It seems that the mere mention of gym membership contracts is enough to send any die-hard CrossFit enthusiast into a tailspin. Throughout the years, gym contracts have gotten a bad rep due to confusing language, problematic billing and cancellation procedures, complex liability terms, and more. As undesirable as contracts may seem to some, they are one of the most important considerations fitness professionals should have to protect themselves and their clients.
Whether you’re a long-time CrossFit gym owner or new to operating an Affiliate, here are some key things gym owners need to know about gym membership contracts.
- Gym Membership Contract Definition
- Having Gym Membership Contract: Why it’s Important
- Types of Gym Membership Contracts
- Contract Details of Gym Membership
- Contract Membership Termination Details
- Avoiding Disputes and Maintaining Positive Relationships with Members
- Gym Membership Contracts: Creating Effective and Legally Binding Agreements
Gym Membership Contract Definition
By definition, a gym membership contract is a legally binding agreement between the facility (facility owner) and its members. However, it is not the same as a traditional business contract. Gym membership agreements are based on the terms and conditions of business owners and the benefits or services they offer. While this may seem like a bad arrangement for customers, it’s not. Keep reading to find out why.
Having Gym Membership Contract: Why it’s Important
Most gym membership agreements are mutually rewarding to both parties. Smart fitness professionals know that good contracts are structured to minimize risks and liabilities for both members and gyms.
Although verbal contracts are just as legally binding as written ones, the burden of getting all contractual parties to uphold their obligations is problematic. Not everyone is honest, verbal agreements get broken all the time between family members, friends, and, even CrossFit gym professionals and clients. It’s practically impossible trying to prove in a court of law any violations of verbal deals and contracts without documentation or evidence.
Gym membership contracts are documents that serve as proof of the terms and considerations in place to protect all parties from issues arising from enforcement.
Before owners get too excited about opening day, they should create a legally enforceable membership agreement that sets clear expectations for all involved, dispute resolution criteria, and offers protection from gym liabilities. An extra benefit for gym owners is that contracts make it easier to manage revenue streams, frequency, and forecasts.
Types of Gym Membership Contracts
Before anyone starts dictating terms, it’s helpful to know the different types of gym membership contracts.
Monthly Memberships
The oldest and most popular gym contract structure is monthly. Members agree to the gym’s terms to reap the benefits of membership as long as they pay a predetermined fee every month. Many gym goers prefer monthly memberships because of their flexibility and affordability.
Annual Memberships
Yearly memberships require members to accept and pay a one-time amount to use the gym and its services and amenities every 12 months. This is an economical choice for some members who prefer to focus more on their fitness and health goals at a gym without the inconvenience of multiple payments.
Pay-As-You-Go Gym Contracts
This type of gym membership contract provides fitness-minded individuals with the flexibility and convenience of working out and utilizing the gym and its offerings whenever they want without a monthly or annual commitment. Membership fees are paid per visit.
Pre-Paid Gym Membership Contracts
Prepaid memberships are paid upfront for a certain number of visits or sessions at the gym. This is a popular marketing ploy that targets people who go to the gym when the mood suits them or are not ready to become longer-term members.
Contract Details of Gym Membership When creating gym membership contracts, it’s necessary to include the following elements:
Duration – Contracts should clearly outline the dates and duration of the enforceability for all contractual parties.
Services – Include details about the type and scope of gym services provided, and member behavior and obligations to prevent any misunderstandings or disagreements.
Payment Provisions – Gym membership contracts should clearly define payment amounts, dates, and frequency.
Personal Identifying Information for all Parties – Gym agreements should include the name, address, phone number and other pertinent contact information of all parties.
Refund and Cancellation Policy – Although gym membership agreements are effective for the dates specified, life happens and sometimes cancellations are unavoidable. Businesses cannot withhold payments or funds for services not rendered or provided, especially when refunds and cancellations are requested by members. Business owners can protect themselves and their revenue by adding stipulations for cancellations and refunds to prevent misunderstandings and issues later down the road.
Signatures – Before any contract is valid, all involved parties must sign it to show their acknowledgement, understanding, and adherence. Gym membership contracts are not legally binding or enforceable until it has the required signatures.
Contract Membership Termination Details
All gym membership contracts should have a termination clause. Not only does this portion of the agreement clearly define the actions necessary for termination or cancellation, but it also serves as evidence should things go awry, and litigation become necessary.
Below are some considerations to include in the termination clause of gym membership agreements between gyms and customers.
Written Notice – The written notice is documentation that gym owners and members should keep for their records. The notice should include information on each step of the termination process. In the event of termination by any party, it is necessary to provide written notice that can be sent via email or certified mail.
Gym Membership Card Returns – Many gym owners require members to return their membership cards as part of the termination process. Sadly, not everyone abides by this provision. To prevent issues, gyms should maintain records of the date, time, and staff member responsible for accepting membership card returns.
Billing – Gyms should provide clients with a detailed breakdown of any outstanding charges and all payments received up to the date of termination and maintain copies for their business records.
Breaches and Resolution – Contract breaches and violations are common and, in many cases, avoidable when contracts clearly define what constitutes breaches, the steps necessary to cure them, and the consequences if members fail to comply with their contractual obligations.
Avoiding Disputes and Maintaining Positive Relationship with Members
Gym membership contracts are essential because they help eliminate confusion and establish communication between gyms and members. When problems occur, all parties should be able to refer to their contract for everything they need to know to handle disputes and negotiate resolutions, keep track of all obligations and expectations, document concerns, and maintain a healthy and mutually rewarding relationship.
Gym Membership Contracts: Creating Effective and Legally Binding Agreements
The key to creating enforceable gym membership contracts is to use professional, easy to understand language that explains the effective dates, services, obligations, and all other pertinent details to prevent confusion, breaches, and other consequences.
It’s important to update contracts occasionally but making too many changes or revisions can backfire and potentially turn off clients. It’s best to only revise gym membership contracts when absolutely necessary, such as when membership fees, gym services, or member obligations change.
Before utilizing any member agreements, fitness professionals should have them reviewed by a local business attorney to ensure everything included is legal and enforceable in their jurisdiction. This is also vital to ensure that gym owners are not putting themselves at a disadvantage should issues or litigation arise.
Key Takeaways
Good gym membership contracts should be favorable to all parties and are structured in a clear and easy to understand manner. They should also include the above terms and conditions to minimize membership and revenue loss and liabilities. All fitness professionals should know the ins and outs of their contracts before they open their doors or start accepting clients.
Contact CrossFit RRG today to learn more about resources fitness professionals can use to protect themselves, their businesses, and their clients.