Texas Health Spa Bond
If your Texas gym, studio, or fitness club takes money from a member before delivering the service — a prepaid contract, a recurring debit, an initiation fee — the Secretary of State will not issue your health spa certificate of registration until you post security of $20,000 to $50,000 under Tex. Occ. Code §702.151. Bill strictly month-to-month with no prepayment beyond 31 days, and you may qualify to skip it entirely. This page walks the decision in the order a gym owner actually needs it: are you covered, what triggers the requirement, how big a bond, and how to get out of it.
- Who requires it: The Texas Secretary of State, under Occupations Code ch. 702, for a health spa registration (unless exempt).
- Amount: $20,000 to $50,000 in security, depending on the spa.
- Timing: Same-day submission; most quotes within one business day.
Are you a “health spa” under Chapter 702?
Chapter 702 does not bond “gyms” by name. It bonds a business that offers for sale, or sells, memberships providing the member instruction in — or the use of facilities for — a physical exercise program. That definition is wider than a traditional gym: membership-model yoga, Pilates, martial arts, and personal-training studios generally fall inside it too, right alongside weight-loss centers and tanning salons that sell memberships.
A short list is carved out regardless of billing model. If your business fits one of these, Chapter 702 does not reach you at all — no registration, no security, no exemption paperwork needed:
Don't see your business above? Assume Chapter 702 applies and move to the next gate — what you charge, not what you call yourself, decides whether security is actually required.
Does your billing model trigger the security requirement?
Official Texas Requirements
"Except as provided by [the exemption provisions], the secretary of state may not issue a health spa operator's certificate of registration to an applicant unless the applicant files a surety bond, or posts other security as prescribed by the secretary, in the amount prescribed by the secretary."Texas Occupations Code • Tex. Occ. Code §702.151(a)
Any one of these three, standing alone, is enough to put your location in scope:
1. Membership terms longer than 31 days
Sell a 6-month or annual contract and you have collected money for service you have not delivered yet — the core exposure the security exists to cover.
2. Recurring debits, promissory notes, or installment contracts
Auto-drafting a member's account or financing dues through a note or installment plan counts as taking money ahead of delivery, even if each charge looks small.
3. Initiation fees or non-monthly charges
A one-time enrollment or sign-up fee on top of dues is itself enough to bring a strictly month-to-month studio back into scope.
Read those against your actual membership agreement, not your marketing. A studio that calls itself “month-to-month” but auto-drafts a card on file and charges a $50 sign-up fee has already tripped the second and third triggers.
Two ways to skip the bond entirely
A certificate holder can apply for an exemption from the security requirement by filing a sworn application with the Secretary of State (Tex. Occ. Code §702.201). Under §702.202, there are exactly two ways to qualify — one built for how you bill, one built for how long you have operated:
No real prepaid exposure
Qualify by never doing any of the five things that create prepaid risk:
- • No membership terms longer than 31 days
- • No promissory notes or installment contracts
- • No recurring debits from a member's account
- • No initiation or non-monthly fees
- • No prepayment beyond 31 days
Available to any operator, brand-new or established — the test is your contract terms, not your history.
Established-operator sworn statement
File a sworn statement every three years showing all three:
- • Net assets over $50,000 per registered location
- • Substantially the same ownership/management for 5+ years
- • No member complaints on file with Texas authorities
Built for stable, multi-year operators — and unavailable by definition to a business in its first five years, no matter how conservative its billing is.
These are separate tracks, not a spectrum. A five-year-old studio with heavy prepaid contracts can still exempt out through pathway B even though it would fail pathway A outright. A brand-new studio with zero prepayment can exempt out through pathway A even though it has no operating history for pathway B. Pick the one your business actually fits.
Not exempt? Here is how the amount is set
The statute itself is a range, not a fixed number: §702.151(b) requires the Secretary of State to set an amount “sufficient… to protect the health spa's total membership,” and caps that figure between $20,000 and $50,000. In practice, the SOS applies that range through a published schedule keyed to your prepaid membership revenue per location — the more members' money you are holding, the higher your tier, in $5,000 steps from the $20,000 floor to the $50,000 ceiling.
Because premium is priced as a percentage of that bonded amount, the tier you land on directly moves your annual cost. At the $20,000 floor — where most new, lightly-prepaid studios sit — the spread looks like this by credit profile:
Texas health spa bond premium — $20,000 floor tier
Based on a $20,000 bond amount
- Excellent (720+)Rate: ~1%~$200/yr
- Good (680–719)Rate: ~1.5–2%~$300–$400/yr
- Fair (620–679)Rate: ~3–5%~$600–$1,000/yr
- Poor (below 620)Rate: up to ~7.5%up to ~$1,500/yr
Illustrative ranges at the $20,000 statutory floor. A location tiered up toward the $50,000 ceiling scales proportionally higher at the same credit profile. Request a quote for your exact tier and rate.
Every dollar tier maps to a proportionally larger bond, not a proportionally larger check you write — the full walk-through of that math lives on our Texas health spa bond calculator and the tier-by-tier table on our full Texas health spa bond filing guide, which also walks the SOS Form 3001/3002 paperwork sequence step by step.
Bond or CD — the statute gives you a choice
Surety bond — §702.152
Must be issued by a company authorized to do business in Texas, conform to the Insurance Code, and remain in effect until the surety company cancels it. You pay an annual premium instead of tying up capital — the default choice for most operators.
Other security (CD) — §702.153
An applicant who posts security other than a bond is not required to re-post annually if they maintain $20,000 in security, and is entitled to keep the interest that accrues on it — at the cost of locking up your own cash instead of paying a premium.
Not sure which of the two exemption pathways fits, or whether you need to bond at all?
Send us your billing model and we'll tell you before you file anything.
Get my Texas quoteWhat actually triggers a claim: the 10-mile rule
Closing your doors is not automatically a claim event. Under Tex. Occ. Code §702.251, a member may file a security claim — by submitting their contract and proof of payment to the Secretary of State — only if the health spa closes and fails to provide an alternative facility within 10 miles of the original location, or if it relocates more than 10 miles from where it operated before.
No claim exposure
You close one location but reopen, or arrange an alternate facility, within 10 miles. Members keep access; the security is not implicated.
Claim exposure
You close without a nearby alternative, or move the studio more than 10 miles away. Members holding prepaid time can file directly against the security.
For an owner weighing a relocation, that 10-mile line is worth planning around — a move within it carries no claim risk under §702.251, while a move past it does. It is also why the security obligation does not simply vanish the moment a lease ends; it stays live until the SOS is satisfied no §702.251 claim window remains open.
Not in Texas? The rule you're reading doesn't travel
Texas ties the amount to prepaid membership revenue in $5,000 steps and layers on a two-pathway exemption most states don't offer. Florida, by contrast, sets a flat $25,000 per location under F.S. §501.016 with a single reduction to $10,000 — no tiered schedule, different exemption logic entirely.
See the Florida health studio bond rulesFor every other state that requires this bond, and the four different ways states size the amount, start on the health club bonds hub.
Texas health spa bond questions, answered
Does a yoga studio or martial arts gym count as a "health spa" in Texas?
Usually yes, if it sells memberships. Chapter 702 defines a health spa as a business that offers or sells memberships providing instruction in, or use of facilities for, a physical exercise program — that language covers yoga, Pilates, martial arts, and personal-training studios selling membership packages, not just traditional gyms. Chapter 702 excludes a short list of operations regardless of billing: 501(c) tax-exempt nonprofits, private clubs owned and run by their own members, government-owned hospitals or clinics, entities operated exclusively for dance or aerobics instruction, physical rehabilitation providers, and businesses already operating under another state license that covers the activity. If you don't fit one of those categories and you sell memberships, assume the Act reaches you until an exemption says otherwise.
What exactly disqualifies a gym from the no-prepay exemption?
More than you would expect. Under Tex. Occ. Code §702.202, the exemption for "no real prepaid exposure" requires that you not use membership contracts longer than 31 days, not use promissory notes or retail installment contracts, not authorize recurring debits from a member's account, not charge initiation or non-monthly fees, and not collect prepayment beyond 31 days. Any one of those five breaks the exemption — a studio that is otherwise pure month-to-month but charges a single $75 enrollment fee no longer qualifies under this pathway and needs to post security like everyone else.
If I already have $30,000 in prepaid liability, can I still apply for the established-operator exemption?
Possibly, because that exemption pathway does not look at your prepaid liability at all. Under §702.202's second pathway, an operator qualifies by filing a sworn statement every three years showing net assets exceeding $50,000 per registered location, substantially the same ownership and management for at least five years, and no member complaints filed with Texas authorities about closures or failures to open. A five-year-old studio carrying $30,000 in prepaid liability can use this pathway; a first-year studio cannot, no matter how conservative its billing is — it hasn't existed long enough to qualify.
Does my Texas health spa bond still protect members if I just relocate instead of closing?
It depends on distance. Under §702.251, a member can file a security claim if the health spa closes and doesn't provide an alternative facility within 10 miles, or if it relocates more than 10 miles from its prior address. Move your studio six blocks and reopen down the street inside that 10-mile radius, and members generally have no claim — you kept faith with the membership. Move across town past the 10-mile line, or close without lining up a nearby alternative, and the security is exactly what members are entitled to claim against.
Can I post a certificate of deposit instead of a surety bond, and does that change my exemption options?
Yes to the CD, no to the exemption question — they're separate decisions. Under §702.153, an applicant can post security other than a surety bond (a CD assigned to the Secretary of State); doing so at the $20,000 level means you are not required to re-post annually, and you keep the interest that accrues. But choosing a CD over a bond only changes which instrument satisfies the requirement — it doesn't touch whether you're exempt from posting security at all. That's a separate application under §702.201, evaluated on your billing model or your operating history, independent of which instrument you'd use if you end up needing one.
My Texas gym franchise operates in Florida too — does the same bond cover both states?
No. Each state's health-spa or health-studio security is filed with that state's own agency and sized by that state's own rule, so a Texas SOS bond does nothing for a Florida location and vice versa. Florida runs a flat $25,000-per-location FDACS bond under F.S. §501.016; Texas runs a $20,000-$50,000 tiered SOS security under Occupations Code §702.151 that scales with prepaid liability, plus an exemption path Florida structures differently. Multi-state operators need a separate filing, sized under each state's own logic, for every location.
Where Texas gym operators go next
All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.
General information, not legal or compliance advice. Texas health spa requirements are set by Occupations Code Chapter 702 and administered by the Secretary of State, and bond amounts, exemption eligibility, and claim procedures can turn on the specific facts of your business and change over time. Verify current requirements directly with the Secretary of State and the statute, and confirm which exemption pathway (if any) fits your operation before relying on any figure here. Request a quote for current pricing.
Selling prepaid memberships in Texas?
Tell us your billing model and we'll confirm whether you owe $20,000-$50,000 in SOS security or qualify to skip it — before you file a single form.
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