CHICAGO — A recent lawsuit has highlighted a growing club practice during the recession of charging a one-time fee to members as a way to increase revenue without increasing dues.
Last month, two members of Fitness Formula Clubs (FFC), Chicago, filed a lawsuit against the company and owner Gale Landers after they were charged $60 in January on top of their monthly dues. The club notified members about the charge in a letter in December.
Landers would not comment on specifics of the case because it is in litigation, but he says, “We don't believe there was any wrongdoing, and at the end of the day, we believe we will be vindicated.”
Rick Caro, president of Management Vision, New York, says more clubs are adding a one-time charge often called an enhancement fee, using the revenue for facility improvements.
The charge often can be less than what members would have paid had the club increased monthly dues, and the club often tells them how the money will be spent, Caro says. By doing the charge instead of increasing fees, clubs may find it hard to increase dues in future years, he adds.
Retrofitness, Colts Neck, NJ, began issuing an annual fee of $15 last year, says Eric Casaburi, CEO and founder. The added charge, which goes toward upkeep and maintenance of the club, is disclosed at the point of sale, Casaburi says.
“You certainly need to disclose it in your membership agreement,” he says. “You need to let your staff know as well.”
Planet Fitness, Newington, NH, applies an annual membership fee of $29 on $10 monthly memberships and $39 on $19.99 monthly memberships.
Whether more clubs will face lawsuits related to this charge remains to be seen, but Caro says it's not a legal issue.
“In a practical way, this isn't an outrageous act,” Caro says. “This is generally a challenge of communication, not legality.”