Term Paper on "Legal Issues and Legal Structure of Starting My Own Gym"

Term Paper 15 pages (5046 words) Sources: 5

[EXCERPT] . . . .

Legal Issues and Legal Structure of Starting and Operating Anyname Fitness Center, LP

There are some interesting dynamics at work in determining the feasibility of creating any new enterprise in the current economic climate, but these issues are particularly pronounced as they relate to the establishment of a public gymnasium or other fitness-related business. On the one hand, fitness awareness has significantly increased through the American demographic, but on the other hand, the nation is faced with a virtual epidemic in obesity due in large part to the increasingly sedentary lifestyle that characterizes modern society. Despite these latter constraints, it is apparent that there are numerous examples of well-operated fitness-related facilities that are enjoying healthy profits, making the creation of such a facility a timely and relevant enterprise that also forms the focus of this study. The purpose of this paper was to provide a review of the relevant literature to identify and describe the legal structure of a gymnasium and some of the typical contractual arrangements that will be encountered during its establishment and as part of its day-to-day operation. To this end, an analysis of pertinent issues that should be taken into account that relate to the type of facility that is involved and corresponding management and marketing concerns is followed by a background of the activities involved in a typical gymnasium operated as a limited partnership, and a proposed business model for the partnership. A discussion of the various legal issues and documentary requirements that are involved in creating and operating a limited partnership is followed by a recommendation concerning how the enterprise should proceed and a summary of the research in the conclusion.

A.

WHY DOES a GYM FIT a NEED? Gymnasiums (hereinafter alternatively "gyms," "fitness centers" or "fitness facilities") serve a wide range of needs in contemporary American society, ranging from meeting the purely physical fitness-related needs of people to those that are more related to socialization and, by extension, romance and dating (Cruz-George, 2007. Therefore, the type of gym structure that is used and the specific corresponding legal factors that are involved will depend on the market being targeted. For example, gymnasiums providing services for single-sex gym classes in a private school setting will have very different legal considerations than a public co-ed facility that is targeting young, unmarried and affluent members of the community. Targeting this segment of the demographic would appear to be a good place to start for a new enterprise as well. For instance, Mealey (1997) examined the reasons why most people sought out a public gymnasium and the types of exercise equipment they used during their visits and found some interesting relationships between the two variables. The gym clientele that was found to be more interested in establishing relationships used exercise equipment that maximized their opportunities for communication with members of the opposite sex as well as those that accentuated the physical attributes the respondents believed were most attractive (Mealey, 1997). According to Mealey, "Many men and women who use athletic training equipment do so in an attempt to increase their physical attractiveness to potential mating partners and thus use athletic equipment in ways that would exaggerate physical, biological gender signals" (Mealy, 1997, p. 224).

These behaviors even extended to more recent innovations in physical fitness training equipment that are specifically intended to reduce gender-related disparities. In this regard, Mealy notes that, "Men tailored their workouts in ways that would enhance the musculature of the upper body, and women tailored their workouts in ways that would enhance leg and hip muscle" (p. 224). These findings held consistent for three independent samples of analyzed for both males and females, but were most pronounced among the younger, college-aged samples who reported that "appearance to opposite sex was one of the most important reasons for working out" (quoted in Mealey, 1997 at p. 224). Therefore, the age and gender(s) of the market being targeted will have some influence over what type of physical fitness equipment is used and what type of training regimens will be offered. In addition, the levels of privacy that a gym offers will directly relate to what type of market is being targeted.

B.

BACKGROUND. With a history dating to the ancient Greeks who were fond of using the facilities for socialization besides physical fitness activities, gymnasia have served as meeting places and exercise venues for humankind for thousands of years (Rahe, 1993). While the basic purposes of gyms have not changed that much since the days of the ancient Greeks, the equipment and methods used have changed in fundamental ways. Although most gyms today offer a variety of exercise equipment and classes, a weight room, a locker room, and qualified trainers, they differ in many ways depending on these factors and how they relate to the fitness goals of existing and potential clientele. In order to ensure that the facility meets the changing needs its clientele, the features outlined in Appendix a must be taken into account. There are also some environmental issues such as temperature and noise levels that must be taken into consideration when operating a public gymnasium. According to West (2006), "The temperature should be what is comfortable for your clients. It will be different for each of your classes. I suggest that the issue be resolved at the management level since they will be responsible for the overheated client in a room that is set too warm for regular aerobics classes. I consider 70 degrees too high for regular aerobic classes. It would probably be fine for the over 60 crowd. For an aerobics class, a room temperature of no higher than 68 degrees and 50% humidity is recommended" (p. 17). Gym operators who are in doubt concerning optimum temperature levels should consult with their clientele as well as the relevant Occupational Safety and Health Administration (OSHA) guidelines which recommend a workplace temperature control in the range of 68-76 degrees F. And humidity control in the range of 20%-60% as set forth in the OSHA Manual which also provides corresponding allowable noise ranges depending on the activities that are involved (West, 2006; Temperature, 2007). In addition, some upscale gym operators have even recruiting the services of feng shui experts to help them provide an atmosphere that is conducive to promoting harmonious environmental conditions for their clients (Wu, 2005). The private gym enterprise targeting middle-class young adults discussed herein, though, will not require a feng shui expert but it will require a viable business model that can be used to help guide its activities in the short-term and provide the basis for growth in the long-term and this model is discussed further below.

C.

Business MODEL

The business model to be used in this private gym enterprise will be based on a goal of providing physical fitness activities and equipment that can be used by the young adults with or without children in the home by offering a family-friendly environment that features on-site childcare. The business model calls for the company's clientele to receive a personalized training regimen and attention from the training staff so that clientele can pursue their physical fitness goals in effective ways. The private gym will have a target market of members who are aged 45 years or under and who have young children in the family. Initially, onsite childcare facilities operated by the gym will accommodate 25 children (including five infants) with plans to expand this service depending on the level of demand. The combination of state-of-the-art exercise equipment, facilities, expert trainers and on-site childcare will be the primary competitive advantage for this business. Initial staffing requirements are set forth in Table 1 below as well as projected salary ranges for these positions.

Table 1

Staffing requirements and projected salaries for a private gym

Personnel

2010

2011

2012

Center Manager (general partner)

$48,000

$50,000

$52,000

Assistant Manager (general partner)

$36,000

$38,000

$40,000

Center Staff

$240,000

$270,000

$300,000

Childcare Manager (general partner)

$30,000

$32,000

$34,000

Childcare Staff

$147,000

$170,000

$200,000

Tennis Manager

$30,000

$32,000

$34,000

Source: Workout Gym Business Plan for Mountain Brook Fitness Center (2007) at http://www.bplans.com/workout_gym_business_plan/management_summary_fc.cfm

D.

MISSION STATEMENT. The mission statement will be included as part of the partnership agreement (discussed further below) and will state that, "It is the mission of Anyname Fitness Center, LP to provide that high-quality physical fitness services in an affordable environment that is conducive to physical fitness activities using the best equipment and trainers available to grow the business for the mutual profitability of its general and limited partners and the physical fitness of the clientele it serves."

E.

STATEMENT of PERTINENT POINTS in PAPER. The following issues are discussed to varying degrees as they relate to their implications for the general and limited partners in a limited partnership in general and for one operating in the State of Missouri in particular. The topics so discussed concern the legal issues involved in creating and operating a limited partnership, its structure and an analysis of its suitability for the gymnasium enterprise outlined… READ MORE

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