Create and use membership agreements

There are laws you must follow if you have a gym or fitness centre. Make sure you understand your rights and responsibilities before you sign up your clients.

Signing up

You and the client will have to sign an agreement. It will set out your rights and responsibilities, as well as those of the client.

The agreement must include:

• your name and address
• your fee structures
• the cooling-off period (including the start and end dates)
• the client’s right to end the agreement if they suffer a permanent sickness or injury
• any other reasons the client can end the agreement before it expires
• the process to end the agreement
• the opening date (if they sign up before you open for business).

Cooling-off period

New agreements must include a cooling-off period of 48 hours. The client can change their mind about joining during this time.

The cooling-off period:

• begins when the client signs the agreement
• begins on the day the business opens (if they sign up before this day)
• ends 48 hours after the client signs up.

If the client wants to cancel the agreement, they must tell you in writing before the 48 hour period is over.

Membership fees

Before a client signs a membership agreement, you must give the client a written statement. It must:

• be in plain English
• outline the total fees and charges for the length of their membership.

Regular fees

The statement must tell the client about your regular fees.

These include:

• the first joining fee
• the regular membership
• the entry fee for each visit
• any fees for services or programs.

Administrative fees

You must also tell them about your administrative fees.

Fees might be for:

• cancelling in the cooling-off period
• ending their membership due to permanent sickness or injury
• ending their membership for any other reason
• transferring their membership to another fitness centre or person
• suspending their membership
• anything else you outline in the agreement.

Discounts

You might offer your client a free or discounted fitness service in their membership.

If you do, you need to give them the full details about:

• how much the service usually costs
• whether you increased your usual fee before the offer
• if the offer has decreased or restricted the quality of the service.

Prepaid fees

If the client signs up to be a member for over 12 months, they only have to pre-pay the first 12 months.

It’s illegal for a gym or fitness centre to charge the client for longer.

Ongoing agreements

Ongoing (or rollover) agreements are a category of membership that:

• has an initial membership period (usually 6 or 12 months)
• will continue beyond that initial term.

When you make an ongoing agreement:

• the paperwork must state that it is an ongoing agreement
• the client must sign and date the agreement.

At least 2 months before the end of the initial period, you must:

• write to the client explaining the date that the initial agreement will end
• advise the client that their membership will continue
• tell them how they can end the agreement.

Agreements with minors

You must get your own legal advice about:

• a minor’s ability to enter into a binding contract
• how to handle the situation
• the implications.