What Fitness Business Owners Should Know About Non-Compete and Non-Solicitation Agreements

The use of non-compete and non-solicitation agreements are becoming a staple in just about every business.  The fitness industry is no exception.  In fact more and more small fitness businesses are using non-compete agreements when hiring trainers regardless if the trainer is an independent contractor or an employee. 

Now I am by no means a legal expert and would strongly recommend speaking to a lawyer if you have specific questions regarding a non-compete and/or non-solicitation agreement.  So, don’t substitute what I am about to say as legal advice.

Although the two terms non-compete and non-solicitation are often used together they have two distinct meanings.  A non-compete agreement is a contract between employer and employee/IC whereby the employee agrees not to enter into competition with the employer after employment has ended.  The non-complete typically takes effect after employment has ended and will last for a pre-determined time set forth by the employer. The non-solicitation agreement restricts the employee from soliciting (a) employees or (b) customers of the business after departure.

The intent of using the non-complete and non-solicitation is to provide reasonable protection for the business.  When a fitness business owner hires a trainer there is an assumed risk that the business owner takes.  The primary risk is the effort and resources the business has provided the trainer to develop a client base.  If the trainer was to just up a leave and take the clients with them: this could lead to a devastating impact to the business because of the loss of income.  The use of agreements is permitted by the courts in an effort to protect the intellectual rights and any proprietary information the company has provided the trainer.

The use of non-compete and non-solicitation agreements vary by state.  In fact in California the use of non-compete agreements are deemed unenforceable.  However, most courts favor non-solicitation agreements.  Check with your local state laws for additional information.

Also important to note is that the terms of the agreements must be deemed reasonable.  Unfortunately, reasonable is a very loose term and if you end up in court it will be up to the judge to determine what is or isn’t reasonable.  Here is what you need to keep in mind.  The purpose of the agreement(s) is not to prevent the employee from working in their choosing career field and to limit their ability to earn a living.  So although the intent of the agreements are to provide reasonable protection for the business regarding their customers and confidential information, they also provide protection to the employee for his/or right to earn a living.

There is one last point I would like to make; the non-compete and non-solicitation agreements are generally in place for the position and time at which they were signed.  This means if you hire a trainer, and have them sign the agreement(s) and then later promote them to a management position the previous signed agreement(s) may no longer be in effect.  So, error on the side of caution and make sure to have trainers/staff sign a new set of agreements whenever there is a change is positions or status.

 

Hiring Bad Trainers

Hiring trainers is one of the quickest ways to bring monies into your business. In fact not many business owners realize that hiring trainers is a revenue stream. In fact it is often looked at as one of the business headaches. Here are some quick pointers to identify if you are in fact ‘Hiring Bad Trainers’. Do your trainers:

 

• Consistently making excuses for low or no sales?
• Procrastinate on performing sales or marketing-related activities?
• Ignoring directions and only doing what they feel comfortable doing?
• Measuring success not by the number of sales closed, but by how much time or effort is put into something?
• Creating conflict with others in order to deflect attention from their own non-existent or low production/performance?
• Sabotaging co-workers or stealing prospects and sales leads?

Do your trainers work the training room floor, speak with prospects and go the extra distance. Are the:

 

• Trainers sitting at their desk or on the internet?
• Studio floor is cluttered with weight or weights not be racked?
• Fitness equipment is dusty or not working properly?
• Engaging the members on a first name basis?

 

Mind you this is certainly a short check list. But the point here is that there if far more to being a successful trainer. As the owner or department head that hires trainers expectations need to be clearly stated. The end goal would be to have the trainers develop a clients list and earn a good living. This would make both the trainer and owner happy. But often time what gets lost is what the expected of the trainer that will lead them down the road to ultimate goal and that is obtaining clients.

Take a moment and evaluate your current trainers to see if they are meeting the minimum requirements list above. Tune in next time for some tips on how to set up the expectations for your training staff.

 

Finding the Right People

There comes a point in the life or our business that we find oursleves needing to hire staff. Typically, that is a good thing because it signals that our business is growing. However, finding, hiring and keeping qualified employees and/or independant contractors is no walk in the park as many business owners will tell you. It requires a lot of research and planning because of how crucial your employees and or I.C.'s will be to the success of your business.



Putting together a team that has the right skills provides your business with an opportunity to grow and to meet its challenges head on. It's not an exaggeration to say that the right people in the right jobs can provide your with a distinct competitive advantage. Which brings us back to the point we just made--hiring the right people takes time and effort.



To increase your chances of hiring the right people, consider following these steps:

1. Take a good hard look at your business structure and budget before you decide to hire someone. Ask yourself some objective questions such as" do you really need additional personnel for the long term? Are you experiencing an increase in work load that will only last for a short period of time or do you expect it to continue? Can you afford to hire additional staff? This includes not just the salary aspect, but also fringe benefits and federal, state and local taxes assoicate with hiring someone.


2. Develop a clear idea of what you want that person to do and the job qualifications they should have. From this, you will be able to create a concreate job description that can guide you through the interview process.


3. Create an advertising and recruiting strategy that will allow you to find the right person for the job. This means you need to determine which advertising avenues will yield the best candidates. For example, if you are perateing on a limited budget are you more likely to find qualifiied candidates for the position of a certified personal trainer in your local newspaper classifieds or through the web?


4. Confirm that you have selected the right person for the job. Often overlooked but extremely important is the need to perform those all important reference and education checks.


5. Ensure that all parties understand the terms of employment. Draft a letter of employment that outlines any terms and conditions of employment to avoid any misunderstandings that may occur down the line.


6. Finally, orientate your new employee and provide ongoing training and support. Again, this is another often overlooked area. Do not stop with a simple walk around your facility or an introduction to other employees. Providing ongoing educational opportunities is not just an investment in your employee, but an investment in your business.

While it may sound corny, it holds true...our employees/I.C.'s are our greatest assets. Treating them with respect and providing guidance and assistance so that they can grow both professionally and personally contributes to our own business success. And, that's something we can all appreciate.

Hiring Trainers

When it comes to growing your personal training business it is important to create additional revenue streams. Amoungst the traditional revenue streams that come to mind such as, product/equipment sales, supplements, etc. Although somehow most trainers who own their own business fail to recognize that hiring trainers is in itself a means of adding additional income to their business. For those who have hired trainers I have no doubt that you have your share of stories to share both good and bad. Today I would like to share some tidbits for trainers seeking either their first job in the industry or looking to move on to a different facility. Here are top 3 things you need to have:

1. A plan. During my own personal experiencing conducting interviews I should have termed this "get a clue". But to get back on point I strongly encourage you to have a plan in mind about how you are going to pick up a client base and what you have to offer to a future employer. It doesn't matter if you are a independent contractor or an employee if you come to the table with a plan that is marketable you will truly stand out.
2. Know the Company. Spend some time prior to your interview or for that even before you apply and learn about the company. Know if the company is going to be a good fit for you. Does the company provide the opportunities your are seeking? Ask questions during the interview and recruiting process that generally show interest in the company.
3. Qualifications. Please be sure all qualifications are current. This would include: certifications, CPR, & liability insurance.

Make no doubt this is not a complete list, but if you are looking to get a leg up during the interviewing process make sure you have to above items covered and you will be at the top of the pack for landing your firs or next personal training position.