(a) It is an offense to accept a down payment for a health club agreement in excess of thirty percent (30%) of the total cost of the agreement unless, as of January 1 of the year in which the health club agreement was entered into:
(1) The health club has a net worth in excess of two hundred fifty thousand dollars ($250,000) per location where health club services or facilities are provided; and
(2) The health club has operated under substantially the same ownership and control for at least five (5) years.
(b) For the purpose of calculating net worth as provided in subsection (a), the following are excluded:
(1) Assets that represent prepayment for future services; and
(2) Accounts receivable due from health club members for future services.
(c) Any health club claiming the exemption pursuant to subsection (a) shall maintain written documentation establishing proof that the requirements of subsection (a) have been met as of January 1 of each year the exemption is claimed. Such proof shall be retained for a minimum of five (5) years from the end of the year in which the exemption is claimed. This documentation shall be made available for examination upon request of any law enforcement agency or the attorney general. A refusal to provide such documentation shall constitute a violation of this part.
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