Large a Bond Must Be Posted?
existing business must post a bond with the Consumer Protection
Division that is adequate
to cover all "outstanding liabilities" to its members
(the amount of money the business
would have to refund to members
if it closed).
If the club closes, consumers may make a claim on the bond.
the Health Club Services Law, the maximum bond that a business
has to post is $200,000, regardless
of whether the business' outstanding liabilities are greater
Sales before opening:
a business is making sales prior to opening for business, the
must register and post a $50,000 bond before starting any sales.
This bond must be increased accordingly as sales exceed $50,000.
The bond must always equal or exceed the total amount of money
from consumers before the club opens. Unlike a bond for an existing
facility there is no maximum. However, once the business opens,
it may reduce its bond to the amount required for an existing
to Health Club Information
for Consumers page.