WMKY

AG Beshear files actions against fitness centers in Carter, Greenup counties

Oct 7, 2017

Credit American Health Centers

Attorney General Andy Beshear has announced that his office has filed court actions against two fitness centers in Kentucky for failing to properly register with his office and post a cash bond that protect members should a center go out of business.

The fitness centers are American Health Center in Grayson and Fitness World in Raceland.

In 2016, Beshear filed similar actions against fitness centers in Hodgenville, Louisville, Versailles and Frankfort. Those cases resulted in $4,000 returned to the Commonwealth, a $9,000 default judgement and one company agreeing not to operate a fitness center in Kentucky for 10 years. 

By law, fitness centers or gyms, spelled out in statute as “health spas,” are required to file an annual registration statement with the Office of the Attorney General, and post a bond, if they charge an initiation fee or have pre-paid memberships. Each bond amount is based on the number of memberships.

“Our regulatory oversight of fitness centers is important because they are located in almost every community across the state and often operate off of long-term membership fees,” Beshear said. “While the majority of fitness centers follow the law, there are those my office must seek civil penalties against for violating regulations.”

Beshear’s office filed complaints in Franklin Circuit Court Sept. 29. According to the complaints:

Claxon Management Company dba American Health Center, which was purchased by new owners in the 2015-16 reporting year, failed to register or post a bond. Owners failed to register or post a bond for 2016-2017 or 2017-2018 period. Beshear’s office is seeking $12,000 and for the company to register.

Fitness World failed to register or post a bond for 2016-2017 or 2017-2018. Beshear’s office is seeking $8,000 and for the company to register.

Beshear said the requirement for fitness centers to register with his office is critical to ensure that they do not just collect money for long-term memberships and then close shop.   

In an effort to obtain better compliance with the majority of their Kentucky locations, Beshear said his office corresponds not only with independent fitness centers but also with all of the corporate headquarters of the fitness club franchises.

Results of court actions Beshear’s office filed in 2016 include:

Hodgenville: Beshear’s office filed a complaint against Life Unlimited Investments d/b/a SNAP Fitness for failure to register and to post a bond for registration for three years. A consent judgment was entered for $3,000 in Franklin Circuit Court. Since that action, the company has paid the amount to the Commonwealth. 

Louisville: Beshear’s office filed a complaint against No Limit Fitness for the failure to register for two years. The AG’s office successfully negotiated a settlement with the owner that included a $1,000 payment to the Commonwealth and injunctive relief, meaning the owner agreed not to operate a fitness center in Kentucky for 10 years for suspended penalties. 

Versailles: Beshear’s office filed a complaint against SNAP Fitness for failure to register and post bond for three years. In May 2017, the Franklin Circuit Court entered a judgment against the defendants for $9,000.

Frankfort: Beshear’s office filed a complaint in against Active Fitness 24/7 for failure to register and post a bond for one year. Summary judgment was entered in Franklin Circuit Court for a $2,000 civil penalty and $2,281 in litigation costs. Beshear’s office is attempting to collect on the judgment.

(provided by Kentucky Office of the Attorney General)