Opening a Gym in Texas
Texas is one of the largest and fastest-growing fitness markets in the United States. The state's gym and health club industry generates $3.3 billion in annual revenue across more than 7,100 fitness businesses -- roughly one gym for every 3,500 residents. With a population exceeding 31 million and annual growth of nearly 400,000 people, Texas offers a demand pipeline that few states can match. The prime gym-membership demographic of 25-to-44-year-olds is especially strong here, and suburban expansion around Houston, Dallas-Fort Worth, and Austin continues to create underserved pockets where new facilities can thrive.
The cost structure favors operators. Commercial electricity rates run 20-40% below the national average thanks to a deregulated energy market. Retail lease rates for gym-suitable space range from $15 to $40 per square foot per year -- well under the national average of roughly $33 per square foot. Texas has no state income tax, though property taxes are among the highest in the country and get passed through to tenants on NNN leases. Build-out costs in the Southwest region trend lower than the Northeast or West Coast, and the state's pro-business regulatory environment keeps licensing friction manageable.
There is one major Texas-specific requirement that catches new gym owners off guard: the Health Spa Registration under Texas Occupations Code Chapter 702. Any facility selling memberships longer than one month must register with the Secretary of State and post a surety bond of $20,000 to $50,000. Miss this step and you cannot legally operate. This guide covers that requirement and every other permit, cost, and regulation you need to know before opening a gym in Texas.
Texas Gym Costs vs. National Average
| Commercial rent (per sq ft/yr) | ~$33 | $15–$40 | Austin highest (~$30/sf) with 3-5% vacancy. DFW $20-$29/sf. Houston ~$20/sf. San Antonio $18-$22/sf |
| Build-out per sq ft (mid-range gym) | $40–$60 | $30–$60 | Budget clubs $30-$50/sf. Boutique/higher-end $60-$200+. Southwest region trends lower than national |
| Commercial electricity (per kWh) | ~13.0 cents | 6.8–13.5 cents | Deregulated market allows rate shopping. Oncor territory (DFW) has lowest delivery charges at 4.19 cents/kWh |
| General liability insurance (annual) | ~$825 | ~$825 | BOP (general liability + property) averages $1,031/yr. Workers' comp is optional in Texas |
| LLC formation | $50–$150 (varies by state) | $300 | Filed with TX Secretary of State. No annual report fee. DBA costs $25 at SOS plus county filing fee |
| Health Spa Registration + Bond | N/A (Texas-specific) | $100/yr + $200–$2,500/yr bond premium | Surety bond of $20K-$50K required if selling memberships over one month. Bond premium is 1-5% of bond amount |
| Sales tax on memberships | Varies by state | 6.25%–8.25% | Memberships taxed as amusement services. Personal training and group classes (separately stated) are exempt |
Texas State Licensing & Permit Checklist
- File a Certificate of Formation (LLC) with the Texas Secretary of State -- $300 filing fee. Online filing available via SOSDirect
- Register as a Health Spa with the TX Secretary of State under Occupations Code Chapter 702 -- $100 per location annually. Required before selling any memberships
- Obtain a surety bond ($20,000-$50,000) or certificate of deposit as required by the Secretary of State -- mandatory if offering memberships over one month or on auto-recurring billing
- Apply for a Texas Sales Tax Permit through the TX Comptroller of Public Accounts -- free to obtain. Must include a copy of your Health Spa Registration certificate
- Obtain an EIN from the IRS -- free. Required to open a business bank account
- File an Assumed Name Certificate (DBA) if operating under a name different from your LLC -- $25 with Secretary of State plus county clerk filing fee
- Obtain a Certificate of Occupancy from your local municipality -- includes building official, fire marshal, and health inspections. Annual renewal required
- File for building permits for your build-out through the local municipality. Projects over $50,000 must have construction documents reviewed for Texas Accessibility Standards (TAS) compliance by TDLR
- If opting out of workers' comp (allowed in Texas), file Form DWC 005 with the TX Department of Insurance and post workplace notices in English, Spanish, and other appropriate languages
- Obtain music performance licenses from ASCAP, BMI, and potentially SESAC/GMR -- $500-$4,000+/year total depending on gym size. Or use a commercial music service that bundles licensing
- File the annual Franchise Tax Report and Public Information Report (PIR) with the TX Comptroller by May 15 -- even if no tax is owed (no-tax-due threshold is $2,650,000 in revenue for 2026)
- If adding a pool or spa, obtain permits from TX DSHS and local health department -- certified pool operator required with chemical testing logged every 2 hours during operation