It might be a surprise, but many health club operators in New Jersey are not in compliance with the law. This can include the gym not being properly registered with the State’s Division of Consumer Affairs or the gym itself is missing key safety devices and staff training. This can leave a gym open to fines up to $5,000.00 from the Division of Consumer Affairs, as well as potential liability should a member experience a health hazard while at the gym.
If you are a new or current health club owner in New Jersey, Stark & Stark has an experienced team of attorneys who specialize in businesses both small and large, as well as franchisees and franchisors, including with experience in the fitness industry. Contact Stark & Stark’s business department to learn more about how we can help to start your business.
As a new gym operator, these are the Top 3 concerns which must be addressed before opening day.
Registration with the Division of Consumer Affairs
Many gyms currently in operation either never registered with the Division of Consumer Affairs or failed to renew their registrations. This can potentially cost a gym in fines and negative publicity.
The Division of Consumer Affairs has in the past launched investigations against unregistered gyms. A 2014 investigation (https://nj.gov/oag/newsreleases14/pr20140410b.html) resulted in 53 Notice of Violations, including for unregistered fitness centers. Businesses who received notices included not only small family businesses, but franchised locations of well known fitness chains such as Curves, Snap Fitness, Retro Fitness and Crunch Fitness. This caused the franchisee to receive large fines and the franchisor to receive bad press. In 2016, a similar investigation (https://www.nj.gov/oag/newsreleases16/pr20160331a.html ) issued fines against 20 health club operators.
You can verify whether a health club has an active license at https://rgbportal.dca.njoag.gov/public-view/.
CPR/AED training of staff, and required automated external defibrillator
N.J.S.A. 2A:62A-31 requires that the owner or operator of a registered health club must have at least one automated external defibrillator (AED) located in an accessible location, that the AED is tested and well maintained, and that at least one on site employee is trained with a current certification with the AED.
This is a continual necessity for a health club operator which must be planned beyond opening day. An AED can expire, with the pads lasting approximately 2 years, a battery lasting approximately up to five years, and the AED itself possibly requiring replacement after a decade. Additionally, certifications typically last up to two years, meaning the same staff member will require regular training multiple times to keep their certifications active.
A surety bond on file with the Division of Consumer Affairs
N.J.S.A. 56:8-41 requires any health club operator to maintain a surety bond with the Division of Consumer Affairs of between $25,000.00 and $50,000.00 based on 10% of the gross income of that health club. Additionally, if a health club operator sells memberships during any period before the facility actually opens, the surety bond must be for $50,000.00 during the preopen. There are exceptions to the surety requirements – a gym operator can supply an irrevocable letter of credit from a bank or obtain acceptance to maintain their own funds. Whichever option, the purpose is to ensure an avenue for refunds should a health club never open or shut down unexpectedly after accepting money. A health club operator which requires a surety bond can be fined as much as $5,000.00 in addition to any other fines, meaning an unregistered and unbonded health club operator can receive multiple fines of $5,000.00 each.
Contact a Business Attorney to Assist with You Gym Today
These are three of the most common mistakes New Jersey health club operators make, and continue making, which potentially can open their business to fines, tort liability, and bad press. However, there are many other concerns a health club can face. Whether you are opening your first fitness center, expending into multiple locations, or signing with a franchised health club, contact Stark & Stark’s business department today to learn more about how to protect and expand your business.
