Are you thinking about opening and operating a CrossFit Gym? Do you already operate a CrossFit® box and you’re trying to make sure that you have crossed your t’s and dotted your i’s so that you and your business are limiting the risks of liability as much as you can?
CrossFit® has become one of the most successful fitness brands in the world. It is worth over $4 Billion dollars. CrossFit does not operate as a franchise or as a centrally operated chain, rather it has an affiliate model whereby licensees – the Box owners – contract with CrossFit to use their name, logo, and training methodologies.
Let’s talk about some of the liability risks involved in operating a CrossFit box:
Failing to Comply with the CrossFit® affiliate agreement
To have the legal right to use the CrossFit® name, logo, and teaching methodology, you will need to enter into an affiliate agreement with CrossFit and stay in compliance with any restrictions placed on your use of their intellectual property. Failure to comply with this agreement could leave your business at risk of termination of that agreement and mean that you will be required to rebrand or cease operations.
Choosing a Business Entity that doesn’t offer appropriate legal protections
Not all types of business entities are created equal. Structuring your business as a limited liability company (LLC) or a C-Corp ensures your personal assets are protected in the event your business is sued, whereas a sole proprietorship or partnership may not shield business owners from legal action that targets their personal assets in addition to their business assets. Speak to an attorney about your specific circumstances.
Trainers: Independent Contractors v. Employees
Deciding whether to grow your team of trainers with individuals classified as either Independent Contractors or Employees, there are implications for that choice. Be sure you understand the difference, your responsibilities in either case, and the risks of treating Independent Contractors as employees.
Injury to client while under your supervision
One major liability risk of a Crossfit® box is illness or injury caused to clients while under the supervision of trainer or as a result of your advice. If you are found liable for the illness or injury of a client, you could be held responsible to pay damages for the injury, lost earnings, and damage to personal property among other compensation.
To mitigate – mitigate means to limit or reduce the impact – your risk, consider ensuring your screening process and intake documentation are sound, that your clients sign an informed consent, release and assumption of the risk, and have a practice of educating your clients in how to avoid injury. For Crossfit box owners, you should be especially aware of is rhabdomyolysis.
Damage to the personal property of others
Breaking or damaging equipment or damaging the fabric of the building or the land where you are coaching can leave you liable for those damages. This is where general liability insurance can be helpful. Insurance may compensate others in the case that you cause damages, however you will also want to limit your liability as a result of the behavior of your clients by ensuring that there is a disclaimer in your user (or training agreement) contract that they are responsible for the payment of any compensation related to damages they cause.
What else do you need to know about physical locations? Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met. If you plan to lease a location: It is generally the landlord’s responsibility to obtain a CO. Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a Crossfit gym business. After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, consider asking your attorney to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued. If you plan to purchase or build a location: You will be responsible for obtaining a valid CO from a local government authority. Review all building codes and zoning requirements for your business’ location to ensure your CrossFit gym business will be in compliance and able to obtain a CO.
Certifications, Scope of Practice and CrossFit trainers giving Advice
One of the significant areas where all fitness professionals risk liability is scope of practice. As a result of the affiliate agreement, you can’t teach at a Crossfit® affiliate without being a certified, and as the owner of your box, you are more than likely also the head trainer. Scope of practice is the term that is used to describe the limits of what you can do as a fitness trainer.
If you aren’t a doctor, be careful giving medical advice or advising in relation to medication or medical testing. Read more about the legal issues with offering medical advice as a fitness professional.
It isn’t just medical advice you need to be wary about: Nutrition and Dietetics are regulated fields. CrossFit participants have been known to discuss and promote specific styles of eating and nutrition, including Paleo. So, too supplements are often discussed and even sold at CrossFit boxes. Be aware that trainers giving nutrition advice without certification can create a risk of liability – consider disclaimers and waivers in relation to nutrition. In addition, if you aren’t a registered dietitian, be careful recommending, supplying or prescribing nutritional supplements. Read more about the legal issues with offering advice about supplementation or nutritional advice.
So you might be stoked about the incredible results members of your box are getting, but be careful letting that enthusiasm be interpreted in a way that might leave you liable if a client doesn’t achieve similar results. Consider adding a disclaimer that client results are extraordinary, the result of multiple factors, and not guaranteed.
Using Photographs of Box Members
It seems innocent enough – you take photos of box members during sessions, or before and after images, and you decide to use these in advertising materials. You took the photos so you own the copyright, right? Well, right… but that’s not the whole story. In addition to copyright, there is also another set of legal rights that allow for the identifiable subjects of images to protect their likeness and publicity rights. Using the image of an identifiable person to advertise or promote your CrossFit ® box in a way that implies they endorse your services cannot be done legally unless you have obtained an appropriate release from the individual. It is important that you also note that the risk of liability increases where you are using a Before image that is not flattering to the client.
Intellectual Property: Copyright and use of Images
One of the key ways the CrossFit organization encourages affiliates to grow their box membership is through a website. Many CrossFit boxes also utilize social media extensively to recruit new members. In developing these platforms, many affiliates expose themselves to liability because of a lack of understanding of copyright. When choosing images to use on any of your platforms – whether social media or website – you need to own the copyright over the images (or you have a written explicit license enabling you to utilize the images on your website for testimonial purposes). Physically take all photos yourself or ensure that you have copyright over the images through a licensing agreement – if you engage a photographer to take images for you, be aware that you will likely need to pay an additional licensing fee to use the images in a commercial manner, and that just because you have received copies of images does not entitle you to use the images in any manner you choose. As mentioned above even if you took the images, you still need permission to share images that infer an endorsement of a service, product, or business – it is important to have such granting of permission in writing. An attorney can help you develop such an agreement for your business.
These are just nine liability risks that CrossFit box owners need to be aware of and seek to find ways to mitigate. This is not an exhaustive list and each of these liability risks has many additional factors that may change how to consider them based on your specific circumstances. For advice on your situation, you should consult your attorney.