Fair Trade Commission Introduces Standard Terms for Yoga and Pilates to Prevent Losses from Sudden Closures

The Fair Trade Commission (FTC) has established standard terms and conditions for the yoga and Pilates industry to prevent cases where users are unable to receive refunds for long-term prepaid memberships due to the sudden closure of businesses.

The FTC announced on July 20 that it has enacted the "Standard Terms and Conditions for Yoga and Pilates," which specify criteria for calculating cancellation fees and refunds when terminating contracts.

Yoga and Pilates businesses are known for encouraging users to make long-term prepayments.

However, because terms and conditions vary by business, there have been frequent consumer complaints regarding unfavorable refund practices and damages caused by unannounced temporary or permanent closures.

In fact, the number of damage reports related to yoga and Pilates filed with the Korea Consumer Agency surged from 818 in 2021 to 1,919 in 2023.

Notably, a 2025 survey by the Korea Consumer Agency found that 9.9% of Pilates users and 11.5% of yoga users reported that they were unable to receive refunds for their membership fees due to business closures.

The average amount of unrefunded money was approximately 250,000 won.

In response, the FTC has included a provision in the standard terms requiring businesses to provide advance notice of temporary or permanent closures.

The FTC now requires businesses to notify members of a planned closure at least 14 days before the scheduled date.

Furthermore, if a yoga or Pilates business is covered by guarantee insurance, the business must inform consumers of the type of insurance and the scope of coverage in advance, allowing them to verify before signing a contract whether they can be compensated by the guarantor in the event of a business shutdown.

However, it is reported that it is still rare for businesses to have such guarantee insurance.

An official from the FTC stated, "We understand that the Ministry of Culture, Sports and Tourism is planning to introduce guarantee insurance products for gyms and similar facilities," adding, "Once introduced for gyms, related insurance products could be developed and utilized in the yoga and Pilates industry as well."

Refund criteria have also been clarified.

In the yoga and Pilates industry, it has been common for businesses to lure customers with discounts for long-term prepayments, only to calculate refunds based on the original price before the discount upon contract termination, resulting in significantly lower refund amounts.

To address this, the FTC has mandated that refunds upon contract termination must be calculated based on the actual amount paid, not the price before the discount.

Cancellation fees are set at 10% of the membership fee to prevent disputes over refund calculations.

Additionally, since yoga and Pilates services are largely divided into duration-based and session-based models, the FTC has required businesses to establish refund policies that align with their specific operational methods.

Businesses and consumers are now encouraged to agree on the service usage and refund methods when signing a contract.

To this end, the standard terms specify that application forms for session-based and duration-based products must be provided separately, and the refund methods applicable to each service model must be clearly stated.

This is to ensure that consumers are fully aware of how their refund will be calculated from the moment they sign the contract until they terminate it.

The FTC expects that the introduction of these standard terms will contribute to reducing disputes between businesses and consumers.

The commission also anticipates that it will reduce consumer losses by allowing users to verify a business's closure status and insurance coverage in advance.

The use of these standard terms is recommended starting today.

The FTC plans to post the standard terms on its website and actively engage in related training to ensure their widespread adoption.

An FTC official said, "While the use of these standard terms is not mandatory, we have consulted with the industry multiple times to ensure they are widely adopted," adding, "We have fully explained to the industry that these standard terms are not intended to disadvantage businesses, but rather to reduce disputes."

(Photo: Yonhap News TV, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.