This is a business question. We have guys sign up for an agreement (say for a year) and sometimes they just stop showing up and, of course, their credit card or checking account starts getting denied. What do you guys do in that situation?
So far, we've just kept attempting to charge every month. Sometimes we get lucky and a payment will go through, but usually it's just another "Denied".
Thanks for the input.
You guys don't own a gym, do you? I ask because perspective changes depending on your role at the gym. This is a business, and like with any business if you agree to a contracted amount of time, you are liable for that. I give a significant discount to sign a year agreement so when they stop showing up and paying, they are ripping me off because they were getting a discounted rate the whole time. I also only charge $125 for early cancellation.
get new customers, deadbeat gym owner
TurnbuckleWally - You guys don't own a gym, do you? I ask because perspective changes depending on your role at the gym. This is a business, and like with any business if you agree to a contracted amount of time, you are liable for that. I give a significant discount to sign a year agreement so when they stop showing up and paying, they are ripping me off because they were getting a discounted rate the whole time. I also only charge $125 for early cancellation.
at torrance all you have to do is give 30 days notice ,even if it a 1 yr contract
Don't offer contracts, do everything by the month or punch card. Problem solved.
Tons of schools make you sign contracts- this will probably be the standard in the upcoming years.
Not saying I agree with it- but I understand where the owners are coming from.
ultimatestreetfighter - do you really expect someone to pay you a years worth of fees if they aren't training? stop being so greedy bro.
Are contracts no longer legally binding? If you fall behind in your car note and they repossess, should you not be liable for the balance since you're no longer using the car?
As a consumer and martial artist, I dislike contracts because I think they cheapen the experience. But from a business perspective, people need and should be able to protect themselves financially. And combined with automatic billing, it does tend to make the day to day, face to face instructor-student situation a little less awkward in terms of delinquency.
What if the car breaks down? Should I still have to make payments?
Contracts are the way to go if your wanting to run a real business and have staff such as BJJ Blackbelts teaching. If your only running a school as a hobby then no need for contracts.
I think there is a distinct line between a martial artist and a business man. I love Jiu jitsu, however, I have to work a full time job to pay my bills as well. I consider my bjj dues a monthly expense. If I were to sign a contract to purchase anything, I would expect to have to fulfill that contract or incur some type of penalty or cancelation fees. That is life. These guys are adults. Unfortunately, we can just decide to stop paying our bills.
Have you considered some collection process? 
I love when guys say..."I'm going away for a week or two can I make it up or freeze my account?" I usually ask them if they freeze their Comcast account, or their car insurance or their anything.
That being said, do you really want someone in your school that stops coming and then declines? It's pretty obvious that there is little relationship if they couldn't speak with you about either their financial situation or changes in their life where they would need to stop training.
they agreed to pay a certain amount for a year. if they didn't like it they shouldn't have agreed to it. send them to collections.
Just keep billing them for whatever the signed for. Your billing co should send them to collections. If they bounce, and aren't showing up there really isn't too much they can do. Just keep moving forward trying to bring in new students.
Really these contracts aren't super binding agreements. They are just an extra layer of protection for the gym owner to prevent deadbeatism.
Many times these contracts are not enforceable, as many states have laws prohibiting abusive gym contracts. There is little good economic reason for a gym contract (whether regular or martial arts) to impose a long-term liability if the person is not even training there anymore, or wants out.
Simple solution:
Charge leveraged fees:
eg: monthly fee is $100. Yearly fee is $800.
So charge $800 for the first 8 months and then $0 for the next four months. If they leave early, they still paid full price.
Of course, that means you can't 'lock' them in to binding contracts, so you'll have to actually focus on student retention and quality of instruction.
If you get a student into your gym for 8 months and he decides it isn't for him, you should in all good conscience let him go with a thank-you and then assess the reasons why he left instead of trying to force him to support your gym.
The gym I worked at used a billing agency. If they stopped paying we sent them to collections. You could pay month to month, cash, or you could get a huge discount to sign a contract. If you took that huge discount and signed that contract then we where going to do everything legal to get our money.
if you are offering a discount for a whole year, get that in one lump sum, at the begining.
6 months, u pay more, but still one payment.
monthly, no discount, month to month.
punchcards, $15 per class, $150 for a 10 punch card.....
also a single training fee for visitors. ( 1-3 times in a week??)
ultimatestreetfighter - lol. what gym do you own? because i would avoid it like the plague. it sounds like you are just out to squeeze as much money out of people as possible.
do you really expect someone to pay you a years worth of fees if they aren't training? stop being so greedy bro.
The guy can simply talk to the gym owner to figure it out. In this case this guy signed a contract and stopped showing up. How does that make the gym owner greedy?
The owner is holding up his deal, keeping the gym running and open for this dude to come in whenever he wants. This student signed a contract and it's up to him whether he shows up or not.
I do contracts at my gym and the longest contract is 6 months. I still get people that sometimes don't pay but I think I would have more if I did a year contract. I think it is tough for most hobby bjj folks to stay committed for a year. So I chose to do 6 month contracts.
Glad to see there's rationale people here. As stated already; a contract is a contract. I can't tell my cable company I don't need to fulfill my 2 year agreement that I signed on for because I decided to read books in my free time. Or I'm going away on vacation for 2 weeks so please don't bill me for that time. Either I use it or I don't. If I want out, I pay for early cancellation (an option I offer) or I fulfill my agreement. People think MA gyms are different because we build personal relationships, but they shouldn't be. This is business, not personal.
A MA gym is extremely difficult to turn into a living and anyone serious about doing it and treating it as more than a hobby needs to find ways to make it profitable. If you want to train with a hobbyist who doesn't need the money, go for it, but if you want to train with us, realize this is a business to us.
As for month-to-month instead of an agreement that's not for me because it's extremely unreliable. A guy owes on the 1st, but doesn't get in for the first 2 weeks because he had finals at school and then wants to just pay for 1/2 the month. Bullshit. It's use it or lose it. Sorry if you don't agree but I was a student once and once paid for 2 months where I was injured and couldn't train at all. I kept paying because I understood that my payments contributed to the gym and helped keep it open. Fuck, I wasn't even under contract at the time, I just knew that the gym's bills didn't get any less because I wasn't there.
With all that said, I have guys at my gym I've given and currently are giving free rides to when they fell into rough times. I have no problem releasing you from a contract if you lose your job, are moving, have a major injury or illness that's going to keep you out for awhile, get called away for military or any other rationale reason AND are man enough to talk to me about it. The guys who tell me they're going to be in the UFC one day and train 5 days a week and then stop showing up 2 weeks later and stop returning phone calls and emails, well fuck them. I'll take every penny I can extract out them.
Trust me, as a gym owner this happens all the time. The turnover rate in BJJ & MMA is very high and considering I give discounted rates and FREE incentive items, like FREE gear, to sign longer contracts means that you should honor the contract. End of story.