With over 28% growth in just the last decade, a gym membership is steadily increasing and giving fitness owners the ability to expand their share of the market, and more importantly, to upsell these members in more premium services to benefit them on their fitness journey. Combined with proper marketing, you may have seen a noticeable increase in your gym membership interest. Recognizing that having a gym is a full-time business, you will need proper contracts to protect yourself and your customers.
In this article, we will explore what contracts are, why they are important, and ultimately, a guide to their creation.
What are gym membership contracts
It is no secret that there is a negative stigma surrounding gym membership contracts. This is often due to hidden policies and costs that both shock customers, but also, leave them blindsided and trapped in their commitment. Cancellations, durations, and membership payments are often the most complained about policies for gym contracts.
It is important to remember that gym contracts are not just ways for you to earn income, but they are contracts that are legally binding. These contracts are used to define the terms surrounding the agreement between the gym and its members. The contract cannot be negotiable, as it is a disclosure of the terms and liabilities associated with a gym membership, and services provided within this membership. Ultimately, a membership contract aims to minimize risk for the gym, and the customer as well.
Why are gym contracts needed
Now that we have defined gym contracts, other than for legal reasons, it’s necessary to discuss why drafting a professional contract is necessary, rather than a verbal or unprofessional written agreement.
- Contracts mitigate losses through the disclosure of liabilities and responsibilities of each party.
- Contracts, when followed, provide a predictable amount of recurring revenue for your gym, where otherwise it would be unclear due to one-off services.
- Depending on the legal authorities that are regulating your fitness facility, certain terms in the contract are necessary.
- Contracts alert the member of potential dangers and assume risks with the use of the facility, and will understand that by doing so, it is up to them to remain as safe as possible.
- Contracts set terms about how each party can claim compensation from the other if one or more of the clauses are not followed.
The 8 important steps to creating a gym contracts template
Thus far, we have defined what a contract is, and why it is important to create one. For your benefit, we have included the 8 most important items to add to the further gym contracts template:
- Clearly identify the parties to the contract, and mark where everyone must sign
Remember that this is a legally binding contract, so make sure to list clearly the legal names of all parties involved, including any contact information, so that there is no room for confusion or error.
- Define the length of the contract
This is an essential section within your contract, as it states when services and responsibilities cease to exist. If upon reaching the end of the contract, the member wishes to continue, this can be addressed in a further “renewal” section.
- Establish payment cadence and disclose all fees to the member
Clearly state the method of payment to the member, and when it will occur. It is common to obtain a client’s bank account information to permit automatic withdrawals.
- Decide on automatic renewals and any roll-overs to the membership
Most members will not want to manually sign a contract each year for the continuation of your services, so make sure to include a section on roll-overs and renewal. Remember to give ample advance notice to clients when their membership is up for renewal, and be extremely sure to list any fee increases to the contract.
- Provide a section on freezing or termination of a contract
Establish a mutual understanding of how early terminations will be treated if a member wishes to cancel their contract before the stated length. It is common to also have a freezing period for members that are going on vacation or extended leave.
This includes all personal information, such as birth date, bank information, and other contact information.
- Create a section regarding the terms of liability
List the events where the gym is, and is not, liable for injury or other hazardous mishaps.
- Clearly list all products and services that are included within the contract
Everyone should know what they are paying for. Customers will always cancel when they feel they have been cheated, misled, or surprised.
Creating a gym membership contract is only the first step. Enforcing the clauses within the contract and ensuring the smooth running of your gym can be an enormous task altogether. Spark Membership is the #1 gym management software on the market, which automates your billing, scheduling, staff/client management, marketing, communication, and many more features, all from the comfort of your smartphone. Try Spark Membership today for just $1.