Do you own a fitness center, gym, or martial arts studio in Texas?
If you’ve answered, “Yes” then you need to protect your business (and yourself) from unnecessary fines, penalties, and lawsuits with proper agreements. You may not know it, but Texas strictly regulates the fitness center industry. Whether you own a health club, fitness center, gym, or martial arts studio, your business must comply with the Texas Health Spa Act.
1. What You Need to Know About the Texas Health Spa Act
The Texas Health Spa Act is a consumer protection law designed to minimize risks for gym members and prevent the use of shady sales tactics. While you may not consider your business a “health spa” this law applies to all Texas businesses that offer memberships for instruction in or usage of a facility for physical exercise.
The penalties for non-compliance with the Act are nothing to take lightly. Not only does the Act allow for civil penalties (including actual damages, equitable relief, punitive damages, attorney fees, and court costs) you can be charged with a Class A misdemeanor! You can also face an investigation, lawsuit, and penalties with the Texas Attorney General — something that could destroy your business and personal finances.
Depending on statements made in your marketing materials and sales pitches to potential members, you could also be liable under the Texas Deceptive Trade Practices Act. All of these risks are on top of the threat of losing your state gym registration.
There are a number of requirements you will need to implement in order to comply with the Health Spa Act. First, you will need to register your gym with the State and you may need to post a surety bond. Then you need to ensure all members sign a written membership contract. These membership agreements must contain highly specific statutory language. This language is discussed in item #3 below.
2. The Types of Contracts You Will Need to Protect Your Business
To comply with state law and protect your business interests, you will need more than one type of gym contract. You will want a standard membership contract that complies with the Health Spa Act, as well as a Waiver, Release, and Assumption of Risk Agreement that protects you from member lawsuits. Because exercise always involves some risk of injury (especially if your member is not using the equipment properly) you want to protect your business from unnecessary personal injury lawsuits.
You will also want your members to sign a Media Release if you plan on taking before/after photos or any pictures of your gym/studio “in action.” Chances are you will want to include images in your marketing materials, so you want to ensure you have the appropriate permission from members to use their photos in any capacity. If you use personal trainers, you may even need a personal trainer contract as well between your business and your trainers (and possibly between the personal trainers and your members).
3. What You Need to Include in Your Texas Gym Membership Agreements
The Health Spa Act is lengthy and highly specific. Fortunately, there are some common fundamentals that will apply to most gym and martial arts studio owners.
Your membership agreement must state the term (or length) of the contract and Texas law prohibits terms in excess of 3-5 years (the term caps differ based on whether membership is financed through a retail installment contract).
You must also permit cancellation and detail the procedures for cancellation using the appropriate statutory language and provide for refunds under certain circumstances. This should include an option for members to cancel within three business days of signing the agreement and outline how refunds will be handled in the event of gym closure or the death/disability of a member.
If you pass finance charges on to members, you must outline these charges in your contract and include statutory language regarding a member’s legal claims and defenses. You also must provide a comprehensive list of all available membership plans upon a member’s request.
Last, but certainly not least, if you are pre-selling memberships prior to the grand opening of your fitness center, you must include language in your contract about the member’s rights if the gym doesn’t open or closes within 30 days.
As you can see, free gym membership contract templates you find online could put your Texas gym (and you personally!) at risk. Contracts that work for gyms in other states likely won’t comply with the Texas Health Spa Act. Plus you could run into intellectual property theft issues if you copy other contracts without appropriate permission.
Do You Need Help With Your Texas Gym Membership Contracts?
If you are unsure if you’re following Texas law or need gym membership agreements drafted for your business, it makes sense to discuss your options with an experienced business lawyer. Schedule a phone consultation with Attorney Mike Young today to ensure your gym or martial arts studio is protected.