By Matthew Becker, Gym Lawyers PLLC
If your gym offers recurring memberships with automatic renewals, you need to be aware of an important update from the Federal Trade Commission (FTC).
The FTC Click-to-Cancel Rule, part of the broader Negative Option Rule, is designed to protect consumers by making cancellations as easy as sign-ups. With compliance deadlines approaching, American gym owners must take action to ensure their membership agreements and cancellation policies align with these new federal requirements
Here’s what gym owners need to know—and what steps they should take—to avoid compliance issues and potential fines.
What Is the FTC Click-to-Cancel Rule?
The Click-to-Cancel Rule is part of the FTC’s Negative Option Rule, which aims to prevent deceptive practices related to automatic renewals, subscriptions and free trials that convert into paid memberships.
The key change? If your gym allows members to sign up online, it must also allow them to cancel online—without unnecessary obstacles or hoops to jump through.
This rule applies to any business offering recurring-payment services, including fitness centers, martial-arts studios, personal training centers, and online coaching programs.
The FTC finalized the rule in March 2024, and unless it’s legally contested, businesses must be in compliance by May 2025. While challenges could delay enforcement, gym owners should prepare now to avoid compliance headaches down the road.
Key Provisions for Gym Owners
1. Cancelling Must Be as Easy as Signing Up
Under the new rule, your cancellation method must match your sign-up process in simplicity. This means:
- If members sign up on your website, they must be able to cancel on your website—without needing to call, email or visit in person.
- You can’t use long-winded forms, multi-step processes or confusing menus that frustrate customers.
- You can’t require members to speak with a representative before they can cancel (no forced “exit interviews”).
- If a member joins by coming in for a No Sweat Intro/free in-person consultation, an exit interview would be acceptable; however, you must process the cancellation first. You can’t have the exit interview prior to processing the cancellation.
What to do now: Review your sign-up process and make sure your cancellation method mirrors it. If your gym relies on a phone call or in-person visit to cancel, you’ll need to implement an online cancellation option.
2. Clear and Conspicuous Disclosures
The FTC is cracking down on businesses that don’t provide clear information about renewals, fees and cancellation policies. Before a customer is charged for renewal, they must be notified about:
- The cost and frequency of the recurring charge.
- The exact cancellation process.
- Any important restrictions, notice periods or fees related to cancellation.
What to do now: Check your membership agreements and website terms to ensure they clearly outline cancellation terms and renewal disclosures. These terms must be easy to find—not buried in fine print.
3. Express Consent for Automatic Payments
To prevent misleading enrollments, the FTC now requires businesses to get explicit written consent for automatic charges. This means gym owners must:
- Clearly separate the agreement to be charged automatically from other membership terms.
- Not hide renewal terms within lengthy contracts or checkboxes.
Some software providers might need to update their client management systems to accommodate this rule.
What to do now: Audit your payment authorization forms and digital checkouts to ensure they include separate, explicit consent for auto renewals.
4. “Save the Sale” Tactics Are Limited
A common business practice is to offer discounts or pauses or make other retention efforts when a customer tries to cancel. While this isn’t entirely banned, the FTC states that:
- Businesses must first process the cancellation request before presenting any offers.
- Customers cannot be required to listen to additional offers before canceling.
What to do now: Update your staff training and scripts to ensure that retention efforts don’t delay or obstruct a cancellation request.
Why Gym Owners Need to Act Now
Many gyms aren’t compliant yet, and waiting until the last minute could mean rushing costly updates. Here’s why you should start making changes now:
- Potential fines and legal risks—Non-compliance could lead to FTC penalties, refund requirements and even lawsuits.
- State-level enforcement—Many states are already enforcing their own versions of this rule, so you might already be required to comply at the state level.
- Member experience and reputation—If your gym makes it hard for people to cancel, it can lead to negative reviews, complaints and a damaged reputation.
What Gym Owners Should Do Next
- Audit Your membership agreement: Ensure cancellation terms are clear, compliant and not buried in lengthy contracts.
- Update your website and software: Add an online cancellation method that mirrors the sign-up process.
- Train your staff: Make sure your team understands the new rules and doesn’t create unnecessary barriers for members who are trying to cancel.
- Monitor legal challenges: If lawsuits delay enforcement, stay informed—but don’t assume compliance won’t eventually be required.
- Consult legal experts: Don’t navigate this alone. A legal audit can help you identify compliance gaps before they become an issue.
Need Help Updating Your Membership Agreements?
Gym Lawyers PLLC specializes in protecting fitness business owners from legal pitfalls. If you’re unsure if your membership agreements or cancellation policies comply with the new FTC rules, schedule a free legal audit with our team today.
Final Thoughts
The FTC Click-to-Cancel Rule is coming, and gym owners need to act now to stay ahead of compliance requirements. The best approach? Make cancellations simple, transparent and hassle-free—not only to avoid legal trouble but also to build trust with your members.
Start reviewing your agreements today so that when enforcement kicks in, your gym is ahead of the game.
