If you are looking to open your own fitness business, there are endless resources available to help you move from concept to actually opening the doors. There are companies, like Two Brain Business, that have entire programs set up to walk you through a step-by-step process. Many of these companies will partner with other gym-dedicated services, like Wodify, to provide you with an easy and comprehensive package of everything you will need. However, very few talk about the legal issues you may face as a gym owner.
Legal exposure can destroy your business. Fitness business owners face legal exposure in two primary areas of law: contracts and injury (tort). If you, as the gym owner, are going to be sued, it will most likely be a result of a money issue (like membership payments) or because someone got hurt. While there is no way to prevent someone from suing you, proper preparation now is essential to set your business up for long-term success.
Here is a checklist for you to follow to plug your legal exposure from the beginning.
- File for an LLC - A Limited Liability Company (LLC) is the simplest form of legal entity you can use to protect your assets. Every state has a simple process to file for an LLC. Most states allow you to do this online for a nominal fee. This name could be anything, like My Gym LLC. The fun name comes next!
- File Your Fictitious Name (if necessary) - this is also known as your “Doing Business As” or D/B/A. This name is your branding, your cool gym name that is going to catch someone’s attention. This is the name you are going to put on your website, your building, and your shirts. This might be My Gym LLC, D/B/A The Coolest Gym Around. Most states require you to file this name to connect it to your LLC. If you don’t, then you don’t enjoy the legal protection from your “Limited Liability” Company - so don’t forget to connect!
- Get an Operating Agreement - Perhaps the most overlooked piece to setting up your business. This is a legal agreement with your LLC to protect you in the event in the worst-case scenario, you get sued. Without it, your LLC may not cover you. Don’t just use a form online. Many of them are insufficient and don’t provide any protection.
- Set up a Business Bank Account - Once you have your LLC, fictitious name, and operating agreement, head to your bank to set up a business account. You must keep your gym’s money and your personal money separate until all of the expenses are paid and the taxes are set aside.
- Take Out a Business Loan - Don’t take out a personal loan to get your gym started. You have an LLC for a reason. Take out a business loan if you need start-up money. Hello, shiny new fitness equipment!
- Put the Lease in the Name of Your LLC - When you find a location, use your LLC for the Commercial Lease. This is another layer of protection for your assets. Make sure you have someone, like Gym Lawyers, review your lease before you sign. You want to make sure you understand every section.
- Get Liability Insurance - This one should be obvious. But, not all insurance is created equal. There are insurance companies out there dedicated to helping gym owners. Do your homework and find one that meets your needs.
- Create a Liability Waiver - This is your first line of defense against an injury lawsuit. There are tons of forms online. But, be careful. Many of them are inadequate and won’t cover you. When in doubt, use a professional to draft your waiver and give it to your insurance company for approval.
Pro Tip: Wodify allows you to add initial lines to your electronic waivers and prevent clients from submitting the waiver until all sections are initialed! They are also attached to each client’s profile to be referenced at any point should you need them.
- Create a Membership Contract - This is your first line of defense against a contract lawsuit. You must tell your members what they are agreeing to when money is being exchanged. Most states have very specific laws regarding gym memberships. Once again, be sure to use a professional to draft this contract to make sure it meets your state laws.
Pro Tip: Wodify does all of the contract leg work for you after you set the agreement terms. Each time a membership is purchased or attached to a client profile, a contract email is automatically triggered and sent to the client to complete and, if required, initials must be entered in order to submit the document! The contract is also attached to the client’s account should you need to reference it. provides a copy of the signed contract and a summary of the financial terms of the agreement directly to your new member via email. Wodify even has functionality that stops members from attending classes if a contract hasn’t been signed! We got you!
- Get an Accountant - You want an accountant from day one. When it is your money, you want someone you can trust. A good accountant will help you avoid IRS issues down the road.
Pro Tip: Wodify has an extensive Financial Reporting feature to help stay organized and reduce any headaches businesses can cause your accountant! They’ll thank you later.
You have enough to worry about when opening a gym. Where will you open it? What equipment do you need? How will you set up your space? How will you get members? However, you don’t want to go through all of the work only to end up with a massive legal migraine. Put in a little extra preparation now to help avoid legal issues in the future.
Do you have any other legal tips for fitness owners? Are there other documents that helped you prep for a legal situation? Share with us on social media @wodify!
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