Financing a Club Pilates Studio
SBA 7(a) at the $385,048–$839,058 Investment Level
SBA 7(a) Loan Structuring
The 2025 FDD places Club Pilates’s initial investment at $385,048–$839,058. That range covers everything from a lean buildout in a favourable market to a premium location with higher construction and equipment costs. Most SBA-backed franchise loans for Club Pilates will fall within this band.
An SBA 7(a) loan at this level typically requires an equity injection of 20–25% of the total project cost. On a $600K midpoint project, that means $120K–$150K in cash or unencumbered assets from the borrower. The SBA does not set a fixed percentage — the lender does, based on the borrower’s credit profile, liquidity, and the franchise’s risk category — but 20–25% is the practical floor for a franchise acquisition at this investment level.
Debt Service Against Revenue
At the system-wide average gross revenue of $984,270 (2024, per the 2025 FDD), a buyer needs to model whether the studio can service its debt after franchise fees and operating costs. A rough framework:
- Gross revenue: $984,270 (system average, 2024)
- Franchise fee load (~12%): ~$118,112
- Revenue after fees: ~$866,158
- Operating expenses (rent, instructors, insurance, utilities, marketing): varies by market, but typically 55–70% of gross revenue for boutique fitness
- Estimated cash available for debt service: $150K–$290K, depending on the cost structure
An SBA 7(a) loan of $480K (80% of a $600K project) at 10.5% over 10 years carries monthly payments of roughly $6,500, or about $78K annually. That is serviceable against the revenue range above, but it leaves little margin at the Q4 average ($686K) after fees and operating costs. For a detailed walkthrough of how fees affect your debt service capacity, see our fee load analysis.
Capital Stack
Typical capital structure for an SBA-backed Club Pilates franchise. Exact split depends on borrower credit profile and lender requirements.
The FTC Settlement and Lending Appetite
On 18 March 2026, the Federal Trade Commission announced a proposed stipulated order against Xponential Fitness, Inc. — Club Pilates’s parent company — alleging Franchise Rule violations. The FTC alleged that Xponential brands, including Club Pilates, made misleading financial performance representations to prospective franchisees, told buyers studios typically opened within six months when the typical experience was over a year “if they opened at all,” failed to disclose executive litigation, omitted closed-franchisee names from disclosure documents, and did not always deliver the FDD at least 14 business days before signing. The order included a $17 million payment for consumer redress. Xponential neither admitted nor denied the allegations.
For a prospective franchisee seeking financing, the question is practical: does this affect your ability to get a loan?
What the SBA Rules Say
The SBA’s Standard Operating Procedure (SOP) does not automatically disqualify a franchise system that has been the subject of an FTC enforcement action. The SBA maintains a Franchise Directory of systems eligible for SBA lending, and Club Pilates remains on it. As long as the system is listed, the SBA guarantee is available in principle.
What Lenders Actually Do
The SBA guarantee is necessary but not sufficient. Each lender has its own internal risk committee and its own franchise evaluation process. Some lenders maintain internal “watch lists” for franchise systems involved in regulatory actions, litigation, or rapid ownership changes. The practical effects may include:
- Tighter equity injection requirements — a lender that would normally accept 20% may ask for 25% or 30%
- Additional documentation requests — expect questions about the FTC matter, the proposed stipulated order’s terms, and how it affects the franchise system
- Longer underwriting timelines — the lender’s credit committee may require senior sign-off on franchise systems with open or recently resolved regulatory matters
- Some lenders declining the deal entirely — not because the SBA bars it, but because their internal risk appetite does not accommodate it
None of this means you cannot get an SBA loan for a Club Pilates studio. It means you may need to shop more lenders and be prepared for the FTC matter to come up in every conversation. Have a clear, factual answer ready: the FTC alleged certain practices, Xponential entered into a proposed stipulated order, Club Pilates remains on the SBA Franchise Directory, and the franchise agreement you are signing post-dates the settlement.
Key Distinction
The FTC action targeted Xponential Fitness, Inc. — the corporate parent — and five of its brands, not individual franchisees. The alleged practices related to franchise sales and disclosure, not studio operations. As a franchisee, you operate under the franchise agreement, and the proposed order’s requirements primarily govern how the franchisor may represent the opportunity to future buyers.
Ask your franchise attorney to walk you through the proposed stipulated order and identify which provisions, if any, change the operating requirements in your franchise agreement.
The Sale Process Question
In April 2026, Xponential Fitness retained Jefferies LLC to explore strategic alternatives, including a potential sale of the company. As of this writing, no transaction has been announced and the process may or may not result in a change of ownership.
For a prospective Club Pilates franchisee, this raises a set of questions that have no definitive answers yet but are worth understanding:
What Change of Control Means for Franchise Agreements
Most franchise agreements include a change of control provision that addresses what happens when the franchisor itself changes hands. The specifics vary, but the general framework is:
- Your agreement survives the sale. A franchise agreement is a contract. An acquirer steps into the franchisor’s shoes and inherits its obligations to you. Your territory protection, fee schedule, and renewal terms do not change because the parent company has a new owner.
- The acquirer’s strategy may differ. While the contract survives, the acquirer may change things that are within the franchisor’s discretion — marketing direction, approved vendor lists, technology platforms, brand positioning. These do not require your consent if the franchise agreement gives the franchisor discretion over them.
- Renewal terms may differ under a new owner. Your current agreement is locked in for its term. When it comes up for renewal, the terms offered may reflect the new owner’s priorities. This matters most for franchisees signing a new agreement now, because the owner at renewal time may not be the owner at signing time.
The Lending Angle
A pending or rumoured sale adds another variable to the lending conversation — for a deeper look at what the sale process means for your loan, see our full analysis. Some lenders will pause or slow-walk franchise deals while a sale process is underway, not because the borrower is a worse credit risk but because the lender cannot evaluate the franchisor’s future direction. If Xponential is acquired by a private equity firm that increases royalties or reduces marketing spend, the borrower’s cash flow projections change — and the lender underwrote the old projections.
Other lenders will proceed on the basis that the existing franchise agreement controls and the sale is the franchisor’s problem, not the franchisee’s. The split tends to track lender size and franchise lending experience: banks with dedicated franchise lending desks are more comfortable underwriting through corporate transitions than community banks doing their first franchise deal.
What to Ask
If you are entering the Club Pilates system while a sale process is in progress, three questions are worth raising with your franchise attorney:
- Does your franchise agreement include an assignment or change-of-control clause? Read it. Understand what the acquirer can and cannot change.
- What happens to the brand development fund? A 2% brand development contribution is real money. If the new owner redirects those funds, your local market may feel the difference.
- What is the renewal language? If the agreement is 10 years and the sale closes in year 1, you are renewing under whoever owns the system in year 10. Know what leverage you have at renewal.
None of these questions should stop a deal on their own. Every franchise buyer is, to some degree, betting on the franchisor’s future management. A pending sale simply makes that bet more visible and the uncertainty more concrete.
A Note on Independence
Franchise Financing Guide is editorially independent of Club Pilates, Xponential Fitness, and the franchise brokers who sell Club Pilates territories. We receive no referral fees from Club Pilates or its broker network, and our analysis is not reviewed or approved by any franchisor before publication.
Capital advisors that specialise in franchise financing, such as Lendesca, can model the debt service at this investment level and walk you through SBA eligibility, equity injection requirements, and the practical impact of the FTC matter on your specific lending situation. We recommend working with a lender or advisor who has closed SBA franchise deals before — the franchise-specific underwriting requirements are different from a standard small business loan.