Episode #610: Navigating Legal Challenges in Fitness-Cory Sterling on Waivers, Compliance, and Scaling Safely

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This is Pete Moore on Halo Talks NYC. I have the pleasure of

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bringing a very qualified legal professional, also

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quite frankly a great entrepreneur, uh,

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Corey Sterling, coming in from Conscious Counsel. Good to have you on the

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Halo Talks and, uh, introducing you to our audience. Pete, thank you

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so much for having me. I'm so happy to be here on Halo Talks and

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excited for a great conversation. Awesome. So, why don't we first

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talk about your background, your career,

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and how you've pivoted into a very interesting niche that

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we believe is a full-time job serving the health, fitness, and active

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lifestyle industries? Happy to start there. I used to

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work in professional sports. I did marketing for the NFL

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and the Oakland Raiders in a different lifetime, and I did a

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lot of informational interviews when I was there, including with Roger Goodell, the commissioner of

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the NFL. And, I was quite young. I was

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23, 24, and I said, what advice would you give to your

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younger self? And, all the executives I spoke to or met with said, I would

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get an MBA or I would go to law school. So, I went to law

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school later in life, became a lawyer, worked

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downtown in a suit and tie, was absolutely miserable as you can

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imagine. Not me. I'm all about people. I'm all about movement. I'm all about

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health. At the same time I was working at that law firm, I was teaching

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yoga classes and cycling classes and group fitness classes at

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Equinox and other gyms in Vancouver, British Columbia, Canada.

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And, one day I went to a yoga class, one of the students in class

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got injured. We didn't sign a waiver. I asked the teacher who was my

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friend. I was like, hey, what happened? Where's the waiver of

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liability? And, they just didn't understand what it was about. And

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then, I started having more conversations with other friends of mine who were

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health and wellness professionals, gym owners, studio owners. And I

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realized no one really knew anything. This was in 2016. And

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so I was just like, cool. I was ready to quit being a lawyer because

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I was so unfulfilled working in the corporate space. And I thought,

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before I quit, I might as well just try to serve a community that I'm

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a part of and a community that I'm passionate about. And I started Conscious Council

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and just began serving, started very, very low scale

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working with yoga studios, gym owners. And since then,

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it's It's grown a lot, a lot, a lot. And 9 years later, here we

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are. Yeah. So when you started doing this, were you trying to get

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on as their power of attorney,

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their lead lawyer, or did you just say, hey, look, let me just

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come in here and basically make sure that all your documentation is in

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order? Yeah, it started really from help and pro bono,

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right? I had a full-time job. I was wearing a suit and tie. And so

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These people are my friends, and I saw them doing things incorrectly. And

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so I just thought, like, yo, let me look at what you're doing, and

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let's set you up to do it correctly. And I probably had 3 or 4

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of those sorts of experiences where I just helped people, and then I realized

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suddenly, actually, there's a need. Yeah. This is

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the truth. Now, in 2026, maybe it's a very little bit

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different, but in 2016, no lawyers were paying

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attention to Boutique fitness studios, 2 Pilates

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studios, 2 gyms, 2 yoga studios.

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And so, for me, it just was a natural niche. And then, yeah,

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I've spent the past decade essentially just

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fixing the same problems that a studio will go through that a health

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and wellness outdoor business will go through. And, that's really been

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my passion. And, how's word been getting

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out or how have you kind of morphed the business into

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more scalable— I know you could download some

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templates and things, right? It's really the— and

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for all entrepreneurs who are listening, I think it depends what your intentions are. Some

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people build businesses to scale and sell. That was never for me.

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I always wanted to have a business that was my unique offering to the world

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that I thought the space needed to apply my particular technical

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skills to help people in a way that's in alignment with the vision I have

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for the person who I am and the community that I want to build. And

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word of mouth is just like, if you're in that game, word of mouth is

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everything. Right now we've got 466

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5-star Google reviews. All of our clients give us 5-star reviews, and

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a lot of our business comes from referrals from existing clients.

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We've won some awards in the past, which helps, and usually just doing

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partnerships or joint ventures. A lot of the time I'll get on a call and

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the first thing a client will say is like, Wow, I'm so happy that you

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exist. I had no idea about this. So, like, for most businesses out there,

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the question is, how can you create awareness and attention so that people can

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understand the gift that you have and the ability to

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work with and use your services? Does that answer your question? Yeah, it does.

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Are you focused on the front end when

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people are starting their businesses, or are you

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typically coming in when something happened? Well, there's

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proactive law and there's reactive law. And that was one of the first

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concepts that I understood when I started doing this. Proactive law

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is I'm about to open. I know I'm going to hire. I'm not sure

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if they're employees or contractors. I'm not sure if my waiver of liability will cover

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supplements, all those sorts of questions. I don't know how to come up with

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a membership guide or behavioral expectations for my members.

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Proactive. You draft the documents first, you invest in legal

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upfront, and then when there's an issue down the line, it can be resolved with

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one email. Right. Conversely, reactive law is, hey, I'm going to cut

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corners. I'm starting this thing. I don't really want to invest in legal right now

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or to do things properly. 8 months down the line, you have a

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contractor who you— you have an employee who you were calling a

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contractor who now is threatening to call the

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IRS against you. I went through this last week. Not fun.

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For all of my clients, I always want them to be in control of the

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situation. And the way that you control the situation is by having

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industry-specific documents drafted by a

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lawyer who understands your business and the specific relationship you

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want to have with your clients. So proactive law has to be the way.

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This is Pete Moore. I want to let you in on a little secret. There's

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this company called Promotion Vault, and what they do is they give out rewards

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from retailers that allow you to incentivize your

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members without having to do zero down and one month free,

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or giving away shakes or giving away t-shirts. What you want to do is

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build a rewards program that lasts, that people value,

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and that doesn't discount your own products and services. So here's the deal.

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There's something called Rewards Vault. The Rewards Vault is going to allow

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a member to set up their own profile. They are going to answer

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questions. You are gonna get those answers. You're gonna be able to target those

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members and you're gonna reward them inside your club,

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inside your spa, and outside of the club and outside of the spa

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to get them to become loyal, to get them to pay their monthly dues,

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and to be rewarded properly for the actions. A lot of companies

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are cutting back on rewards. You shouldn't be. Promotion Vault's your answer.

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Trust me, this is real.

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When you get on board with an entrepreneur, and I've been an

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entrepreneur many times, they are very hesitant to invest

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in things that they don't think are, you know, core to like launching the

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product or the service. And, you know, probably

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even now worse with, you know, ChatGPT and Claude, thinking you just ask a question,

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you know, you get your answer and you're covered. My point of that was, are

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you seeing smarter entrepreneurs that are being

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proactive now? And is your service so

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scalable to an extent that, you know, it's not like you don't need

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100 hours of your legal services to get

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somebody up and running? Okay, 2 questions there, and I'll break them

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down individually. Am I seeing smarter consumers? Are people— are

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entrepreneurs getting smarter? Entrepreneurs are becoming more dependent

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on technology, and the limitation with that is like,

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ChatGPT is helpful to some extent, but the thing is that

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ChatGPT doesn't have the history or the experience of having done

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this very, very specific thing over and over again to understand what sort

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of problems will come up and to produce a document that,

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A, you understand, that has the things that you need, and B,

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proactively goes against the issues that a law practice that's been doing this

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for 10 years has in place. The other big pivot on the first front.

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So I'd say that entrepreneurs now will be more— the questions I get are different.

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because I can tell clients are using ChatGPT. But also, for me, it's

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helpful because sometimes my clients have issues,

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and the contract in question is drafted by ChatGPT. And then it's very

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easy for me to challenge it and overcome it. Your legal position is connected to

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the strength of your legal documents, always. Right. That's how your business runs.

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If you have contracts that are specific, drafted for you, the industry that

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you're in, you're in great shape. If you don't understand your contracts, or you're

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just letting ChatGPT draft it, there are going to be holes. And when those holes

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get exposed, it's the same as not having something. In terms of

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the scalability of the business, I've always had a philosophy

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of doing like, I want to do one thing best in the

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world. You know, Good to Great by Jim Collins. Sure. You know, the

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hedgehog principle? The hedgehog principle

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is like, choose something that you can be the best in the world at. And

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so, what for as a legal, as a the legal practice that I've grown,

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we basically draft 5 types of agreements and we help clients with

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trademarks and licensing, and that's it. And there's a lot of work

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that I refuse because it's outside of my zone. And so, it's scalable in the

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sense that now it takes me

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10% of the time that it used to take me a lot longer.

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So, onto the agreements and obviously state

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waivers, you know, there's, there's liabilities,

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there's, you know, precedent transactions that people are, you know,

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lawsuits or settlements that people are trying to, um,

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you know, ensure that they are, they're covered on. Um, so

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are there any, you know, are there like 2 or 3 things that,

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that have happened, you know, like in the last 3 or 4 years,

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let's say post-COVID, where you're like, well, this is kind of like part of the

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waiver now that maybe wasn't, or here's like a new thing that we've

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Inserted in for clients because we've gotten some issues

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related to something that was missed? Yeah, it's a great

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question. And one thing that we've seen has been with health clubs

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and health services and gyms that now sort of offer

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alternative— they're definitely not medicines, but pseudo-medicinal

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practices of coming up with protocols that

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include hormones or different types of things or injections or

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blood works or Ozempic or all of those different things that are taking

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place. We've had an issue where sometimes that can be construed as

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pseudo-medical services, which invite a whole

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plethora of legal liability outside the scope of what a normal

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gym would have, as well as— and so the changes that

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have need to be taken place for that are in the

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waiver and in the service agreement, and also working with businesses

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specifically to structure in a certain way so that they're shielded from

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liability in those situations. And, the other

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thing that I'd say that I've seen is just

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increasing the scope of all the different activities that

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gyms will do, not only just with supplements

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and the pseudo-medical services but a lot of stuff around breathwork,

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around contrast therapy, around saunas.

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That's something where a lot of the times a studio owner will offer

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new services but keep their documents the same. That's it, I guess. And so,

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it's really important. And then, the last piece

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I'll just add, last year was the click-to-cancel laws, which really,

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really threw a big wrench in the system because it

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changed how autopay works. It changed how people can cancel

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annual subscriptions and working with my clients to make sure that

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if someone cancels something early, you still get paid the amount that you would've

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got paid if you agreed to that particular timeframe

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at the start. So, a lot of changes, really interesting.

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And yeah, it's dynamic and it's flowing.

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Have you dealt with anything related to gift

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card expirations and/or

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prepaid sessions that have been, you know, that people try to burn

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off, let's say, and not fulfill? Not that they wouldn't honor it in the right

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situation, but— Nothing specifically

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around gift cards. I did have a client who

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sold certain sessions They followed up with the person who

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bought from their studio, and the person just delayed, delayed, delayed,

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delayed, never responded. And then that person issued

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a chargeback for the amount. And it was quite a number of

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sessions. But look, this is why you need the agreements. In that situation,

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we drafted the membership agreement for that particular

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type of service. We said that there was an expiry, that every 90

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days, any unused sessions will expire and you'll have to buy again.

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And so we submitted the claim and we won. So it's— that's why you just

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want agreements to reflect the relationships you want to have. Got it. So

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Corey, what have you seen on the click-to-cancel and how

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vigorously is that being enforced? Or

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what's the compliance like on this so far from your viewpoint?

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So click-to-cancel is federal, so it's going to apply to all

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businesses. And where I've seen the majority of click-to-cancel issues come

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up has been someone disputing contract or a membership agreement.

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So they're supposed to pay a certain amount, they sign up annually, so they're paying

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$200 a month when they should be paying $400 per

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month. And then after 3 months, they just decide, oh, actually, I don't want to

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pay this anymore. So now I'm out and I cancel.

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And when that situation comes up, you need to demonstrate that your legal

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documents reflect all of the click-to-cancel rules that you followed. It's

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just about compliance. You did A, B, C, D, The agreements are

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correct. The agreements have all the legal elements. If that person,

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you know, when you're challenging the chargeback, you're able to

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show in the contract that you followed everything. And also, I often send

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emails to people saying, hey, I understand that you terminated this agreement.

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Legally, you're not permitted to. This is the amount that you have to owe. If

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we have to pursue this, we reserve the right to counterclaim plus interest

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plus fees. So it's not— I haven't seen it so

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much enforced governmentally. like by a governmental entity or

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body that's going after people. But in day-to-day, anyone

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who has subscription services, you, you have to be on the right side of that.

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This is Pete Moore. Here's the last tip for you of the podcast.

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We are partnered up with a company called HigherDOSE,

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higherdose.com. They are the leader in

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other products such as PEMF mats and sauna

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blankets. If you have not gotten on the workout

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recovery train yet, your time and your stop

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is now. You gotta get these products in there before these workout recovery

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and spas end up saturating your market, having your

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members walk outta the club and going into one of their locations for

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$200. Per month where they're paying $39 to you.

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Let's become an expert in workout recovery if we are already an

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There's a wholesale code and we look forward to

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of your members. And hey, let's get people happy, healthy,

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and sweating, and the recovery should be just as good as the workout.

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A question for you about GLP-1s,

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longevity, IV drips, um,

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Botox, barometric chambers, those types of things. I think there's going to be

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a wave over the next 12 to 24 months of med

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spas going inside of a health club or

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studio, or potentially like a franchised

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situation where you run a yoga studio, you got an

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extra, you know, 500 square feet, you bring in a serotonin

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center that's inside. How do you view—

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could I, could I sign a sublease and like say, hey, this is a,

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you know, a separate entity, um, and they, they handle the

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liabilities? Or do you have to get, you know, additionally insured? How do you

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view that? It's, it's complex, but it's You

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can navigate it. It's navigatable.

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Everything's going to come down to the paperwork, how things are

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structured and organized, what written agreements are done between

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the parties, and what an actual party is legally allowed to do, and if they're

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allowed to provide those services. Because what I learned about lawsuits

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very early in my career as a lawyer was something that's called

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a fishing expedition, which means someone goes for treatment somewhere,

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even if it's in a yoga studio, let's say there's an IV drip and they

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have an adverse reaction, they have an allergic reaction, something goes wrong,

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whatever it is, that person will be suing everyone. They're

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going to sue the building, they're going to sue the yoga studio, they're going to

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sell the business. So, you have to anticipate that all of

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those things are going to happen. And, that's why it's important to have certain provisions

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in the agreement when you're designing to say, in the

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event that this happens, this is who's responsible. And, to have

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communication with your clients that say, hey, before you participate in this

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service, you understand A, B, and C. So, at Conscious

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Council, we call it a space rental agreement or it can be a sublease or

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a sublet. Yeah. And, those agreements are very, very, very important to have.

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And, I think that as the nature of these activities get more in the

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gray area of what's permissible, we'll see higher legal issues

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around it, which stresses the importance of having those documents in place.

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Gotcha. On a number of these

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waivers, is there anything either related to

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maybe the growth in strength training and Olympic

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squat racks and maybe some of the more

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strenuous

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activities? Have you seen people try to tighten up their waivers to

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say, you know, if you drop like a 500-pound bar on your

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back and you get paralyzed by doing that, like, it's really not on

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me. It's already covered. So the

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important thing is that the waiver reflects the activities that you do,

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the risks of those activities, and the equipment that you use.

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So typical situations that we've had problems with,

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equipment being mounted on a wall and falling off, mirrors

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falling on people, cutting people, and people getting injured

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while working with a trainer and saying that the trainer pushed them too far

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or something like that. But the waiver contemplates all of that. And the

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reason why we do specific agreements, customized

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specific agreements, is because, like, cool, if you're an Olympic

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lifting space, there are certain exercises

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we're going to specifically include in your waiver of liability as

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opposed to a CrossFit waiver and a Pilates waiver. are

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completely different. And they should be because the activities are different. So

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liability waivers of liability are always about what are the activities that you're doing

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and what are the risks of those activities and what equipment are you using in

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providing those services. Gotcha. And then from a

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standpoint of the waiver, just to stick with this

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for a minute, is that something that someone does with

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you as an example and then annually

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we have an arrangement where you guys go and update it for me, or

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do you send out notices to people saying like, hey, there's been a change in

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your state for XYZ of something that might affect your

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legal documents? Or is any of that going on or should that be going

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on? We started a membership at

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Conscious Council called Conscious Council Plus, and I started this

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in August of last year.

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And the whole idea of that is that we let people pay a membership

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And they have a constant ongoing relationship with us. So it includes unlimited

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consults, unlimited support, discounted

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prices on future services. And most of our clients

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who will get a package with us eventually will get into the membership

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because then when there's an update, we automatically reach out to them and send

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them. And then we just— like most of my clients I speak to

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on WhatsApp on a consistent basis. But to answer the question more

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directly, What you can do is anytime your

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services change, you have to update your legal agreements. So that's something that's

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really important to know. And then secondly, sometimes there is a change that will

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take place. Like recently, there's been a change with the Americans with

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Disabilities Act, the ADA, that requires

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compliance both online and in person. Whereas it

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used to be just the ADA applied to in-person wheelchair ramps

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accessibility, now it's online as well. When something like that happens, we

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send out an email to our whole community and we let people know. But specifically,

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as it relates to the waiver, the thing that you want to be in, you

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want to make sure is that so long as the activities stay the same and

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the law doesn't change, then you can keep going. But once

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you add new activities, or if there's a change in law, we always send a

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reminder out to our clients. Gotcha. And then

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in closing here, what

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would be the one word of advice for someone

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who's maybe cut some corners

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and wants to kind of get back on track, what does that

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conversation look like? Or what is my takeaways?

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It's really simple, and it's just understanding the

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value proposition of investing in law the same way there's a value

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proposition to investing with the right bookkeeper or the right accountant,

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in the same way that there's the right way to invest with anything in your

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business. And with law, eventually, it's like the one piece of

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advice I got from my mentor. He said to me, he's like, Corey, when you

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get clients, you're going to tell them, you can pay me now or you can

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pay me later. But if you want to grow a brand, have a business,

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potentially exit it, not have legal issues, be in control of the

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situation. The one piece of advice I'd say is you want to be in control

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of the situation. So many of my studios, there's

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the star teacher that decides to leave and solicits all the clients. There's

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the owner who misclassified employees and

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contractors. There's the person who's about to get sued because the waiver of

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liability didn't include something. It's like, cool, you're running a business, you're going to be

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great. Work with professionals that really understand what

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you're doing and have experience to preemptively

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evade any of the issues. And for everyone who's listening on the Halo

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Talks, the best thing to do is you can just connect with us on Instagram

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@consciouscounsel and just write HALO, H-A-L-O, in caps

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letters. And we'll know that you came from the podcast and we'll be happy to

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have a conversation and do whatever we can to support you and learn about what

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you're doing. Awesome, man. Well, we love what you're doing. We

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deal with a lot of contracts when we're doing mergers and acquisitions.

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Some of them you have a sigh of relief on and others you kind of

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scratch your head. So we're a big proponent of just get it done right

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correctly the first time, and then you actually can scale and

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you don't have that should have, could have, would have. would have, uh, if you

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actually looked at the documents prior. So thanks for coming on, man. Good to meet

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you. Safe travels. I appreciate you guys having me. Thanks so much.

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Awesome. This is Pete Moore on Halo Talks, your captain

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speaking. I am the founder and managing partner at Integrity Square.

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We've been around now for 15 and a half years. We have been

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helping people like yourselves

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00:24:14,200 --> 00:24:17,819
get capital through mergers and acquisitions, consulting, strategic

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00:24:17,819 --> 00:24:21,170
advice in the health, active lifestyle, and outdoor

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00:24:21,491 --> 00:24:24,922
halo sector, trying to help as many entrepreneurs as

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00:24:25,019 --> 00:24:28,578
possible get to the next level and take that inflection point

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and be the force behind your growth. We are helping companies that

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have at least $3 million of EBITDA, around $10

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00:24:36,339 --> 00:24:40,092
million of revenue, and we are positioned to help you get

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00:24:40,124 --> 00:24:43,043
institutional growth capital. or to

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00:24:43,189 --> 00:24:46,841
negotiate deals with strategic partners. If you go to integritysq.com/ISQ,

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00:24:50,137 --> 00:24:53,907
you can see our capabilities deck. Happy to set up a consultation at any time

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00:24:54,263 --> 00:24:57,564
that is free of charge, and we look forward to helping

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solve obesity, loneliness, and diabetes. Go Halo!