When I speak with Texas gym owners, a common question that comes up is…
“What happens when a gym member decides to quit paying?”
Too often the answer to that question depends upon whether the gym owner is complying with the Texas Health Spa Act.
Because if you own a Texas gym and are violating this particular law, your membership contracts are void. Don’t just take my word for it. Here’s the language from the actual law.
The membership “contract is void if:
(1) the contract or an assignment of the contract does not comply with this chapter;
(2) the seller does not hold a certificate of registration issued under this chapter at the time of contract; or
(3) the purchaser enters into the contract in reliance on false, fraudulent, or misleading information wilfully provided by, or a false, fraudulent, or misleading representation, notice, or advertisement wilfully made by, the seller or the health spa owner or operator.”
Although there are sleazy sales tactics out there that violate the third provision, most Texas gym owners screw up by (1) not using a membership agreement that complies with the law and/or (2) not properly registering their gym with the state (Health Spa Act registration is separate from setting up a Texas corporation or limited liability company).
So, what’s this mean?
If you’ve had 250 gym members sign void contracts all of them can walk away at any time and quit paying you. And they’ll probably tell other members to do the same thing.
What would you do if even 20% of your members decided to quit and walk? And you couldn’t enforce your agreements to get paid?
Don’t put yourself in this position. Comply with applicable law…and that include the state’s health spa act, biometrics law, and other legal requirements for owning and operating a gym in the Lone Star State.
If you need help bringing your Texas gym into legal compliance, the first step is to set up a phone consultation with Business Lawyer Mike Young.