The economics of a small town pickleball club

Chris Koerner loves to talk about running businesses and is himself an investor in various ‘bricks and mortar’ businesses such as RV parks. But this time he’s gone under the hood of a pickleball club he stumbled across in Logan, UT.

The numbers are fascinating to read and Chris ends his piece by saying that pickleball is here to stay as he marvels at the potential profit margins on offer.

Obviously he’s had to make a lot of assumptions but even so, we found it a fascinating read and adds even more fuel to the fire of why pickleball is seemingly such a great investment at the moment.

“I just played here & did some digging.

City: Logan, UT - Pop: 54,436

Club: 24k sqft & 9 courts (Old Bed Bath & Beyond)

Cost: $99 - $225/month # of members: 2,000 Rent per square foot: $17/year = $34,000/month

Annual profit: This is where it gets tricky. I had to guesstimate # of members. I asked the person working there and she was ho hum. I asked if she had a thousand? "Oh, way more." So I guessed at 2,000.

The population in the whole valley is 133,000 so less than 2% of them being members isn't unreasonable. My cousin is a member and said it's ALWAYS PACKED. It sure was today at noon. It's open 108 hours per week and every court there had doubles playing.

100% capacity and 100% doubles 9 courts twice per week per person = 2,500 members.

But it surely isn't at 100% capacity. 80% capacity would be about 2,000 members. Plus ancillary revenue from events, equipment sales, etc.

If the average membership is $150/month then that's $300k/month in top line. That seems high, so let's say $200k/month. That's just a $2.4m/year business. Not crazy for a space so big. Maybe 1,500 members is more accurate.

Rent + CAM charges + utilities are prob $45k/month all in.

There were only 3 people working, while packed. If that is the case all day every day then monthly wages are likely $40-50k/month as well. Being conservative here.

I bet this location nets about $1.2m/year, and growing. Great margins. Very bare bones building. Almost no build out whatsoever. Not bad money for a small town like Logan.

It was pretty janky, too. Mom and pop vibe. It still looked like a bed bath and beyond (old slat shelving still there). I expected more from a reputable nationwide franchise. If I were going to do this I wouldn't buy into a franchise.

What's the point? People come here to play indoors, not for the brand. It isn't rocket science. I'd find a city of 100k+ that doesn't have a club and open my own brand. Marketing is kinda built-in as people need partners to play with. Free referrals! What do you think about my assumptions? Way off?

Pickleball is here to stay.

Update: I don’t think this location nets $1.2m/year. Their FDD states an average location is closer to $160k, but that’s after they take 10% off the top and is based on a very small sample size. I’d bet this Logan location does several times that amount, but is also abnormally higher than average. My assumptions didn’t account for seasonal churn. I think my rent and wages numbers were pretty spot on, however.