If you’re like most people, you overindulged in calories during the holidays and then made a New Year’s resolution to eat better and exercise more. Here’s a warning so you can avoid getting eaten alive by gym salespeople.
The health club industry basically has two business models. In the good one, you pay month-to-month or quarterly with no real contract. But the sleazy business model involves long-term contracts designed to give your checking account a workout.
With the sleazoids, the downfall begins when they offer you a free tour of their facilities. The tour is done by a commissioned salesperson with the intention of getting you to sign a multi-year contract.
Once you sign that contract, the gym does what’s called “moving paper.” They sell it to a finance company that will take the note on for pennies on the dollar. That creates additional incentive for the club to sign up more members — and hope none of them ever show up to work out at once.
In a recent filing for the Securities and Exchange Commission, Bally Total Fitness disclosed that the average member visits the club one-half of one time per week. You’d be hard-pressed to find any fitness expert who recommends a full workout once every two weeks!
I recommend checking out hospital-affiliated fitness centers. They’re usually rehab-based or geared toward the hospital staff. They’re clean, well run and don’t force contracts. Most will sell memberships to the public. Visit the hospital nearest you to see if a gym is available.
Another option I’ve noticed are no-frills gyms that are open 24 hours and tend to price out at around $15 each month with no contract. But beware they may not even have showers; they simply offer exercise equipment at rock-bottom prices.
-by Clark Howard, Save More, Spend Less, Avoid Rip-offs