The Future of Fitness Contracts: Why “Easy Cancel” Isn’t Enough
Over $2.2 billion annually rides on gym memberships in Australia, a figure that represents a powerful incentive for fitness centers to lock customers into long-term contracts. But a growing wave of consumer advocacy, coupled with failed attempts at legislation mirroring a Biden-administration push in the US, is forcing a reckoning. The debate isn’t just about convenience; it’s about a fundamental shift in how we view subscription services and the power dynamic between businesses and consumers. And while the call for “easy cancel” policies is gaining momentum, it may only be the first step in a much larger transformation.
The Subscription Trap: Beyond Just Gyms
Consumer groups are rightly targeting the often-onerous terms attached to gym memberships – the mandatory in-person cancellation meetings, the exorbitant exit fees, the limitations on pausing memberships. These practices aren’t unique to fitness; they’re part of a broader trend of “subscription traps” that have proliferated across various industries, from streaming services to software. As Erin Turner, CEO of the Consumer Policy Research Centre (CPRC), points out, gyms were arguably the originators of these tactics, which have now become commonplace online. The core issue is a power imbalance: making it significantly harder to leave a contract than it was to join.
The Legal Hurdles and Industry Pushback
Recent attempts to legislate easier cancellation processes have stumbled. A US federal appeals court struck down similar laws due to procedural issues, highlighting the legal complexities involved. Within the Australian fitness industry, there’s resistance. AUSactive, the peak body, argues that revenue certainty from memberships is crucial for operational stability, allowing gyms to employ staff and maintain facilities. Lynsey McGee, co-owner of Hiscoes gym in Sydney, emphasizes that membership revenue is “far and away how we make money.” This isn’t simply about profit margins; it’s about the viability of the business model, particularly for smaller operators.
The Two-Sided Coin: Certainty vs. Flexibility
The tension lies in balancing the needs of businesses – predictable income streams – with the rights of consumers – the freedom to choose and easily exit contracts. Gyms argue they provide a service even when members don’t actively use it, incurring costs for maintaining equipment and reserving class spaces. However, this argument rings hollow when cancellation is deliberately made difficult. The current system often prioritizes retaining customers through friction rather than fostering loyalty through value. This is where the conversation needs to evolve.
Short-Term Solutions: A Path Forward for Smaller Gyms
Independent gyms like Hiscoes are already demonstrating a potential solution: embracing shorter-term memberships and streamlining the cancellation process. Mac Redinbaugh notes that making cancellation easy has actually led to members returning, suggesting that transparency and respect build trust. This approach is particularly viable for community-focused gyms where reputation is paramount. “If I was making any part of this process unpleasant, I’d have to eat breakfast next to these people whose lives I’ve made harder,” Redinbaugh wryly observes.
The Rise of “Fairness as a Feature”
The future of fitness contracts – and subscription models in general – likely lies in what we might call “fairness as a feature.” Instead of viewing easy cancellation as a concession, businesses will increasingly recognize it as a competitive advantage. Consumers are becoming more savvy and are actively seeking out brands that prioritize transparency and respect. This shift is driven by several factors, including the increasing availability of alternatives and the growing awareness of consumer rights. Choice Australia provides a comprehensive overview of consumer rights, empowering individuals to demand fairer treatment.
Beyond Cancellation: The Need for Proactive Transparency
While simplifying cancellation is essential, it’s not a panacea. The focus needs to broaden to include proactive transparency in contract terms, an end to high-pressure sales tactics (particularly targeting free trial registrants), and standardized cooling-off periods. The voluntary code of conduct offered by AUSactive is a step in the right direction, but a more robust and universally adopted framework is needed. Ultimately, the goal should be to create a system where consumers feel empowered, not trapped.
The debate surrounding gym memberships is a microcosm of a larger societal shift towards greater consumer control and corporate accountability. As subscription models continue to dominate the economy, the demand for fairness and transparency will only intensify. The businesses that adapt and embrace these principles will be the ones that thrive in the long run. What changes do you foresee in the fitness industry’s approach to contracts in the next five years? Share your thoughts in the comments below!
