Looking to open a health club in Tennessee? Health clubs operating in the state need to be registered and bonded�keep reading to find out how it works.
Health clubs, as Tennessee defines them, are clubs offering exercise and athletic equipment per the terms of an agreement between the club and consumer—a gym. Every agreement has to follow the state’s rules for a valid agreement:
- In writing
- Signed by the buyer
- Dated with correct date of signature
- Buyer’s right to cancel statement as worded in Tennessee Code Annotated��47-18-305
- No more than 36 months in length
Some health clubs can be exempt from registration with the Tennessee Department of Commerce and Insurance if they have maintained sufficient registration for at least five years prior to July 1, 2015; those years can be consecutive or not, as long as there were gaps of no more than five years between registrations.
Tennessee health clubs need to get a $25,000 surety bond for each business location they maintain in the state. The surety bond provides consumer protection: should the gym go out of business or charge clients after cancellation or when the gym is unavailable, clients can file a claim against the bond. Violating other provisions of the health club law is classified a Class A misdemeanor in Tennessee, punishable by no more than a year in jail and fines of up to $2,500 per violation.
Surety bonds need to be maintained for two years after a health club closes. Gyms can be exempt from the surety bond requirement if the business has been under the same ownership for at least seven consecutive years. Health clubs can also be exempt if they file an audited financial statement showing a net worth of at least $10,000,000.
See recent amendments to the Tennessee health club law here. Ready to get a surety bond? Get in touch with Single Source Insurance today!�