5 Legal Traps To Avoid When Starting Your New Gym

Opening any small business opens you up to the possibility of a lawsuit.  That’s just the fact of business.  Luckily, you will be getting insurance to help shield you from some of the potential damages a lawsuit might bring – but it’s always best practice to set up your business to be as bulletproof to lawsuits as possible.

We spoke to Vaughn Vernon of AffiliateGuard to find out what some of the common lawsuits people see in gym ownership, where they stem from, and how to protect yourself from them.

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Landlords and Leases

I see so many issues where misunderstanding or assumptions on a lease caused serious damage to small gym owners every year.  Get yourself a lawyer when signing a lease and save yourself some future headaches.

Vaughn Vernon, AffiliateGuard

When it comes to your lease and dealing with your landlord, Vaughn strongly advises all potential gym owners to hire a solid attorney.  Leases are often complex legal documents that can contain carve outs, exceptions or clauses that can really impact your business down the road.

Generally, leases are just boilerplate documents, where your particulars are inserted into pre-filled out legal documents.  As a result, it’s generally easy for a seasoned lawyer to spot out any weird things slipped into the lease.   These things would not be so apparent to you.

Utility or Maintenance Fees

• Often termed “NNN” or “CAM” fees, these share the burden of things like gardening, maintaining common areas, trash and utilities, and the such.
• If included, make sure you understand and agree to how much those fees are and what they money is being used for.
• The danger with NNN fees is it allows the landlord to upgrade the business, often at their discretion, on your dime.  Repainting, re-roofing, resurfacing parking lots, and other expensive upgrades marginally affects your business, but massively affects their ability to rent units (and you’ll be paying for it).
• These fees can also include things like property tax and insurance.
• If you are sharing the operational costs of the building, make sure you understand what you are paying for and where the money is going.

Rent Increase Schedules

• It’s common for rents to increase over time.  Generally, they will be drawn out in your lease as a schedule of increases that will kick in on certain timeframes.
• Understand what your rent increase schedule is, when they kick in and how much they are (both in percentage and absolute amounts).
• Your real estate agent or lawyer should know the average rent increase in your area.  Make sure the rent increases you are agreeing to are in line with your area.

Repair/Infrastructure Exclusions

• When it comes to building infrastructure repaid and upkeep, understand what you and your landlord are liable for.
• Generally speaking, landlords must take care of the walls and roof and utilities.
• Check your lease other important infrastructure and repair language.  It’s always best to know who’s responsible for what, should the need arise.
• Common things to check for are bathrooms/plumbing, air conditioning, internal ceilings and ducting, sprinkler systems, and electrical.

Noise Restrictions

• This has become a hotter topic lately, especially in gyms using free weights.
• Make sure your lease does not have excessive noise restrictions written into the lease.
• Many leases will get around this with a “nuisance clause” – which will allow the landlord to evict you if you cause your neighbors distress through operation.
• Regardless of a noise clause in your contract, you still have to comply with all city noise ordinances.

Use and Hours of Operation Restrictions

• Similar to potential noise restriction clauses in your lease you’ll want to scan for any restrictions on the hours you can operate or what type of business you can run from your location.
• Regardless of an hours of operations clause in your contract, you still have to comply with all city ordinances.

Any Abnormal Lease Clause

• Your lawyer and real estate agent should be able to see these immediately.

Waivers

In every lawsuit we see, the client waiver is the the first line of legal defense we have.  Make sure yours is rock solid.

Vaughn Vernon, AffiliateGuard

Make sure you have a solid waiver that your attorney approves of.  There are countless ones online you can find by googling, but unless you know the source of the waiver do not use it. It literally could have been written by someone’s second cousin who’s a first year law student.

Every person who puts a foot on your gym floor should have a waiver signed and filed.

Free Waiver Templates

AffiliateGuard, as a free resource, offers lawyer written and approved waivers for download.  Use this as your paper waivers or to form the basis of a digital waiver – your choice!

Get Your Waiver

Paper Waivers

Paper waivers are more convenient if you don’t have processes in place.  It’s simple to whip out a paper waiver from a filing cabinet and have someone sign it.

Where paper waivers generally fail are when they actually matter.  If you have been in operation for 5 years you will likely have upwards of 1,000 waivers in a filing cabinet.  Unless you are vigilant about filing, the chances of you finding that waiver in the event of a lawsuit are slim to none (or you will spend 8 hours digging through paper looking for it).

Paper waivers are susceptible to loss, theft, water or fire damage which would leave you without your first line of defense against a lawsuit.

Electronic Waivers

Due to the emergence and popularity of electronically signed documents, these present a viable option for gym owners now.

Digital waivers are potentially less convenient up front, if you don’t have the proper systems and processes in place to get waivers presented to and signed by your customers. (Don’t worry PushPress clients, our digital documents system is so well thought through, you won’t even know it’s running).

UETA and E-SIGN Compliance

Digital waivers also need to make sure to comply with some important laws  (ESIGN, UETA) to be considered valid.  Again, PushPress clients, we got you covered, our documents are all E-SIGN and UETA compliant.

Where digital waivers might lack in upfront convenience, they make up for in all other ways:

1. They can be virtually assigned to each customer for easy retrieval and records keeping.
2. Digital documents can be stored securely in cloud systems to keep them safe from any physical disaster.
3. If your software handles them correctly, they cannot be lost or stolen.

PushPress handles all storage, retrieval, and security around your documents for you automatically.

Injury

When in doubt; Injury form – fill it out.

Vaughn Vernon, Affiliate Guard

If you think there’s any chance of injury, take down an official injury report immediately.   Record the following information:

• Class Day/Time
• Coaches on duty
• Movement /Action that caused the injury
• Customer statement on injury (why, when, where, how, who, etc).
• Coach statement on injury (why, when, where, how, who, etc).
• Any medical attention required or declined, if any.

The more quality information you can record surrounding the details of the injury, the better.  Send all injury reports to your insurance provider so they can keep it on file.

Negligence

Most lawsuits attacking your business will be focused on the concept of negligence.  Simply put, this is a situation caused by you or your business that caused the person to get injured above and beyond simply participating in your gym activities.

Samples of negligence would be:

• Creating an environment which caused an injury, like leaving equipment out in dangerous / unexpected places.
• Having a coach push someone without experience to know better well beyond their limits.
• Failing to establish or follow safety protocol.
• Having a coach not paying attention to the class while coaching.

Battling Negligence

Sometimes when people get hurt, they lie about the root cause of it.  Unfortunately, when this happens it’s up to you to prove that they are misrepresenting the facts.  The most common lawsuit brought isn’t for an injury itself – it’s because an injury was caused because the gym was being negligent.

The best way to battle negligence is simply NOT be negligent.  Keeping your gym out of the risk of negligence generally means you have to have the foresight and diligence to setup and enforce protocol and expectations in your gym:

• Equipment is always put away, if not by members, then by staff.
• Coaches are never distracted.
• Coaches get enough information on customers to make the correct coaching cues, and if they don’t possess this information, they always favor safety.
• Customers go through a proper on-boarding process which teaches safety, protocol, and movements.
• You don’t overcrowd classes.

Beyond these systems, you can also prepare for potential negligence lawsuits by having information systems in place that can defend your case of being properly prepared.

• Keep well documented and available certifications, accomplishments and length of coaching for your coaches.
• Buy and maintain video surveillance systems to provide video evidence of incidents.
• Keep track of workouts performed by your members. Knowing their history and performance in previous, similar workouts can prove they had a strong working knowledge of a movement they might be claiming they did not.
• Make your customers check-in to your facility.
• Document and preliminary movement assessment and on-ramp/beginners program.

All of the above will help you present a case telling of the customer’s past breadth of experience in your gym, with your coaches, and doing the movements that they claim caused injury.

Dogs In The Gym

With all the cannons pointing at you from a legal standpoint, why stand up a couple more?  Keep the dogs at home and save yourself yet another potential liability.

Vaughn Vernon, AffiliateGuard

When you’re talking about being a professional gym and creating a professional environment, there’s only one answer to this – leave the dogs at home.  We understand everyone loves their dogs, but with all the potential problems you face why invite more into your business?

Put simply, dogs are an X-factor that you have zero control over. Whether it’s a potential bite situation or a dog crossing paths with someone on your gym floor causing a trip and fall – there’s way too many potentially bad outcomes at risk.

Kids In The Gym

While dogs in the gym is a relatively simple problem to fix, kids in the gym is a harder one.  When we asked Vaughn for his “best practices” approach to this, he gave us the following:

• You have to have a designated area for the kids that is blocked off from the gym floor and with childproof gates.
• Have an agreement in place for parents who wish to bring their kids to the gym sign.
• No unattended children should ever be permitted on the gym floor, unless they are participating in a class.
• Providing or arranging for supervision of the designated kids are is preferred.  if you cannot afford it, try to have parents using the area trade off watching the children.
• Background checks must done on anyone who has interaction with kids in an official capacity. (Affiliate Guard provides a low cost, simple background check)
• Parents always have to be in the gym when their kids are present.  They cannot drop kids off and run errands.
• If the child is going to leave with anyone other than who they came with you have to notify the owner or coach on staff.
• No food policy – they make a mess and never know who has a peanut allergy

Following these protocol will help you minimize the risk of injury or incident involving other people’s children.

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