study.
What trade area supports a reformer studio?
Roughly 50,000 people within about 2 miles under the brand's historic territory standard, with the bankable cohort being women aged 25 to 54 in $100,000-plus households. We flag trade areas carrying more than one 12-reformer equivalent per 15,000 women in that cohort.
Do independent studios have published benchmarks?
Not reliable ones. No association publishes audited unit economics, so an independent study rests on the operator's trailing book, a local price survey and franchise disclosures used as ceilings, with a 15 to 25 percent haircut against franchise medians for unproven operators.
How long does an MMCG studio feasibility study take?
9 to 16 business days from engagement and receipt of project documents.
Figures from 2025 and 2026 FDDs, SEC filings, SFIA 2026 reports and operator disclosures, dated in the text and last verified 5 October 2026. FDD figures cited from aggregators are tied to state-registry PDFs in every engagement. SBA loss statistics referenced are third-party computations from FOIA data, not official SBA rates.
Where we work
The same study, prepared to the lender requirements of the state the project sits in.
