Welcome to the AB Forum

We recently had a fire sprinkler go off in our gymnasium subsequently flooding and requiring us to do a full floor replacement. We are a membership based community center and as a result have had many questions about refunds for memberships, etc. The rest of our facility including fitness center, running track, and 3 pools will remain open for members. My question to others who have found themselves in similar situations is: 1. What was your response to your membership? Did you provide any refunds, membership extensions, etc? Did you do a blanket policy for all members or handle on a case-by-case basis? Any thoughts would be helpful. Thanks, Justin

I’ve run into situations like this before. I can't remember any instances where we gave refunds to customers. The difficult issue here is how do you determine who to give the refunds to and how much. Can you prove which members were most affected by the loss of the facility? If you decide to pay them other members may say their use opportunities have been diminished and they want to be reimbursed as well. If you have a sure way of determining who to reimburse then you may find that to be your best solution but again, in my experience managing and consulting, I haven’t seen anything as cut and dry as that. If you decide that some compensation must be give it is much better as a free services (i.e. personal training) which have a cost but not the full credited value. Another route you can pursue is to see if your business insurance will cover you for loss of revenue due to the flooding. Some do, and in that case you could do a variety of different things with the compensation from insurance. You could use that money to pay back certain or all customers or to provide membership extensions, but again this is risky as it is a very touchy subject and could create a precedent which could come back to haunt you in the future. Lastly, check to see if your membership agreement has any clauses stating that the club may not be fully available for use at all times. Usually these clauses are included to provide you protection against loss of use due to maintenance or equipment replacement. Good Luck! http://www.healthclubconsultants.com