Ohio regulates most gym memberships under its Prepaid Entertainment Contracts Act, which creates specific rules on contract content, term limits, cancellation rights and payment practices for Ohio consumers and fitness businesses.
Scope and Definitions
Ohio’s Prepaid Entertainment Contracts Act is codified at Ohio Revised Code 1345.41–1345.50 and is enforced as part of Ohio’s broader Consumer Sales Practices Act framework. A “prepaid entertainment contract” is a contract under which the buyer must pay, or become obligated to pay, for services before receiving them, and it expressly includes “health spa services” such as gym or health club memberships. Health spa services cover contracts for instruction, training, or assistance in physical culture, body‑building, exercising, reducing, figure development, or similar activities, or for the use of a health spa, gymnasium, or comparable facility.
These provisions apply to typical gym memberships where the consumer prepays for access or services, including many annual or multi‑month contracts. They do not apply to every kind of prepaid arrangement, such as prepaid tanning-only packages or services provided by schools, the state, or nonprofit religious or community organizations.
Contract Form and Content Requirements
Every prepaid entertainment contract must be in writing, dated as of the date the buyer signs, and the seller must provide the buyer with a copy of the signed contract. The contract must clearly and conspicuously state the buyer’s cancellation rights, including the statutory three‑business‑day right to cancel and the method for exercising that right. The Attorney General’s guidance and practitioner commentary emphasize that gyms must also provide a separate notice of cancellation form that the member can use to cancel within the cooling‑off period.
The Act limits the maximum term of any prepaid entertainment contract to three years, so a gym cannot lock a consumer into a membership exceeding that length. Promises or features a gym makes orally (for example, about equipment, hours or additional services) are not guaranteed unless incorporated into the written contract.
Cooling‑Off and Other Cancellation Rights
Ohio law gives consumers a three‑business‑day “cooling‑off” period to cancel most prepaid gym contracts without penalty beyond a nominal processing fee. The consumer has until midnight of the third business day after the first service is available under the contract to cancel, excluding Sundays from the calculation. Cancellation must be in writing, and the consumer should mail or deliver a cancellation notice so it is postmarked by that deadline.
If the contract is signed before the facility opens, the cancellation right extends to seven days after the first service becomes available to the consumer. In both cases, upon timely cancellation the gym must refund all amounts paid, less an expense fee no more than $10. If a gym fails to provide the required written cancellation notice, the consumer’s right to cancel remains open and can be exercised until the supplier complies with the statutory notice requirements.
Beyond the statutory cooling‑off period, other cancellation grounds arise from contract language, general consumer protection law, and related health‑club practices, such as closure of the facility or material changes in services.
Pre‑Opening Sales and Payment Limitations
Ohio imposes special rules when gyms sell memberships before the facility opens. The facility or services must be available to the consumer no later than 180 days after the contract is signed, preventing gyms from selling long‑lead memberships without opening for extended periods. Before opening, the business cannot require the consumer to pay more than $50 dollars or 10% of the total contract price, whichever is less, thereby limiting consumer exposure if the facility never opens or opens late.
If the facility is still being built when the buyer signs, the seller must have a bond of at least $10,000 from a company approved to do business in Ohio. The seller can cancel the bond twenty-four months after the facility is finished and opens for service.
If a facility fails to open by the represented date or does not become available within 180 days, consumers may have grounds for cancellation and a refund under the contract terms and Ohio consumer law, and the Attorney General has pursued enforcement actions against gyms that misrepresented opening dates or retained payments in those circumstances.
Enforcement and Remedies
Violations of the Prepaid Entertainment Contracts Act can also constitute unfair or deceptive practices under the Ohio Consumer Sales Practices Act, exposing gyms to enforcement by the Attorney General and private lawsuits. The Attorney General has sued fitness centers for noncompliance, including failing to provide proper opening‑date notice, requiring excessive upfront payments, and refusing to honor refunds required by law. Private practitioners note that noncompliant contracts can allow consumers not only to cancel but also to seek statutory remedies such as rescission, actual damages, potential multiple damages, and attorney’s fees in appropriate cases.
For both gyms and consumers, careful attention to statutory requirements, especially written contract terms, cancellation notices, term limits, and pre‑opening payment caps, is essential to ensure that Ohio prepaid gym memberships comply with state law and that consumers are able to exercise their rights effectively. To discuss further, contact KJK Corporate & Securities attorney Emily Korthaus (ELS@kjk.com).