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Health studios have become increasingly popular as Floridians have become more fitness-conscious. Joining a health club usually involves signing a membership contract and paying dues and fees. In the past, some health studios went out of business after collecting thousands of dollars in prepaid membership dues from consumers. Florida law now affords consumers protection against this type of problem.
The Health Studio Act, administered by the Florida Department of Agriculture and Consumer Services, requires non-exempt health studios to meet certain conditions to operate legally. It also provides for consumer recourse and includes penalties for businesses that do not comply with the law.
Health studios are required to register with the Florida Department of Agriculture and Consumer Services. In addition, some health studios also must post security for a limited time. By requiring health studios to provide a bond or other financial security, the Department can provide some financial protection to members of a health club that closes unexpectedly. The funds can then be used to compensate members who purchase long-term contracts.
Who is Exempt From the Law?
Certain health studios are exempt from the department's registration and security requirements. The following types of businesses are exempt:
- A bona fide nonprofit organization which has been granted tax-exempt status by the IRS.
- A gymnastics school which engages only in instruction and training and in which exercise is incidental to that instruction and training.
- A golf, tennis, or racquetball club in which sports play is the only activity offered by the club. However, if the facility offers exercise equipment, it is not exempt.
- A program or facility which is offered and is used solely for the purpose of dance, aerobic exercise or martial arts, and which uses no physical exercise equipment.
- Country clubs whose main purpose is socialization.
Who is Exempt From Posting Bond, but Required to Register?
The following types of health studios are exempt from the Florida Department of Agriculture and Consumer Services' bonding requirements:
- Health studios that sell contracts for future health studio services and collect direct payments on a monthly basis for services.
- Health studios that have been in business under the same ownership at any Florida location for a period of five years. This exemption applies to all current and future locations of an exempt health studio.
- Health studios that only sell membership contracts of 30 days or less without an option for renewal or any other condition that obligates consumers for longer periods of time.
Requirements for Health Studios
Health studios are required to comply with a number of regulations enforced by the Florida Department of Agriculture and Consumer Services. Each health studio must:
- Register each business location annually with the department.
- Pay an annual registration fee of $300 for each location. If required, post security in the form of a surety bond, letter of credit or certificate of deposit, for each location.
- Prominently post the proof of registration certificate provided by the Department at the registration or front desk of the health studio.
- Include the registration number issued by the Department in all advertisements, contracts and publications used by the health studio.
- Meet the registration requirements each time the studio changes ownership, corporate control or management.
The law protects consumers by registering health studios and allowing the Florida Department of Agriculture and Consumer Services to maintain a listing of all registered studios in the state. Consumers can check with the department to see if complaints have been filed against a health studio they may be considering joining. Consumers can also file complaints against a health studio with the department.
Consumers have the following rights when dealing with health studios. By law, health studios must:
- Notify consumers each time the studio changes owners, corporate control or management.
- Post a certificate of registration in a visible location within the business.
- Include their registration number in all contracts and advertisements.
- Refrain from offering a lifetime membership. This type of membership has been prohibited since 1979. Contracts signed prior to that date are binding on the original studio. If a studio has provided lifetime contracts and goes out of business, other health studios do not have to accept memberships of the defunct studio.
- Refund consumer's unused portion of their membership funds within 30 days if the consumer cancels their membership contract for any valid reason allowed under the law.
- By requiring health studios to provide a bond or other financial security, the Department can provide some financial protection to members of a health club that closes unexpectedly. The funds can then be used to compensate members who purchase long-term contracts.
Under the law, if long-term memberships are offered, the contract must contain the following consumer protections:
- It must allow for the contract to be canceled within three business days, excluding weekends and legal holidays. The member must give notice in writing, either mailed or hand-delivered within three days of signing the contract.
- The contract must have a provision for the cancellation and refund of the contract if the studio goes out of business, or moves its facilities more than 5 driving miles from the business location designated in such contract and fails to provide, within 30 days, a facility of equal quality located within 5 driving miles of the business location designated in the contract at no additional cost to the member.
- The contract must have a provision that if the studio goes out of business, or if the location is moved more than five driving miles from the present location, it will provide an alternate facility under the same ownership at no additional cost to the member. Otherwise, consumers have the right to cancel the contract. A studio is considered to be closed if it closes for more than seven consecutive days, or for more than two periods of seven consecutive days in any calendar year.
- The contract must also have a provision that if a member dies or becomes physically unable to use the facilities, a contract can be canceled and a refund issued for the unused time.
- The contract may not obligate the consumer for a period longer than three years, although it may provide for annual renewal.
- If the health studio is not required to post security, the contract must include a disclosure statement advising the buyer of that fact and of the risks of paying for more than 1 month in advance.
- A provision advising the buyer to contact the department for information within 60 days should the studio go out of business.
How to Protect Yourself - Joining a Health Studio
It is important to know what services are provided by different clubs because all health studios offer a variety of membership options. Consumers should ask the following questions before signing a membership contract:
Is the health studio registered and bonded with the Florida Department of Agriculture and Consumer Services?
Although health studios must be registered with the Department, some health studios are exempt from the bonding requirements.
What does the health studio have to offer?
Different studios may offer different amenities, exercise programs, equipment and hours of operation. Be certain that the health studio you select can fulfill your needs and provide a satisfactory environment.
Are qualified staff present to instruct clients properly?
Look past the aesthetically pleasing environment. There is no state licensing of instructors, so gauge their qualifications before joining.
How long after joining will the health studio's staff provide guidance?
In some health studios, the sales staff may be more motivated to sign up new members than to provide continuing help to current clients.
Will the health studio allow prospective members to exercise for at least a week on a trial basis, or are guests subjected to pressure from sales staff?
Consumers should shop around and not feel pressured into joining on the spot.
Who owns the health studio?
Determine the ownership of the health studio by asking if it is a franchise or independently owned, and if it is in leased space or a company-owned building. A lease operation is much easier for a club owner to close and abandon.
Does the health studio limit membership?
Many clubs do not set a cap on the number of members, leading to crowding at certain peak times.
What is the health studio's track record?
Call the Florida Department of Agriculture and Consumer Services toll-free at 1-800-HELP-FLA (435-7352) to check if complaints have been filed against the business.
If a Health Studio Closes or Moves
Under Florida law, a health studio is not considered out of business when temporarily closed for repairs and renovation of the premises if it closes for seven (7) consecutive days and no more than two periods of seven (7) consecutive days in any calendar year. If the health studio is out of business, members may cancel the contract by providing notice of cancellation to the health studio, in writing. If the contract is being financed, a copy of the cancellation letter should also be sent to the finance company.
If a health studio moves its facilities more than five (5) driving miles away from the business location designated in its members’ contracts, the health studio has thirty (30) days from the date it moves to designate for its members, at no additional cost to the members, an alternate facility of equal quality located within five (5) driving miles of the business location stated in its contracts. If the moving health studio timely designates another facility of equal quality (the offered and available equipment, facilities, and health studio-related services are similar, and are offered or are available on the same days at the same times) located within five (5) driving miles of the business location designated in its contract with the members at no additional cost to the members, the members’ contracts are considered valid and the health studio may enforce them. Members, who choose to join another health studio before the thirty (30) days have passed, run the risk of owning and being liable for more than one membership. If the health studio does not provide an alternate facility of equal quality within the thirty (30) days after having moved, the members may cancel their contracts by notifying the health studio, in writing. If the contract is being financed, a copy of the cancellation letter should also be sent to the finance company. Members should not cancel their contract until thirty (30) days have passed.
If the health studio has a security on file with the department and does not cancel the contracts or issue refunds, the members may file a claim with the Department of Agriculture and Consumer Services. Claims must be filed on the Department’s form.
Members may request a Claim Form from the Department at (850) 488–2221 or 1-800-HELP-FLA (435-7352). For claims to be considered, member(s) MUST provide with the claim form: a legible copy of their contract; and the proof of payment, (i.e., front and back of canceled check, credit card statement, or health studio receipt).
To File a Complaint
To find out if complaints have been filed for a specific health studio, or to file a complaint, call the Florida Department of Agriculture and Consumer Services toll-free at 1-800-HELP-FLA (435-7352).