If you operate a gym, there are several key things which need to be covered in your Terms and Conditions. The Terms and Conditions will form a legally binding agreement between you and your clients. Clients should be provided with the Terms and Conditions when they use the gym or sign up for a membership.

Walk-in clients are easy to deal with. They come in, they pay an entry fee, and you provide them with equipment, classes or whatever services are available at your facility. You need to display your Terms and Conditions and state that these apply to all gym users.

When members sign-up, you  need to have a Client Agreement in 2 parts: (i) a Membership Form for the client to sign; and (ii) a set of general Terms and Conditions attached to the back of the Membership Form.

A well-drafted Client Agreement should address the issues outlined below.

Memberships

Many gyms offer different types of memberships. To avoid disputes it is important to set out what each membership entitles your clients to.

Fees and Invoicing

As with any business, you need to make clear to your clients, what your fees are and how they will be charged. If you charge a sign-up fee, in addition to any membership fees, it needs to be indicated in your Client Agreement. Your Terms and Conditions should set out how regularly payments for membership fees will be deducted from your debit or credit card accounts, and what will happen in the event that a transaction is rejected. You have rights to suspend services if invoices remain outstanding after a certain period of time.

Termination

With gym memberships, standard practice requires payment in advance either fortnightly or monthly. Therefore, it is typical for gyms to require 14-28 days’ notice for clients to terminate their membership. You can state in your Terms and Conditions that you reserve the right to immediately terminate a client’s membership under certain circumstances for e.g. breach of any of the Terms and Conditions, and that no refund will be made under such circumstances.

Suspension

Some of your clients may wish to suspend their membership. Allowing your clients to suspend their membership for a set period of time might be a good alternative to clients terminating their membership. If you allow this, you should set out the procedure the client must take to notify you of their intention to suspend their membership, and you may wish to set a time limit for suspension.

Personal Injury

This is an important issue for gyms. You need to include a section in your Terms and Conditions that your clients are aware that they are using the equipment and attending classes at their own risk. It is important for you to clearly indicate that your business and all of your employees will not be liable for any loss, injury or damage that a client suffers, from using the equipment incorrectly or not adhering to health safety instructions.

Consumer Guarantees

Whilst you can limit your liability, you should note that there are mandatory consumer guarantees required by the Australian Consumer Law (ACL). You need to ensure that your business has a refund policy which complies with the ACL.

Cooling-off Period

The ACL introduced a national law on unsolicited sales practices including door-to-door selling, telephone sales and other forms of direct selling which do not occur on the business premises or were not requested by the client. If a client signs a membership due to unsolicited sale practices, the ACL requires that the client is entitled to consumer rights, including a 10 day cooling off period.

Website Terms of Use

If your business has a website, you need a Website Terms of Use. These apply to every website visitor, protect your website and limit your liability for your website. The Terms claim your copyright and intellectual property rights, and set out permissible and prohibited uses of your website, including that competitors cannot use your website information.

Privacy Policy

If you collect, use and disclose personal information from customers, including using the information for direct marketing, you need a Privacy Policy, to assist you to comply with the Privacy Act.  The Privacy Policy is between you and each person that you collect personal information from. It sets out what personal information your business collects, how this information is used, and under what circumstances the information will be disclosed to third parties.

To conclude

With Australians being increasingly health conscious, running a gym can be a profitable business, but there are also significant risks. You should consult with a contract lawyer and have a professionally drafted Client Agreement with Terms and Conditions to protect your business in the event of any disputes or injuries. Speak to a good business lawyer to reduce risk and legal liability.

Ursula Hogben

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