Buying a Hotworx franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 15 7(a) loans to buy an existing Hotworx (classified mostly as Fitness and Recreational Sports Centers), totaling $6.6M. The median loan was $359,000, 44% lower than the $645,250 median for all SBA-financed acquisitions. 6 of these loans were approved in the last two fiscal years.
The purchase agreement decides what you bought, not the loan approval.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Hotworx resale loans landed between $325,700 and $527,650.
- Lender experience exists. Citizens Bank alone has financed 3 Hotworx resales.
- Guaranty. The SBA guaranteed 76% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a Hotworx resale
The median SBA 7(a) loan for a Hotworx resale was $359,000 across 15 loans (FY2018 to FY2026). Citizens Bank, Pinnacle Bank and Paragon Bank have financed the most Hotworx resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
Hotworx acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 0 | $0 | - | |
| FY2019 | 1 | $348K | $348,000 | |
| FY2020 | 1 | $672K | $672,000 | |
| FY2021 | 1 | $359K | $359,000 | |
| FY2022 | 0 | $0 | - | |
| FY2023 | 3 | $998K | $331,400 | |
| FY2024 | 3 | $991K | $320,000 | |
| FY2025 | 2 | $1.2M | $589,250 | |
| FY2026 | 4 | $2M | $527,650 |
How often do these acquisition loans fail?
Fewer than 20 Hotworx acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
Terms signed in the LOI shape the purchase agreement that follows.
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Lenders financing Hotworx resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Citizens Bank | 3 | 20.0% | $2.1M | |
| 2 | Pinnacle Bank | 3 | 20.0% | $1.4M | |
| 3 | Paragon Bank | 2 | 13.3% | $716K | |
| 4 | First Harrison Bank | 1 | 6.7% | $491K | |
| 5 | Midwest Regional Bank | 1 | 6.7% | $424K | |
| 6 | Magnifi Financial CU | 1 | 6.7% | $355K | |
| 7 | b1BANK | 1 | 6.7% | $320K | |
| 8 | Byline Bank | 1 | 6.7% | $290K | |
| 9 | Bank OZK | 1 | 6.7% | $282K | |
| 10 | Kendall Bank | 1 | 6.7% | $247K |
States where Hotworx units are bought
Seller note standby terms and third-party consents are reviewed before closing.
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Questions buyers ask
How much do buyers borrow to buy a Hotworx franchise?
The median SBA 7(a) loan for a Hotworx resale was $359,000 across 15 loans (FY2018 to FY2026). The middle half of loans ran from $325,700 to $527,650. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Hotworx acquisitions?
Citizens Bank has made the most SBA acquisition loans for Hotworx (3, 20% of the total). Pinnacle Bank, Paragon Bank, First Harrison Bank follow.
What interest rate and term do Hotworx acquisition loans carry?
The average initial rate at approval was 9.07% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is a Hotworx resale riskier than other SBA-financed acquisitions?
Too few Hotworx acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are Hotworx units being bought with SBA loans?
Texas (6), Tennessee (2), Georgia (2), Louisiana (1), North Carolina (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
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Related
- All Fitness and Recreational Sports Centers acquisitions
- Texas acquisitions
- Tennessee acquisitions
- Georgia acquisitions
- Citizens Bank
- Pinnacle Bank
- Paragon Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Hotworx" (franchise code S2031). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.