Burbank Municipal Code Art. 24 Health Clubs (CA)

3-4-2401: INTENT AND PURPOSE:

The purpose of this section is to serve the interests of citizens who utilize health club services within the City of Burbank, and specifically to provide such citizens with an effective and expedient method of obtaining refunds in the event their health club ceases to operate and thereafter fails to provide prompt and equitable refunds. Nothing in this chapter is intended to limit or be inconsistent with the provisions or requirements of California Civil Code Section 1812.80 et seq. [Added by Ord. No. 3369, eff. 4/23/94.]

3-4-2402: DEFINITIONS:

For the purposes of this article, the following words or phrases shall have the following meanings:

BOND: Shall mean a surety or financial guaranty bond executed through an admitted surety or insurer in a manner approved by the City Attorney, assuring refunds to consumers whose health club closes and terminates operations, and thereafter fails to provide refunds within thirty (30) days of such closure.

HEALTH CLUB: Shall mean any corporation, business organization or other entity which offers or provides to the public, on a membership basis, services, facilities, instruction, training or assistance in body building, exercising, reducing, figure development, aerobics, or any other similar physical activity.

HEALTH CLUB CLOSURE: Shall mean the discontinuation of health club services pursuant to the terms and conditions set forth, and at the location specified, in the original health club contract. This shall not include temporary closures for a period of fourteen (14) days or less, or for such longer period of time that may be demonstrated to the City’s Community Development Diector, or their designee, as being reasonably necessary for the purpose of making repairs or alterations to existing health club facilities.

HEALTH CLUB CONTRACT: Shall mean any contract in the form and manner prescribed by California Civil Code Section 1812.80 et seq., between a health club and consumer for health club services.

REFUND: Shall mean the return to the consumer of an amount equal to the prorated value of the remaining time on a health club contract at the time of a health club closure. Initiation and processing fees, if any, shall be included as part of the refund if such fees were paid within two (2) years of the date of the health club closure. [Added by Ord. No. 3369, eff. 4/23/94; Amended by Ord. No. 3828, eff. 8/24/12.]

3-4-2403: LICENSE AND PERMIT REQUIREMENTS:

No person, corporation, business organization or other entity shall engage in or otherwise operate as a “health club” within the meaning of Section 3-4-2402 of this article without first having obtained a business license and permit issued by the Community Development Director, or their designee, subject to the requirements set forth within this article. Subsequent to the issuance of any health club business license and permit under this chapter, said business license and permit shall at all times be conspicuously displayed for public view upon the health club premises. [Added by Ord. No. 3369, eff. 4/23/94; Amended by Ord. No. 3828, eff. 8/24/12.]

3-4-2404: BOND REQUIREMENTS:

No business license or permit shall be issued or renewed under this chapter unless the applicant, concurrent with the submission of a business license, permit or tax certificate application, files a “bond”, as defined in Section 3-4-2402 of this article, with the Community Development Director, or their designee, meeting all of the following requirements and conditions:

A. The surety or financial guaranty bond is in the amount set forth in the Burbank Fee Resolution;

B. The surety or financial guaranty bond becomes expressly enforceable upon the applicant’s failure to provide proof to the Community Development Director, or their designee, that full refunds, as defined within Section 3-4-2402 of this article, have been made to all members of said health club within thirty (30) days of the date of the health club closure;

C. The surety or financial guaranty bond contains an express acknowledgement by the admitted surety insurer of its obligations, pursuant to a health club closure, to calculate and administer all claims for refunds to all health club members following said health club’s closure; and

D. The surety or financial guaranty bond shall be maintained in full force and effect in the required amounts and pursuant to all express provisions set forth within this chapter, as a condition for allowing any health club to continue to conduct operations within the City of Burbank. Any business license, permit, or tax certificate issued pursuant to this code, shall become automatically revoked at such time that any bond, for whatever reason(s), ceases to be valid.

E. Health clubs with more than one (1) location in the City, which have the same business name, and are vested and operate under the same ownership, including but not limited to a sole proprietorship, corporation, partnership, or limited partnership, shall meet the bonding requirements of this Article by providing one (1) health club bond to satisfy the bonding requirements for up to two (2) separate health club locations. Thereafter, each required health club bond shall satisfy the bonding requirements for up to two (2) separate health club locations provided that the health club locations have the same business name, and are vested and operate under the same ownership, including but not limited to a sole proprietorship, corporation, partnership, or limited partnership. [Added by Ord. No. 3369, eff. 4/23/94; Amended by Ord. No. 3828, eff. 8/24/12; 3763, 3623.]

3-4-2405: ADMINISTRATION OF REFUNDS PURSUANT TO HEALTH CLUB CLOSURE:

A. Processing and Disbursement of Refunds: If, within thirty (30) days following a health club closure, any health club fails to return to its members all appropriate refunds as defined within Section 3-4- 2402 of this article, the admitted surety insurer issuing a surety or financial guaranty bond required under Section 3-4-2404 of this article, shall thereafter have all of the following obligations:

To establish a health club refund account comprised of the bond proceeds forfeited by a health club upon the failure to meet its refund obligations following the health club’s closure;
To receive and review all membership claims for refunds following the health club closure; and
To determine the validity of all membership claims for refunds following the health club closure, and to disburse refunds to those members entitled to receive them.

B. Limitations on Refund Claims: Unless good cause is shown, no claim for a refund shall be paid to any health club member after six (6) months from the date of the health club closure. Nothing in this section shall limit or otherwise affect the rights of health club members to pursue alternative civil remedies that may be available to them under State or Federal law. [Added by Ord. No. 3369, eff. 4/23/94.]

3-4-2406: EXEMPTIONS:

The provisions of Section 3-4-2404 of this article requiring a surety or financial guaranty bond, shall not be made applicable to any corporation, business organization or other entity which is eligible for an exemption based on any one of the following criteria:

A. The corporation, business organization or other entity does not fall within the definition of a “health club” as set forth within the provisions of Section 3-4-2402 of this article, including, but not limited to, any of the following:

Any corporation, business organization or other entity offering facilities, instruction, training or assistance exclusively in conjunction with any of the martial arts;
Any corporation, business organization or other entity offering facilities, instruction, training or assistance exclusively in conjunction with the areas of diet or weight loss; and
Any corporation, business organization or other entity offering facilities, instruction, training or assistance exclusively in conjunction with the areas of dance or ballet.

B. The health club is a nonprofit organization eligible for a tax exemption pursuant to California Revenue and Taxation Code Section 23701(d);

C. The health club does not require or accept prepayment of membership fees or other service charges for any time period greater than one month in advance, and does not impose any separate initiation fee in excess of one month’s prepaid fees or other service charges. [Added by Ord. No. 3369, eff. 4/23/94.]

3-4-2407: APPLICANT BACKGROUND INVESTIGATIONS:

A. The City’s Community Development Director, or their designee, acting in conjunction with the Chief of Police, or their designee, may direct an investigation into the background of any applicant for a health club business license, permit or tax certificate, or any agent or other person or entity who may be required to be named on an application by the Community Development Director, or their designee, relevant to any of the following factors, the existence of any one of which may be determinative insofar as the issuance or denial of a business license or permit under this chapter:

That operation of the health club in the location specified would be violative of any existing laws or ordinances; or
That any applicant, agent or other person or entity required to be named on the application for business license, permit or tax certificate has, within five (5) years of the date of said application, been convicted of any crime that is reasonably related to the qualifications, duties or performance of the health club enterprise for which a business license, permit or tax certificate is sought; or
That any applicant, agent or other person or entity required to be named on the application for business license, permit or tax certificate has, within five (5) years of the date of said application, committed any act which would be grounds for suspension or revocation of any other existing health club license or permit; or
That any applicant, agent or other person or entity required to be named on the application for business license, permit or tax certificate has, within five (5) years of said application, committed any act involving fraud, dishonesty, deceit, or moral turpitude; or
That any applicant, agent or other person or entity required to be named on the application for business license, permit or tax certificate has knowingly, and with the intent to deceive, made any false, misleading or fraudulent statement of fact in connection with the City’s application process.

B. Any modification of information required to be included in an application for a health club business license, permit or tax certificate shall be reported to the Community Development Director within twenty-four (24) hours after such modification becomes effective. [Added by Ord. No. 3369, eff. 4/23/94; Amended by Ord. No. 3828, eff. 8/24/12.]

3-4-2408: TRANSFERABILITY OF BUSINESS LICENSE:

No business license, permit or tax certificate issued to any health club applicant pursuant to the provisions of this chapter is assignable, delegable or otherwise transferable. [Added by Ord. No. 3369, eff. 4/23/94.]