What action is Alloy urging franchisees to take regarding local laws and regulations?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You must comply with all local, state and federal laws in the operation of your Franchised Business. There are no national regulations that apply specifically to the operation of fitness centers. However, many states, and some municipalities, have laws and regulations that apply specifically to membership contracts, operations and licenses. Many states limit the length of your customer contracts, provide for specific provisions to be included in those contracts, prescribe the format or type size for the contract, and/or provide customers the right to terminate their contracts. State regulations may also require you to obtain a bond to protect pre-paid membership fees you collect. Your state's laws may require you to have an automated external defibrillator (AED) unit on-site with staff member(s) trained in how to use the AED and trained in cardiopulmonary resuscitation (CPR). There may be other laws applicable to your business and we urge you to make additional inquiries about these laws. Your failure to comply with these laws constitutes a material breach of your Franchise Agreement.
Some states and municipalities have bonding requirements for businesses that sell memberships or pre-sell training similar to what your Franchised Business offers; they may also have liability insurance requirements for health clubs that may or may not apply to your Franchised
Business. Some states impose sales taxes on club memberships. There may also be special permits required for you to operate some or all of your business. If these or similar laws have been enacted in the state or municipality in which you intend to operate your Facility, you will need to comply with these laws, and we urge you to become familiar with them.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 9–13)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy urges franchisees to become familiar with all local, state, and federal laws relevant to operating their franchised business. While there are no national regulations specific to fitness centers, many states and municipalities have laws concerning membership contracts, operations, and licenses. These laws may dictate contract length, required provisions, contract format, and customer termination rights.
State regulations might also mandate a bond to protect prepaid membership fees. Furthermore, some states may require an automated external defibrillator (AED) on-site, along with staff trained in its use and in cardiopulmonary resuscitation (CPR). Alloy emphasizes that failure to comply with these laws constitutes a material breach of the Franchise Agreement.
Additionally, Alloy points out that some states and municipalities have bonding requirements for businesses selling memberships or pre-selling training, and may have liability insurance requirements for health clubs. Sales taxes on club memberships may also be imposed by some states. Special permits might be necessary to operate certain aspects of the business. Alloy stresses the importance of franchisees complying with these laws and becoming well-informed about them.