BOTH gym members and gym owners may have a slight financial reprieve during this pandemic, thanks to a new DTI circular issued last November 20.
Acknowledging the unique circumstances brought on by the pandemic, as well as “several reports and requests for interventions”, the agency issued Memorandum Circular 20-59 to address the issues of payments — whether owed by a member to a gym, or owed by a gym franchisee to a franchisor.
First, for the members.
The circular’s section 5 makes it clear: There will be “no denial of access or use due to late payment or non-payment of membership fees.”
“Members shall be allowed continued use and enjoyment of their membership and shall not be denied access or use of gyms/fitness centers and sports facilities based only on late payment or non-payment of membership fees accrued during the closure of the gyms/fitness centers and sports facilities,” it said.
It’s the timing indicated in the last part that’s crucial in the implementation and interpretation of this document.
When enhanced community quarantine was imposed, gyms and fitness centers were classified as non-essential (Category IV) industries and were not allowed to operate during the lockdown. They were among the last businesses to reopen — with 30 percent capacity in areas under GCQ, and 50 percent capacity in areas under MGCQ.
Gyms were also “encouraged to waive membership fees, including any penalties or charges, if any, and/or extend the validity of membership in proportion to the period when the establishment was not allowed to operate during the COVID-19 pandemic.”
Franchisees may have similar relief when it comes to their obligations and royalty payments to their parent company.
“Franchisors of MSME gyms/fitness centers and sports facilities franchisees are encouraged to waive royalty fees, including any penalties and/or charges, during the period the establishments were not allowed to operate during the COVID-19 pandemic,” said the circular.