How to Start a Gym, Fitness or Yoga Studio in Georgia: The Health Spa Act and Contract Rules

October 29, 2026

Most checklists for opening a gym or yoga studio focus on the lease, equipment and marketing. In Georgia, one law shapes the business more than any of those: the Georgia Health Spa Act. If you sell memberships, class packs or any multi-month agreement, the Act controls how long your contract can run, what it must say, how members can cancel, and when you may start selling. A non-compliant contract can be unenforceable, and you often learn that only after members have paid.

This guide covers the Act first, then the standard business steps: forming the entity, getting an EIN, obtaining the local license, registering for taxes, and insuring the business. It applies to gyms, fitness studios, and yoga and pilates studios alike.

This article is informational content, not legal or tax advice. Laws and agency practices change. Before you sell a membership, have a Georgia attorney review your contract and a CPA review your tax setup.

What the Georgia Health Spa Act covers

The Act is part of Georgia's Fair Business Practices Act (O.C.G.A. 10-1-393 and 10-1-393.2). The Attorney General's Consumer Protection Division enforces it.

A health spa is an establishment that provides, as one of its primary purposes, services or facilities meant to help patrons improve physical condition or appearance through weight change, weight control, treatment, dieting or exercise. The statute names gyms, health studios and health clubs. If exercise or fitness is a main reason people pay you, plan on the Act applying.

Three kinds of operations are excluded: nonprofit organizations, facilities wholly owned and operated by licensed physicians practicing medicine, and facilities operated by a health care facility or hospital. Confirm any exclusion with the Consumer Protection Division before you rely on it, and check with that office for the current text of the law and how it applies to your model.

The contract checklist

Every item below applies to each membership contract you sell.

• Written entire agreement. The contract must be a written agreement that is the entire agreement. Promises made at the front desk belong in the contract or nowhere.
• Fully completed before signing. Every blank is filled in, and the member receives a copy at signing.
• Term of 36 months or less. No term may exceed 36 months. Renewal at the end of each 36-month period is allowed only at the option of both parties, so review any auto-renewal language against that rule.
• Rules and policies on the face. Facility rules, the cancellation policy and the refund policy must appear on the face of the contract.
• Seven-business-day cancellation. The member may cancel by written notice within seven business days after signing. Payments are refunded, but the member owes the fair market value of services actually received, never more than $100.
• Service change right. If you stop offering a substantial service, or change from coed to single-sex or the reverse, the member has 30 days to cancel and receive a pro rata refund. The contract must say so in at least ten-point boldface.
• Disability cancellation. The member may cancel for total and permanent disability (a condition lasting more than 45 days), subject to a reasonable predetermined fee.
• One payment structure. Choose one of the two structures below.
• Separately signed warning. A separate statement, signed by the member, in at least 14-point bold type, larger and bolder than anything else in the contract. It must warn that paying in advance risks losing the money if the spa closes, and it must state that Health spas do not post a bond.

Pick one payment structure

• Closure clause: The contract states that no further payments are due to anyone, including a buyer of any note, if the spa closes and does not offer a substantially similar alternate location within ten miles.
• Equal installments: All payments are equal monthly installments over the whole term, with no down payment, enrollment fee or membership fee.

The Act does not require a surety bond. It requires the warning to say that health spas do not post one. Never describe a bond as a requirement in your contract or marketing.

Attorney General filing and pre-opening sales

Since November 15, 1989, a health spa contract is not valid or enforceable unless the operator has on file a statement signed by the Attorney General certifying that a copy of the contract is on file and complies with the law. Every change to the contract must be submitted for approval before the new form is used. File before you sell any membership, treat every wording change as a new filing, and keep a dated log of which version each member signed.

Pre-opening sales are where new studios most often go wrong. A spa may not enter or offer to enter a membership contract until it is fully operational, meaning all promised facilities, equipment and services are available. The exception requires the Attorney General's prior written approval and a deposit of pre-opening membership money in a Georgia bank account the Attorney General approves. That account releases funds only on the Attorney General's certification, and the member then has seven business days after opening to cancel.

A studio that sells classes one at a time, drop-in or pay-as-you-go, may not be selling contracts at all. Prepaid class packs and auto-renewing memberships are a separate question, so ask the Attorney General's office how it treats them before you launch those products.

What you need before you start

• A written service model: memberships, class packs, drop-in classes, personal training, or a mix
• A draft membership contract and a separate waiver
• Your entity name, checked against the Secretary of State business search
• A Georgia street address for a registered office and a registered agent (no P.O. box or mail drop)
• A lease or site, with confirmation that the address allows a fitness use
• Insurance quotes, including workers' compensation if you will have three or more workers
• Vendor quotes for equipment and build-out (this guide does not publish equipment or startup totals)

Step-by-step: opening your studio

1. Classify your business under the Act. Ask whether exercise, weight control or physical condition is a primary purpose of what you sell. Most gyms, yoga studios and pilates studios that sell memberships meet that test. Settle your pricing model now, because it determines which contract structure and filings apply. If you plan to claim an exclusion, get the Attorney General's answer in writing first.
2. Form the entity. An LLC files Articles of Organization and a corporation files Articles of Incorporation. Each costs $110 total: the $100 filing fee plus a $10 service charge. File online through eCorp or on paper. Online filings take about 7 to 10 business days, and paper filings about 15 business days. Expedited review costs $120 for 2 business days, $275 for same day if received by noon, or $1,200 for one hour on business days. A name can be reserved for 30 days for $35. An LLC name must include a limited liability company designator such as LLC and be distinguishable on the Secretary of State's records. Every entity needs a registered agent at a Georgia street address.
3. Register a trade name if you will operate under another name. Trade names (DBAs) are filed with the Clerk of Superior Court of the county where the business is chiefly carried on, not with the Secretary of State. Expect a clerk fee of about $165 plus newspaper publication once a week for two weeks. Confirm the amount with your county clerk and review the Secretary of State FAQ.
4. Get an EIN. Apply with the IRS for an employer identification number. You will need one for the entity's bank account, for payroll and for most tax filings.
5. Get the local occupation tax certificate. Georgia issues no statewide business license, and sales tax registration is not one. The local license is an occupation tax certificate, often called a business license. The city issues it if your studio is inside city limits, and the county issues it if you are outside any city. Under O.C.G.A. Title 48, chapter 13, each of Georgia's 159 counties and about 537 cities sets its own formula, deadlines and prerequisites, so do not assume a neighboring jurisdiction's rules apply. More than half of Georgians live outside any city, so for many studios the county is the issuer. If you have more than 10 employees, you must file an E-Verify affidavit to get the certificate (O.C.G.A. 36-60-6). Check zoning for a fitness use with the same jurisdiction.
6. Register with the Department of Revenue. Register through the Georgia Tax Center, which charges no fee for sales tax registration. Register if you sell taxable goods, such as supplements or apparel, or if you have employees. The state sales tax rate is 4%, and combined state and local rates run from 6% to 9% by county and city (Atlanta is 8.9%). Georgia issues no separate resale permit. For items you buy to resell, use Form ST-5, the certificate of exemption. Confirm with the Department of Revenue whether membership dues and class fees are taxable. Georgia's income tax is a single flat rate that changes by year, so confirm the current rate with your CPA. A typical single-member or partnership LLC owes no franchise tax. Corporations, and LLCs taxed as corporations, owe a net worth tax of $0 to $5,000 depending on net worth. If you sell retail goods online, remote seller collection applies at $100,000 of Georgia sales or 200 separate transactions.
7. Insure the business and set up waivers. Workers' compensation is required at three or more workers, and part-time workers count. Georgia has no state paid sick leave or family leave mandate, but workers' compensation is not optional at that headcount. General liability insurance is the standard policy for a studio because injuries happen on the floor. Ask your insurer whether it covers independent instructors and whether it requires specific waiver language. A waiver is a separate document. Have a Georgia attorney review it, and have members sign it with the contract, not after.
8. Draft the contract and file it. Build the agreement from the checklist above, add the separately signed warning and choose one payment structure. Submit it to the Attorney General for certification before you sign any member.
9. Open only when fully operational. Set your opening date as a written checkpoint. Do not sell founding memberships until every promised facility, piece of equipment and service is available.
10. Calendar your annual registration. The Secretary of State's Annual Registration costs $60 ($50 plus a $10 service charge) and is due between January 1 and April 1 each year. An LLC files its first registration in the year after it forms. A new corporation files within 90 days of incorporating. A late filing carries a penalty, so confirm the current window and penalty at sos.ga.gov/corporations-division. An entity that stays delinquent can be administratively dissolved, and reinstatement costs about $260.

What to expect and how to describe results

Market what your studio actually offers: structured classes, trainers on the floor, or a yoga practice led by an instructor. Use hedged language such as 'may help,' 'is designed to support,' or 'many members find.' Avoid promising weight loss, specific pounds or inches, or any outcome that depends on the member's effort alone. Claims about treating, curing or preventing disease should be avoided entirely.

Common mistakes to avoid

• Selling founding memberships during build-out, before the studio is fully operational
• Writing a term longer than 36 months, or allowing a renewal that is not the option of both parties
• Placing the cancellation or refund policy in a separate handout instead of on the face of the contract
• Printing the warning in type smaller than 14-point, or skipping the member's separate signature on it
• Telling members a bond is required, when the Act requires the contract to say that health spas do not post one
• Filing a trade name with the Secretary of State instead of the county Clerk of Superior Court
• Searching for a statewide business license that does not exist, and skipping the city or county occupation tax certificate
• Changing contract wording without a new Attorney General filing
• Assuming membership dues or class fees are taxable or exempt without confirming with the Department of Revenue

Tips

• Ask the Attorney General's office, in writing, how it treats class packs and auto-renewing memberships before you launch them.
• Have your contract reviewed before the first filing. Revisions need approval, so a weak first draft costs time and money.
• Get advice from the Georgia Small Business Development Center at the University of Georgia and review Georgia resources at the SBA Georgia district page.
• Track each member's signed contract version, cancellation window and refunds in one system. Disputes often turn on which version a member signed.

Next steps

Start with the Health Spa Act classification and the Attorney General filing, because those two steps decide whether your membership model works at all. Then form the entity, obtain the local certificate, register for taxes and insure the business before you take a single member. A qualified Georgia attorney should review your contract and waiver, and a CPA should confirm the tax treatment of dues, fees and income. This article is informational content, not legal or tax advice, and it does not replace that advice.