Making the leap to start, grow or relocate your fitness business should be an exciting time. But don’t let the allure of being a business owner distract you from the very real challenges that can come from poor planning at the outset. The ceiling leak and its eventual outcome is just one example of a scenario I hadn’t planned ahead for when I owned a boutique fitness studio. I never shy away from using my hard-learned lessons to help others avoid my mistakes— so here are the things that I wish someone had told me before I signed a lease for my fitness business.* 

Who is responsible for what? 

One of the most important—and most expensive—contracts that you will sign during this process is a lease or rental agreement for the space. It is pivotal to delineate who is responsible for what and in what circumstances when it comes to the space. Keep in mind that space includes not only the physical rooms, but the walls, plumbing, roofing, sidewalks, parking spots and everything in between! You want to be sure that you and your business are protected, and that you’re fully aware of any risks that you are assuming.  

Insurance and liability

The safety of your space for staff and customers needs to be a top priority. Here are some questions to ask and scenarios to consider when it comes to your lease: 

• What kind of insurance does the property owner hold and what does it cover and not cover about your physical space, and are there special circumstances? In the case of my leaking ceiling, the property owner’s insurance covered the cost of repairing the building itself, but it did not cover my costs to replace any custom buildouts, like the specialty dance floor, which had water damage. Make sure you have a clear understanding of what is covered and what is not. I had assumed their insurance would cover scenarios like this, and ended up paying out of my pocket for repairs since I didn’t have the right coverage.
  
  It’s also important to note that it is very unlikely that the property owner’s insurance would cover your items in the space such as fitness equipment, computers or sound systems. Consider the following scenarios, which could all have different levels/types of coverage when it comes to insurance:
  • Natural disaster or act of god (e.g. flood, tornado, earthquake) 
  • Criminal act (e.g. vandalism, arson, robbery) 
  • Negligence (e.g. lack of maintenance leads to an electrical fire, another tenant in the building leaves the water on and multiple units flood) 

• What kind of insurance does the property owner hold and what does it cover and not cover regarding use of the space, and any shared spaces? Now we’re talking about humans and injuries or other losses. In nearly every scenario, if a customer is injured using the leased space as intended, for example, they trip over a piece of equipment or injure themselves during an exercise, that will need to be covered by your own liability insurance. But consider the following scenarios:
  • A customer in your space is injured as a result of a natural disaster, act of god or other building/facility-wide crisis (e.g. a customer is injured by shattered glass during a tornado) 
  • Your customer is injured when passing through shared space to reach or exit your space (e.g. they slip and fall on ice on the sidewalk) 
  • Incidents that occur after a customer leaves your space or the shared space (e.g. a customer consumes alcohol in your space at an event and gets into an accident on the way home)
  These scenarios can become very nuanced and will likely be very dependent on the type of space and shared space that exists. Additional considerations may need to be made. Get it all in writing!
• What insurance will you need to hold? Some property owners or management companies will require you to hold a certain type of insurance or have a minimum amount of coverage. Find out if there is a requirement, and then use the above considerations to determine what kind of insurance you will need to fill the gaps between the owner’s coverage and what you will need to be protected (in addition to your own personal liability insurance). This includes what insurance you will require any additional employees and/or independent contractors to secure for themselves. 
• Security cameras. Are there cameras in place in the facility, and if so, where? Is all footage recorded, and how long are those recordings kept? Can you install your own cameras within your space? All of this can be important should something occur in or around your space where liability is disputed or the circumstances are questioned. 

When reviewing the contract do not be shy about asking questions and seeking clarification, and certainly don’t make assumptions—if it’s not specifically outlined in the contract or an appendix, ask. 

Do not be afraid to ask for changes or to negotiate price, fees, or any other part of the contract. The worst they can say is no, and then you know for sure exactly what you’re committing yourself to. Additionally, do not assume requested changes have been made without reviewing the revised contract. 

It may seem like an added expense, but the fee you may pay to have a legal professional review a lease, or any contract related to your fitness business, before you sign it, can end up saving you thousands of dollars in the long-term. If you have partners in your business, it's also beneficial to consult a legal professional on how all parties should be attributed in the lease agreement so not one person is solely responsible for the risk. 

I hope that the lessons learned from my mistakes can help to save you both stress and money as you embark on your new business. I wish you the very best! 


Caitlin Kinser, M.S., has been teaching group exercise classes since 2010. She’s taught in a variety of settings including fitness studios, large gyms, college campuses, youth/community centers and virtually. She has taught multiple formats, but her heart belongs to dance fitness. Caitlin owned and operated a boutique fitness studio for two years prior to joining the professional staff at the American College of Sports Medicine^®, where she serves as the director of digital strategy.  


*Disclaimer: This blog is not legal advice. It is the sharing of one individual’s experience, and it is not meant to be an exhaustive list of all the things to consider when signing a lease or rental contract. To ensure that you’re fully protected and understand your risks before signing a lease or any contract relating to your business, consult with a legal professional.