The issue of no-fixed term contract for members was highlighted as one of the biggest industry trends in 2010 by 46.9 per cent of club owners and managers (AFIS) . And members agreed, with 47.4 per cent of members with expired memberships indicating that they would be motivated to renew their membership if they were given the option of a no-fixed term contract (AFIS) .

So, owners and managers of fitness facilities have identified this trend and members (well, ex-members) are saying that they would like it too, so should clubs offer it? Perhaps the more appropriate question is, can clubs afford to offer it?

Fit n Fast is opening its doors for business in Australia in June 2010. ‘We have decided to go down the route of no contracts for our members,’ says Tony De Leede, director at Fit n Fast; ‘Through a combination of easy payment facilities and no contracts we are finding that people are more inclined to take up membership.’ So no-fixed term contracts there.

Other industry leaders in the commercial fitness space like Virgin Active have taken the same path. Then there are management companies like the YMCA Sydney whose business model is about having no-fixed term contracts at sites like the Ian Thorpe Aquatic Centre .

All three of these businesses have taken a very specific position in the fitness market. They have really carved out their unique selling proposition through a combination of product offering and branding. They are not afraid to take a niche position and stick to it.

The other key point of difference that these clubs have is a very strong management team. The individuals in these teams have implemented clear strategic direction and processes to support the collection of membership fees through direct debit . So with a combination of a strong targeted marketing strategy, and solid internal structures and processes these organisations can afford to have no-fixed membership contracts.

For other fitness clubs – if you don’t have these two key elements in your business right – then I really don’t think that your business could withstand the churn of not offering fixed term contracts. You would need to ramp up your sales, create sales and membership sign-up processes that have a very low cost per sale and be able to afford the admin staff to process all the new members and cancellations.

So, although it is a trend in the fitness industry and members are calling for the option – many fitness facilities in Australia could find that it will not be a sustainable position for them to take. What do you think? Can you see your club successfully embracing a no-fixed term contract policy – or is the certainty provided by contract revenue critical to the survival of your business?