Anytime Fitness Franchise Health Club ($25,000) Bond - Statewide in Pennsylvania

Brief Summary

The $25,000 figure is the smallest tier under the Pennsylvania Health Club Act, and it fits only a club that certifies in writing that it will have no more than 150 members and sell no contract longer than 24 months. If your franchised location fits that profile, this bond satisfies the security requirement for that one location, and you pay a yearly premium instead of posting a $25,000 letter of credit.

A Pennsylvania health club that sells membership contracts longer than three months must register with the Office of Attorney General, Bureau of Consumer Protection, at least 30 days before advertising or selling them, and must file a corporate surety bond or irrevocable letter of credit unless it qualifies for the exemption in Section 13 of the Health Club Act. The $25,000 amount applies to a club with no more than 150 members and contracts of no more than 24 months. Each location is a separate health club and files its own security.

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How to Apply for a Anytime Fitness Franchise Health Club ($25,000) Bond:

• Count current members and identify your longest contract term to confirm the 150 member, 24 month tier fits your location.
• Check whether every contract meets the Section 13 exemption conditions. If so, file a Certificate of Exemption instead of a bond.
• Complete the Health Club Registration Application for the specific location.
• Complete the Certificate of Compliance and select the $25,000 option.
• Obtain the bond and file the original with the Office of Attorney General, Bureau of Consumer Protection.
• Register at least 30 days before advertising or selling health club contracts.
• Certify on or before June 1 each year that the security is still in effect.

Detailed Information About the Pennsylvania Anytime Fitness Franchise Health Club ($25,000) Bond:

The $25,000 tier is the smallest one

Section 11 of the Health Club Act (Act of Dec. 21, 1989, P.L. 672, No. 87) sets the security by contract length and membership size. The Attorney General's Certificate of Compliance lists five options.

• Contracts of no more than 12 months where payments are not made in equal monthly installments: $50,000
• Contracts of more than 12 months but no more than 24 months: $100,000
• Contracts of more than 24 months: $200,000
• Contracts of no more than 24 months and no more than 300 members: $50,000
• Contracts of no more than 24 months and no more than 150 members: $25,000

The $25,000 tier depends on a written certification to the Director that the club will stay inside both limits. A club that grows past 150 members or starts selling longer contracts moves into a higher tier.

Each franchise location files its own security

The Act does not carve out franchised clubs. It applies to the business that sells the memberships, and it states that each separate location where health club services are offered is a separate health club that files separate financial security. An owner of three franchised clubs needs three bonds or letters of credit. The security must be in place before contracts are sold, whether or not the facility is finished and open.

The exemption many clubs overlook

Under Section 13 (73 P.S. 2173), a club is exempt from filing security if it proves to the Director that every contract meets all of the Act's conditions. These include a clause that no further payments are owed if the facility stops operating, payments in equal monthly installments over the whole term, an initiation fee within the limit the Act sets, no other kinds of payment, and a term of no more than 12 months. An exempt club still registers. It files a Certificate of Exemption instead of a bond.

What the bond protects

The security is for the benefit of a member who suffers a loss from the club's breach of contract or bankruptcy. The Attorney General's sample bond names the Commonwealth of Pennsylvania and buyers of health club contracts. A member gives the club written notice and waits 30 days before making a claim against the surety.

Keeping it in force

Every club must certify to the Director on or before June 1 of each year that the security remains in effect. The sample bond requires the surety to give 90 days written notice before cancelling. A club that lets its bond lapse cannot write any further health club contracts, and failing to register or to maintain bonding is a misdemeanor of the second degree.

Eligibility and Requirements for a Pennsylvania Anytime Fitness Franchise Health Club ($25,000) Bond:

• A corporate surety bond or an irrevocable letter of credit.
• Bond running to the Commonwealth of Pennsylvania and buyers of health club contracts.
• Separate security for each club location.
• Written certification of no more than 150 members and no contract longer than 24 months for the $25,000 tier.
• 90 days written notice from the surety before cancellation.
• Staff certified to administer CPR, which the Act requires of every registered club.

Pennsylvania Anytime Fitness Franchise Health Club ($25,000) Bond FAQs:

Official and Additional Resources for the Pennsylvania Anytime Fitness Franchise Health Club ($25,000) Bond: