Health Spa Organizations
A Health Spa is defined by Utah Code §13-23-3(a) as any person, partnership, joint venture, corporation, association, or other entity that, for a charge or fee, provides as one of its primary purposes services or facilities that are purported to assist patrons to improve their physical condition or appearance through: (i) aerobic conditioning; (ii) strength training; (iii) fitness training; or (iv) other exercise.
A health spa facility may not operate in Utah unless the facility is registered with the division under the Health Spa Services Protection Act. In addition, each health spa must obtain and maintain a performance bond, letter of credit, or certificate of deposit, unless exempt.
Frequently Asked Questions
A health spa may NOT operate in this state without first having received a registration permit from the Division. Each health spa entity shall obtain a registration permit prior to selling, offering or attempting to sell, soliciting the sale of, or becoming a party to any contract to provide health spa services.
The registered agent is the individual or business chosen to receive service of process when the applicant’s business entity is a party in a legal action such as a citation or hearing.
It depends. If you operate as an independent contractor or sub-contractor and are not an employee of the facility then registration is required.
The Health Spa Services Protection Act requires that the sale of health spa services must be in writing and constitute the entire agreement between the consumer and health spa. The required elements for a Contract or Sales Agreement are listed on page 4 of the application. A copy of the contract must be given to the consumer and a copy must be kept on file at the location.
Surety Compliance means that a Health Spa applicant has presented proof of surety coverage in the form of a bond, letter of credit or certificate of deposit in a designated amount based on an applicant's membership numbers. Surety coverage assures that a health spa licensee will comply with the Health Spa statute, as well as refund dues for any prepaid services in the event the spa closes.
Gyms must have a form of surety compliance in place in order to accept payment in advance, payment in full, enrollment fees, processing fees or other one-time charges that are intended to pay for services beyond one month.
To be exempt from Surety Compliance you must meet the following requirements to claim exemption:
- The applicant does not offer paid-in-full memberships or services, but only membership or services paid for by installment contracts on a month to month basis.
- All payments due under each contract, including down payments, enrollment fees, membership fees, or any other payments to the facility are in equal monthly installments spread over the entire term of the contract.
- The term of each contract must be clearly stated and not capable of being extended.
- The applicant must state the 5 miles provision clause in the contract as follows, "If this health spa ceases operation and fails to offer an alternate location within five miles, no further payments under this contract shall be due to anyone, including any purchaser of any note associated with or contained in this contract."
The schedule is as follows:
|Number of Contracts||Principal Amount of Surety|
|500 or fewer||$15,000|
|501 to 1,500||$35,000|
|1,500 to 3,000||$50,000|
|3,001 or more||$75,000|
30 days prior to its expiration. The Division sends renewal notices as a courtesy, but each applicant is responsible for filing 30 days in advance regardless of when they receive the courtesy notice.
The Division will assess a late fee of $25 for each month or portion of the month your application is late. For bonded facilities, failure to file proof of surety on time can result in a fine of up to $100 each day it is not in place.
You cannot be released of your licensing responsibilities with the state including: surety coverage, permit renewal and other obligations, until the new owner has filed the required paperwork and obtained a Health Spa Permit of their own.
If your business closes, claims bankruptcy or ceases normal business operations you must:
- Contact the Division and give a formal notice 45 days prior to closing. This notice should include your plans to relocate, remodel, transfer, sell or refund your members.
- Notify your members and staff, in writing that you are transferring your members to another location within 5 miles or offer to rescind all membership contracts and to refund the unused portion of all Members’ membership fees. The written offer of rescission should establish the procedure and time line for obtaining the desired refund and must be offered within 30 days of closure.
- Provide the Division with a Membership list and copies of all contracts and membership information valid on the date of closure 10 business days before closing or transferring.
- Send the Division the additional required closing information if you are not transferring or selling your memberships to an alternative facility within 5 miles.
- the date on which the facility will cease operations
- a spreadsheet of the name and address of each member
- total number of members
- total cost of each membership
- effective dates of each membership
- amount of each member’s refund
- Determine sources of payment for membership refunds. Use the form of surety on file with the Division or draw from another source of secured funding. *The owner is required to maintain surety compliance for one year after it notifies the Division in writing that it has ceased all activities if proceeds from the bond were not used to refund members.
- Calculate refunds under the supervision of the Division. Refunds are determined by multiplying the number of months remaining on claimant's membership term as of the date of closure by the monthly cost of such membership to the member at the time of purchase. Periods of less than a full month are compensated by determining the daily cost of membership times the number of days remaining on the contract.
- Send the Division copies of refund checks, if made independently.
- Tell the Division how complaints, if any, were resolved or how they are planned to be resolved.