Fitness clubs have been harshly criticized for their customer service. Specifically, clients have shared horror stories of being contacted by collectors about a membership they thought had been cancelled. With this bad rap, fitness clubs must be thoughtful about their policies and make sure they are clearly communicated.The place to outline these policies is in the membership contract -- a legal document that defines the relationship between the gym and the client. It includes the rights and responsibilities for each party.
Creating the contract itself isn’t difficult. Simply look for a template online and embellish it as desired. Then -- and this is very important -- have a lawyer review your work to make sure it’s airtight. It’s easy and affordable to contract out the legal fine-tuning.
Respect your business
This element of the equation is mainly to protect the business from going under by avoiding lawsuits and ensuring a steady cash flow. You don’t want to be sued if someone gets hurt at the gym. It’s always possible that a renegade free weight breaks someone’s toe. These incidents are unfortunate, but shouldn’t turn into a lawsuit against your business. Therefore, you’ll want to include a “Release of Liability” provision—something like this:
“XYZ GYM shall not be liable for any injuries or damages to such person, nor the property of such person, nor be subject to any claim, demand, injury or damages.”
Further, you should make allowances for circumstances that keep you from fulfilling your end of the contract. For example, you may want the ability to close for one-off repairs, without having to issue refunds. Include this explicitly in the contract with a provision, such as:
“XYZ GYM reserves the right to close for inclement weather, repairs, holidays, other unexpected circumstances for up to three (3) days consecutively without issuing member refunds.”
With the fickle nature of people and exercise, it’s in your best interest to make quitting the gym undesirable. That way, folks are less likely to quit on a whim and cost you necessary cash flow. That said, some gyms go too far—making the cancelling process absurdly difficult. It’s reasonable to require clients cancel their membership in-person, even though a written request does feel outdated in our digital world. Whatever you choose, be sure it’s stated clearly in the member contract.
Respect your client
Member contracts should outline the member’s rights and responsibilities. A good contract will make the client feel both accountable and appreciated. It’s your first customer experience with them, so don’t shame them unnecessarily.
Also, be explicit about charges to client’s accounts—when and why they occur. It is standard to have a one-time enrollment and cancellation fees. Make these fees reasonable, based on the time spent to process such changes.
Further, some gyms have fines to incentivize good behavior. Some clubs charge clients if they sign-up for, but don’t attend a fitness class, or if their payment isn’t processed on time. While these fees can help offset costs, they may drive away potential clients. Again, make any fees reasonable and be sure to have a legitimate business reason for implementing them.
Further, there is the whole affair of membership plans. Here are some questions to consider, based on your cash flow needs and what your level of competition is:
- Month-to-month payment or longer cycles?
- Automated billing? Automatic renewal of membership?
- Refunds if the client decides to cancel? Under what circumstances?
- What happens if your business closes?
Find a good balance and then be sure to fine-tune the process so that no one falls through the cracks. Continuing to charge a client after they’ve cancelled their membership puts you at risk for bad reviews or worse, lawsuits.
Respect the law
Due to some historical poor practices, many states have implemented specific laws for fitness businesses. One such law is a probation period—3 days, for example—in which the customer is allowed to back out of the contract and get a full refund without cancellation fees. This protects them from pressured decision-making.
Another common law is a ban on “lifetime memberships” or any agreement that spans past, say, 3 years. This protects the customer from immense losses in case your business closes. To understand those relevant to you, visit your state’s Bureau of Consumer Protection website, or search the web for your state’s laws on health clubs.
Your focus as the owner of the business should be to figure out the gym’s policies around operations, equipment, payment and liability. These should strike a balance between the business needs and respect for your client to create a strong contract to protect both you and your members.