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IHRSA Advocate

The IHRSA Advocate is your guide to knowing and understanding the policies that influence daily health club operations. We analyze the action, so you know when to take your own.

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Entries in Bonding Requirements (2)


Bonding and Contracts

In the health and fitness club business, failing to meet bonding requirements can get club operators into hot water. And the water couldn’t be any hotter than in North Carolina, where, in May, the owners of a large local chain were banned from operating any clubs in the state for 12 years because they didn’t maintain the bonds required by the state.

The company, Peak Fitness, which isn’t a member of IHRSA, has 28 locations. It will face a $2-million penalty if it violates the ban.

A bond—also known as a surety bond—is an agreement under which one party (the bond company) obligates itself to a second party (the consumer) to answer for the debt or default of a third party (the club).

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IHRSA Opposes Harmful Bonding Proposal

Earlier today, IHRSA submitted testimony on behalf of IHRSA members to the South Carolina state legislature, currently considering a proposed regulation that would likely increase bond amounts for health clubs. The proposal increases the maximum bond amount possible and also redefines how the bond amount is determined—increasing the likelihood that clubs will have to purchase larger bonds.

IHRSA testified that the increased bonds would raise costs for businesses and ultimately penalize consumers attempting to engage in healthy lifestyles. Furthermore, the negative impact the proposed change would have on businesses outweighs the minimal additional protection it would offer consumers.

To read the full testimony, click here (PDF).

Attempting to increase or alter state bonding requirements is a popular trend in the US. Last year, harmful bonding bills accounted for 6 percent of the total number of bills IHRSA fought.  IHRSA opposes bonding legislation that creates an undue burden on club businesses, while failing to safeguard the consumer.

The South Carolina proposal is currently before the Committee on Medical, Military, Public and Municipal Affairs, and IHRSA is watching it closely. We will alert members to any updates.

For questions, please email IHRSA’s Senior Legislative Analyst, Tim Sullivan or call (800) 228-4472.