(Aka: Health Spa, Fitness Center, Gym Surety Bond)
Some states require the Health Club Surety Bond in order to obtain and maintain a license to operate a for-profit health club, health spa or fitness club. The bond is put in place to protect consumers. Typically, health club bonds are required to provide a form of guarantee that club members will not take a loss as a result of a breach of contract or bankruptcy of the health club. In some states, the bond also protects the consumer's right to a refund of fees paid in circumstances outlined in state statutes.
Health club bond amounts vary from state to state. In some states, the bond amount can be dependent on the term of the health club contracts offered. Additional locations may also require either additional surety bonds or increased bond amounts.
A surety bond is an agreement between three parties:
The answer depends on many factors: the state the health club is in, the number of locations, and the length of membership contracts most commonly. The total can range from as little as $20,000 to above six figures in some instances. Just keep in mind that the amount you pay is a fraction of what the total bond is worth, often only 3-5% of the total.
The amount different health club owners pay is also variable. Larger bonds obviously have larger costs, but riskiness of the principal also matters. Principals with bad credit won't necessarily be denied, but they may pay more. Regardless of what that sum is, it must be paid upfront and again annually to keep the bond renewed. If it lapses, the health club license could be revoked, among other penalties.
Every state defines what is considered a Health Club and requires licensing. Whether or not your business needs a bond is up to the applicable state agency. Be aware that businesses that may not typically be categorized as "health clubs" may still be required to obtain a bond based on the state definitions. Here are some potential examples:
Processing a Health Club Bond is typically simple and easy. In most cases, minimal documentation is needed. Quotes are usually provided the same day or within 24 hours.
Viking Bond Service provides all the services expected from a leading surety company, along with all the assistance you need to submit an application. We provide the surety bonds you need to meet the state requirements. Plus, they're available to health club entrepreneurs even if they have bad credit or bankruptcy. Our team is here to help at every step, so don't hesitate to reach out with questions.
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