The Dandelions

.. the mutual admiration and bashing society.

About time Fitness and Yoga Clubs be regulated by law

Posted by Oscar the Grouch on August 3, 2008

I refer to the report in The Star, 1 August 2008, entitled “Yoga club members can use vouchers to resume classes”.

The fitness craze has culminated in many fitness clubs springing up all over. Lately, this phenomenon has extended to yoga clubs. Previously, we have small gyms, of which members need to pay monthly for the use of its facilities. Sometimes, payments are even accepted daily, on an ad-hoc basis.

But the current fitness gyms cum clubs are different. Millions of ringgit is spent on the outlets, making them look more like a lifestyle bar rather than the run-down gyms of yesteryears. And, as opposed to paying for the use of its facilities, memberships are sold, from a few hundred ringgits, up to thousands. There is no longer monthly use, these memberships are for a year, or beyond, some even, on a life membership.

We must remember that monies collected from these memberships are actually paid up-front, that means you pay first, for the future, before you actually get to use. For example, in a 3 year membership, one may need to pay up-front for the next 3 years, today. There are problems when one purchase such memberships – one, if the facilities are not up to par, you cannot do anything about it because you have already paid in advance for it; secondly, if you decide not to continue, chances are, you may not be able to claim back the remainder of the fees paid.

The problems experienced by the members of the Yoga Zone and Yoga Club is an example of what can happen when one is required to pay upfront fees for purchase of membership. Fees may be collected 3, 5 or even 10 years in advance, and the owners may just commit CBT and run-off with the funds. I think, it is timely for this industry to be regulated by the authorities.

The golf, recreational club and timeshare industry, which shares the same concept of membership fees paid up-front, are being strictly regulated by law under the purview of the Companies Commission of Malaysia. Their membership scheme would first have to be approved by the authorities. The operator of such schemes have to comply with the requirement of a paid up capital of between RM1 million to RM5 million.

In order to sell any membership, a valid prospectus must be given to a potential buyer. All the facilities must be clearly stated and correspond with the prospectus. The authorities must also inspect the facilities to ensure that everything is up to par.

A trustee should also be appointed to oversee the operator of such schemes. Not all of the monies from the membership fees are paid to the operator. Part of it will be remitted to the trustee to hold in trust to ensure that the advance monies are used properly. This will ensure that even if the operator runs away or close down; some of the fees can still be salvaged.

I fervently believe that this fitness cum yoga clubs should be regulated under the same laws or under new laws. The monies collected from membership fees amounts to millions of ringgit. We do not want to see the day when members’ hard earn monies are fleeced away by unscrupulous operators. Let the Yoga Zone and Yoga Club episode be the one and only one.

2 Responses to “About time Fitness and Yoga Clubs be regulated by law”

  1. Madame said

    I agree, Oscar! Membership clubs and Management clubs are totally different but alot of ppl are not aware of this when they buy their memberships. Membership clubs are owned n operated by the members, whilst the Management clubs are operated under the whims n fancies of the Owners!!!! A very risky investment….unless its more strictly regulated🙂

  2. erniejean said

    Oops…I’m one of the silly-ninnies who signed up for a 2+1 year membership with a huge huge gym……hopefully bcos they’re still relatively new in this indsutry, they’d still be decent by the time my 3rd year comes to past………

    But yea, there should be some stricter regulation for these sort of membership…however to expect our current govn to come up with something and actually enforcing it will be like expecting the PM to stay awake during party speeches……

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