A provision in Tennessee's new alcohol law could trigger higher licensing costs for gyms and studios that serve food.
Most Tennessee gym and fitness studio owners haven't heard of HB1652. But if your business holds a license to serve alcohol—or is thinking about adding a cafe, smoothie bar, or food service—this bill contains a buried provision that could affect your annual costs starting May 22, 2026.
Here's what you need to know.
HB1652, signed into law on May 22, 2026, amends Tennessee Code Annotated Title 57 to create new categories of private clubs and restaurant-hybrid licenses for alcohol service. Buried in Section 11 (viii) on Page 5 is a provision that directly affects fitness businesses: any establishment licensed under these new categories must pay an elevated renewal license fee if food revenue does not exceed alcohol revenue.
In plain terms: if your gym sells more alcohol than food in a given year, you'll owe a higher renewal fee when your license comes up for renewal.
This applies to fitness studios, gyms, and wellness centers that:
If you don't serve alcohol, this doesn't apply. If you serve alcohol but your food revenue stays at or above your alcohol revenue, you avoid the elevated fee.
License renewal fees are a predictable, budgeted cost. This provision makes that cost variable and tied directly to your revenue mix. A gym that generates strong alcohol sales from a small bar or post-workout beverage program could face an unexpected increase in annual licensing costs—a recurring obligation that affects cash flow and business planning.
The fee structure creates a financial incentive to either increase food revenue or reduce alcohol service. For some studios, that's manageable. For others, it could reshape how they think about ancillary revenue streams.
Review your current or planned food and alcohol service model. If you're licensed or planning to be licensed under HB1652's new categories, calculate your food-to-alcohol revenue ratio. Understand that starting May 22, 2026, this ratio will directly affect your renewal costs.
If you're considering adding food service or alcohol service, factor this provision into your financial projections. The math of whether a bar or cafe makes sense for your business just became more complex.
Contact the Tennessee Department of Revenue or your local health department for clarification on how food and alcohol revenue are defined and calculated for renewal purposes—definitions matter when fees are on the line.
This explainer is based on HB1652, signed May 22, 2026, Section 11 (viii), Page 5. A detailed, business-specific guide for Tennessee fitness operators is available through the Tennessee Fitness & Wellness Association.