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The Florida Senate

2012 Florida Statutes

Title XXXIII REGULATION OF TRADE, COMMERCE, INVESTMENTS, AND SOLICITATIONS
Chapter 501 CONSUMER PROTECTION Entire Chapter
SECTION 016
Health studios; security requirements.
F.S. 501.016
501.016 Health studios; security requirements.—Each health studio that sells contracts for health studio services shall meet the following requirements:
(1) Each health studio shall maintain for each separate business location a bond issued by a surety company admitted to do business in this state. The principal sum of the bond shall be $50,000, and the bond, when required, shall be obtained before a business tax receipt may be issued under chapter 205. Upon issuance of a business tax receipt, the licensing authority shall immediately notify the department of such issuance in a manner established by the department by rule. The bond shall be in favor of the state for the benefit of any person injured as a result of a violation of ss. 501.012-501.019. The aggregate liability of the surety to all persons for all breaches of the conditions of the bonds provided herein shall in no event exceed the amount of the bond. The original surety bond required by this section shall be filed with the department.
(2) In lieu of maintaining the bond required in subsection (1), the health studio may furnish to the department:
(a) An irrevocable letter of credit from any foreign or domestic bank in the amount of $50,000; or
(b) A guaranty agreement which is secured by a certificate of deposit in the amount of $50,000.

The original letter of credit or certificate of deposit submitted in lieu of the bond shall be filed with the department. The department shall decide whether the security furnished in lieu of bond by the health studio is in compliance with the requirements of this section.

(3) A health studio which sells contracts for future health studio services and which collects direct payment on a monthly basis for those services shall be exempt from the security requirements of subsections (1) and (2) provided that any service fee charged is a reasonable and fair service fee. The number of monthly payments in such a contract shall be equal to the number of months in the contract. The contract shall conform to all the requirements for future health studio services contracts as specified in ss. 501.012-501.019 and shall specify in the terms of the contract the charges to be assessed for those health studio services.
(4) If the health studio furnishes the department with evidence satisfactory to the department that the aggregate dollar amount of all current outstanding contracts of the health studio is less than $5,000, the department may, at its discretion, reduce the principal amount of the surety bond or other sufficient financial responsibility required in subsections (1) and (2) to a sum of not less than $10,000. However, at any time the aggregate dollar amount of such contracts exceeds $5,000, the health studio shall so notify the department and shall thereupon provide the bond or other documentation as required in subsections (1) and (2). Health studios whose bonds have been reduced must provide the department with an annually updated list of members. Failure to file an annual report will result in the department raising the security requirement to $50,000.
(5) Each health studio shall furnish the department with a copy of the escrow account which would contain all funds received for future consumer services, whether by contract or otherwise, sold prior to the business location’s full operation and specify a date certain for opening, if such an escrow account is established.
(6) Subsections (1) and (2) shall not apply to a health studio that has been operating continuously under the same ownership and control for the most recent 5-year period in compliance with ss. 501.012-501.019 and the rules adopted thereunder and that has not had any civil, criminal, or administrative adjudication against it by any state or federal agency; and that has a satisfactory consumer complaint history. As used in this subsection, the term “satisfactory consumer complaint history” means that no unresolved consumer complaints regarding the health studio are on file with the department. A consumer complaint is unresolved if a health studio has not responded to the department’s efforts to mediate the complaint or if there has been an adjudication that the health studio has violated ss. 501.012-501.019 or the rules adopted thereunder. Such exemption extends to all current and future business locations of an exempt health studio.
(7) A business, otherwise defined as a health studio, which sells a single contract of 30 days or less to any member without any option for renewal or any other condition which establishes any right in the member beyond the term of such contract is exempt from the provisions of this section. This exemption shall not apply if the business offers any other health studio contract of whatever duration at any time during or prior to the existence of such single contract of 30 days or less.
(8) Except in the case of a natural disaster or an act of God, a health studio that is exempt from the requirements of subsections (1) and (2), but that has no business locations open for 14 consecutive days, waives its exemption and is considered to be a new health studio for the purposes of ss. 501.012-501.019.
History.—s. 6, ch. 90-312; s. 14, ch. 91-201; s. 4, ch. 91-429; s. 57, ch. 92-291; s. 2, ch. 94-298; s. 8, ch. 97-250; s. 124, ch. 2007-5.