Should I Start an LLC for My Trampoline Park?

Starting a limited liability company (LLC) for your trampoline park can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a trampoline park, lawsuits can arise from things like safety disputes, personal injuries, and employment law disagreements.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your trampoline park seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for a Trampoline Park?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should form an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Trampoline Park

By starting an LLC for your trampoline park, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Trampoline parks will benefit from liability protection because of the risk of being sued for things like personal injuries, libel, and trademark infringement. While there are generally waivers that customers sign acknowledging risk of injury, there is also the risk of general injuries in and outside the facility.

Example 1: While performing a double backflip, a customer gets pushed and ends up severely injuring their neck. As a result, a lawsuit is filed against your trampoline park business, seeking medical damages. Regardless of the validity of the lawsuit, your business’s LLC classification will mean that you will not be responsible for personally compensating the claiming party with your assets.

Example 2: Your friend loans your business $100,000 in order to expand its trampoline park and hire a park manager to oversee all staff members. Since the loan was made between your LLC and your friend, your personal assets will not be used for repaying the loan if your business is unable to.

Example 3: While chasing a small child that’s running away from its parents, one of your park’s security guards falls down and fractures their elbow. If they were to file a lawsuit against your business in order to get their medical bills reimbursed, your personal assets would remain protected as a result of your limited liability protection.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Trampoline Park

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a trampoline park owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Trampoline parks rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

Business insurance can protect your trampoline park’s assets (e.g., trampolines, land, etc.) from a variety of different lawsuits. These include those that relate to IP law violations, employment disputes, and contract breaches.

You can also use business insurance to finance replacing your equipment in the event that it gets damaged.

Common Situations Business Insurance May Cover for a Trampoline Park

Example 1: The risk of your patrons colliding with another person on a trampoline or landing improperly while doing stunts on a trampoline is very high. If one or more customers become injured at the park and you are found to be negligent, general liability insurance will likely cover any damages.

Example 2: A child is running to keep up with their friends during a birthday party at the trampoline park and trips over a vacuum cord that is being used by an employee. If your business is sued to help pay for medical costs, general liability coverage will likely pay for damages.

Example 3: Your trampolines were checked and serviced last week, but a visitor has just started jumping in a section where a spring came loose, and they’ve fallen through a hole, injuring their leg. Even though you’ve been keeping up with maintenance, you are found liable for their injuries. General liability will protect your business in the event that you are involved in a lawsuit.

Other Types of Coverage Trampoline Parks Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all trampoline parks should obtain:

Workers’ Compensation Insurance

Your employees will work in an environment where they are at risk of becoming injured on the job. With workers’ compensation insurance, you can provide peace of mind for your employees with insurance that will help to cover medical costs and lost wages in the event that they are injured or become ill on the job.

Commercial Property Insurance

If you own the building that your trampoline park is located in, investing in commercial property coverage is a must. This type of insurance protects the building and covers any business-related items that are stored in the building in the event of an accident, natural disaster, theft, or vandalism.

Commercial Umbrella Liability Insurance

Even if you require visitors to your trampoline park to sign waivers, your business still has a responsibility to do everything it can to prevent injuries. If you are found liable for an accident at your park, the costs of a lawsuit can easily surpass the limits of your primary policies. Commercial umbrella liability insurance is designed to go above and beyond those limits to protect your business.

Data Breach Insurance

If you offer a loyalty program as an incentive for your customers, you are likely storing personal information such as addresses, phone numbers, and credit cards in your computer system. Data breach insurance will step in to protect your business and cover damages in the event that your system is compromised and sensitive customer information is stolen.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance, workers’ compensation insurance, and commercial property insurance.

Read our Indoor Trampoline Park Business Insurance article for more info.

The cost for starting a trampoline park averages in the low seven figures. This is because you will likely need a custom building; you will also need to find a good location with a large enough space to facilitate the development of your trampoline park.

When it comes to maintenance, your largest cost will likely be labor, rent, and business insurance.

Visit our How to Start an Indoor Trampoline Park guide to learn more about the costs of starting and maintaining this business.

Rent, maintenance, and payroll are the primary ongoing expenses.

Learn more about running a trampoline park.

A trampoline park charges guests to use the facilities for a specific period of time.

Learn more about starting a trampoline park.

A trampoline park provides an indoor location for individuals and groups to jump on trampolines. Just in the United States alone, there are now more than 500 trampoline parks. This industry is expected to continue to grow.

Profit potential for trampoline parks is good if you can cover the relatively high startup costs for this type of business.

Learn more about starting a trampoline park.