for Owners of Health Clubs, Weight Loss Centers and Martial
Club Unit, Consumer Protection Division, Office of the Attorney
200 St. Paul Place, Baltimore, MD 21202
(410) 576-6350 / Fax: (410) 576-6566
that sell health club services at a facility must register. Health
club services include health clubs/gyms, weight loss
self defense schools, and personal trainers or athletic trainers
who sell services and provide a facility.
MUST A HEALTH CLUB BUSINESS REGISTER?
health club business must register with the Consumer Protection
Division prior to operating in the State of Maryland. An already
registered health club business must register annually on September
1st. There are three types of registration: bonded, bond exempt
MUST REGISTER AS A BONDED BUSINESS?
business must provide the Consumer Protection Division with a
bond letter of credit or cash deposit if it:
1. Collects or accepts more than three (3) months of payment in advance of providing services from any member, including annual fees; or
2. Collects or charges an initiation fee or any other up-front
fee more than $200 to any member; or,
3. Has not yet opened a facility, but collects any money in advance
for services to be provided at a planned facility or facility under
annual registration fee for this type of health club is $1200.00.
amount is adequate for bond or other security?
existing club must post a bond with the Division that is adequate
to cover all "outstanding liabilities" to its members.
The "outstanding liabilities" of a business is difference
between the amount of money each consumer has paid for services
and the value of services the club has actually provided to the
consumer. For consumers who pay on a monthly basis, outstanding
liabilities includes payment for one full months' dues. If the
club closes, the club is liable to consumers for the amount
of its outstanding
liabilities, and the consumers may make a claim on the bond.
Each year at registration, each business that is required to be
bonded must file with the Division a "Schedule of Outstanding
Liabilities" that has been reviewed and certified by an independent
Certified Public Accountant. When approved by the Division, this
schedule sets the minimum amount of the required bond. However,
businesses that post the maximum bond of $200,000 for each facility
are not required to submit a schedule of outstanding liabilities
or a report by an independent Certified Public Accountant.
see the Instructions
for Reporting Outstanding Liabilities and Instructions for the Report
by a Certified Public Accountant
for further information on calculating the amount of the bond and
the content of the CPA report and schedule of outstanding liabilities.
For the required surety language, please see the attached sample
bond and sample letter
business must contact the Health Club Unit for registration
and additional information before it opens a a new facility or
conducts any pre-opening activity. For pre-opening sales,
a business must post a $50,000 bond before making any sales.
must be increased
accordingly as sales exceed $50,000. The bond must always
equal or exceed the total amount of money collected from consumers
before the club opens. Unlike a bond for an existing facility
is no maximum.
MAY REGISTER AS A BOND-EXEMPT BUSINESS?
health club that is not required to post a bond and register as
a bonded business or that is not eligible to register as a pay-per-day
business, should register as a bond-exempt business.
A bond-exempt business cannot accept more than 3 months’ dues or other payments in advance or charge initiation fees or any other up-front fees over $200. The annual registration fee for this type of health club is $300.
MAY REGISTER AS A PAY-PER-DAY BUSINESS?
clubs who charge for their services only on a "pay-per-day"
or "pay-as-you-go" basis are eligible to register as
a pay-per-day business. A Pay Per Day business is defined as one
who does not:
1. Charge an initiation or other fee that is not identified as
a payment for specified future services;
2. Does not contractually obligate a buyer of health club services
to payment in advance of the date services are provided to the
3. Does not collect from a buyer of health club services any payment
in advance of the date the services are provided to the buyer.
IS REQUIRED FOR INITIAL REGISTRATION?
register, each business must Register On-Line or complete
2. For a business that is required to be bonded, a Statement
Of Compliance With Financial Accountability Requirement Under
Commercial Law Code. §14-12B-02(E);
3. For a business that is not required to be bonded (bond
exempt and pay-per-day), an Application
For Exemption From Financial Accountability (Bonding)
4. The registration fee. ($1200 for a bonded business, $300
for a bond exempt business, or $75 for a pay-per-day business,
to "Office of the Attorney General."); and,
5. A sample contract for each type of payment schedule that
will be offered by the health club. For example, if you
requiring the consumer to pay on a monthly basis,
submit two copies of this type of contract. If you offer contracts
the consumer to pay on a semi-annual basis, submit two
of this type of contract.
IS REQUIRED FOR REGISTRATION RENEWAL?
in June, the Division mails registration renewal materials to
clubs that have previously registered. To renew their registration,
businesses may Renew
On-Line or submit via regular mail by September
1st the following:
The registration renewal materials (updating and correcting the
information contained therein);
2. The registration fee. ($1200 for a bonded business, $300 for
a bond exempt business, or $75 for a pay-per-day business,
to "Office of the Attorney General");
3. For a business that is required to be bonded, a Schedule
of Outstanding Liabilities and a report by a Certified Public
for Reporting Outstanding Liabilities and Instructions for the
by a Certified Public Accountant);
4. Two (2) fully signed contracts for the three month
period immediately preceding the filing of the registration
renewal materials for each type of payment schedule offered
by the health
club. For example, if you offer contracts requiring the consumer
to pay on a monthly basis, submit two copies of this type of
contract. If you also offer contracts requiring the consumer
to pay on a
basis, also submit two copies of this type of contract.
THERE ANY MANDATORY DISCLOSURES HEALTH CLUBS MUST MAKE TO CONSUMERS
IN THEIR CONTRACTS?
club contracts must contain a Notice of Consumer Rights ("NOCR").
This notices varies depending on whether the business is bonded,
bond exempt or pay-per-day. See NOCR
for Bonded Businesses, NOCR
for Bond Exempt Businesses and NOCR
for Pay-Per-Day Businesses.