All too often, the legal issues related to the expansion of any business are overshadowed by the excitement of the proposed new venture, or at least minimized based on the assumption that any such issues were addressed previously during the opening of the primary business. However, providing additional services at your yoga studio raises a number of threshold legal issues that run parallel with yoga business considerations.
The first such issue is whether your lease agreement allows you to expand your yoga business to provide these new services from your existing premises. Pull out your lease and start by reviewing the “Use” clause. (As an aside, “Use” clauses are notoriously narrow in order for the landlord to control the businesses operated from its property.) You should also refer to any clauses in your lease related to “prohibited uses” of your premises, as well as any “Rules and Regulations”. Furthermore, if you are not going to offer such services directly, but intend to allow a third party to provide the services from your studio, you need to consider whether the “assignment and sublet” provisions of your lease allow such an arrangement. In the event your lease is anything less than expressly clear as to your right to offer these services from your premises, either directly or indirectly, you should speak with your legal counsel and/or landlord. Failure to clear this issue upfront could, in a worst case, result in your landlord forcing you to cease offering such services or even a possible termination of your lease.
New services also raise new liability issues. Therefore, it is essential that you consider both protecting yourself from any personal liability, while also providing a means of compensation in the event a patron is injured during the partaking of these services. Protecting yourself from personal liability is most easily addressed by forming a corporation or limited liability company to own and operate your business. The decision as to which form of entity to utilize is one which requires careful consideration by both your legal and accounting advisors. Furthermore, if you have not been operating as a corporation or limited liability company prior to offering these services, the transfer of your on-going business to this new entity is also something to be considered with your advisors.
Proper and adequate insurance coverage is the next line of defense in protecting yourself from having to personally cover any claims for injuries and also provides a means of taking care of your patrons in such event. In considering this matter of insurance, it is critical that you discuss the situation with a qualified insurance agent experienced in insuring yoga studios and familiar with the new services you intend to offer.
And finally, you should reconsider your existing student agreements to make sure that such agreements contain appropriate waivers, releases and other agreements related to the new services. In the alternative, a new limited release agreement related to these new services might be appropriate.
As always, attention to legal matters at the onset of a new venture can only serve to minimize problems going forward and thus contribute to your potential for success. So, address the matters discussed above and consult with your attorney and accountant prior to committing yourself to expanding your business. Both you and your business will benefit.
This article is intended to present an overview. Readers should always consult with legal counsel regarding their particular legal issues.
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