Any seasoned fitness business owner can attest that situations you never could’ve predicted will inevitably arise over the years. From unexpected equipment issues to “that one member,” owning a gym is always an adventure.
Matthew Becker knows this all too well, as he often helps gym owners navigate these unexpected situations.
Becker is a gym owner, a lawyer and the owner of GymLawyers.com, a company aimed at educating gym owners about legal matters that impact their business.
And that sometimes includes situations where having the proper legal documentation would’ve solved an issue immediately. So Becker is emphatic about the need for legal contracts, agreements and waivers when owning a gym.
If you missed part one of this series, check out “Opening a Gym: The Four Legal Steps that Shouldn’t be Overlooked.”
Today, we’re diving into the three legal contracts you need as a gym owner. The goal is to set you on the right path, keeping your business protected for when the unexpected happens.
The Three Legal Documents Your Gym Needs
1. Membership Contract.
A formal membership contract simply outlines the agreement that your gym is making with your clients. It lets both parties know what to expect in terms of services, operations, gym membership pricing and billing.
Not only is it helpful from the customer service aspect of owning a gym, it also keeps you protected along the way.
Here are three crucial pieces to include in your membership contract:
- Services and Pricing. Indicate the amount the client will be charged, what that fee is for and how often they will be billed. It’s also a good idea to include cancellation and hold policies.
- Permissions. If you do an automatic withdrawal, you must request permission to execute that on whichever cadence you’ve agreed to. For example, if you bill $150 monthly, have them sign off to give approval. Or if a client purchases 10 personal training sessions, include information about your renewal policy.
- Local Legal Guidelines. Make sure your contract indicates your state’s contract law requirements. Oftentimes, this is where it’s helpful to hire a professional. Becker says that at Gym Lawyers, his team does the research and creates the contract, saving gym owners time, energy and stress.
2. Client Waiver.
One of the biggest mistakes Becker sees in owning a gym, when it comes to waivers, is thinking that generic will suffice. Fitness business owners sometimes find one online or use one that was given to them from another gym.
In fact, some gym owners neglects to even use a waiver, thinking, ‘What are the chances I’m going to get sued, anyway?’
Becker explained that generic waivers are usually not enough to protect the business from liability.
“The biggest mistake gym owners make is they just use some sort of generic waiver they found somewhere, or stole from their old gym,” he said. “And I have never seen one that is sufficiently adequate to actually protect the gym.”
In short, you need a waiver designed specifically for your fitness business, covering the specific risks your clients assume in your gym.
“A waiver is your first line of defense against an injury lawsuit,” Becker said.
He explained that there’s a difference between ordinary and gross negligence in the eyes of the law. For example, if there was gross negligence on the gym’s part, a waiver likely wouldn’t protect you. But if someone does hurts their shin on a box, the law likely considers this “ordinary” negligence, keeping the gym owner from being liable.
3. Staff Agreement.
When it comes to staff decisions in owning a gym, there are two different routes owners go: Employees or independent contractors. And in either situation, it’s crucial to have a legal contract that sets clear expectations.
First, it’s helpful to outline your expectations in hiring coaches. Include everything from what you expect them to wear when working to how early to show up before coaching a class. This way, you’ll avoid unexpected situations where staff is unclear as to how you intend to run your business.
Second, be sure to include these two compensation-related pieces:
Tax designation: Indicate whether a staff member is an employee that receives benefits or an independent contractor who does not. And subsequently, does their status require them to carry their own liability insurance? Include any specifics related to tax designation in this section.
Compensation: How much will you compensate your staff, and for what period of time? For instance, do you pay coaches hourly or by the class? Does anyone receive a salary or commissions? Clearly outlining the compensation model will prevent any confusion as you operate and grow.
Pro Tip: When it comes to your staff, PushPress can help with everything from payroll reports to scheduling and coach communication! Book a demo with our team today to find out more!
In Summary: Protect Yourself in All Phases of Owning a Gym
When it comes to all contracts and legal agreements, it’s important to be as clear and detailed as you can.
“You can’t leave any blank spots,” said Becker. “That way there’s no question. Missing one step in the process can really expose you to everything we’re trying to avoid.”
Make sure your gym is protected with a membership contract, client waiver and staff agreement. Avoid finding generic options online or borrowing from another gym. Hire a professional to help with any of the aspects you’re unsure about. That way, when unexpected situations arise in owning a gym, you’ll be ready.
