Opening a studio in Texas: the bond, the 31-day rule and the tax you don't owe

October 14, 2026

This is for anyone opening a Pilates, yoga, barre or boutique fitness studio in Texas. Texas law calls your business a health spa, and the Secretary of State registers it. Whether you also post a bond of $20,000 or more turns on how you sell classes. On our reading, autopay, a contract longer than 31 days or a pack prepaid past 31 days puts you in the bond column.

The Health Spa Act reaches class studios

Chapter 702 of the Texas Occupations Code defines a health spa as a business that sells “memberships that provide the members instruction in or the use of facilities for a physical exercise program.” A class studio fits. The nearest exclusion covers an entity “operated exclusively to” teach dance or aerobic exercise. A Pilates or yoga studio is neither, so we would plan on registering.

Registration is per location. The fee is $100 a year on SOS Form 3001, signed before a notary, with a sample of every member contract you will use. Post the certificate in a conspicuous place. Put the registration number in every contract. Section 702.404 also bars any “print or electronic” ad without it. We read that to include your website and your Instagram posts.

The bond, and the five things that trigger it

Section 702.151 requires security of $20,000 to $50,000. SOS Form 3002 ties the amount to what members have prepaid at each location. Up to $20,000 of prepaid memberships means a $20,000 bond, and it rises in $5,000 steps to $50,000 once prepaid memberships pass $45,000. One surety seller lists $20,000 and $25,000 Texas health spa bonds at a flat $250 a year.

You skip the bond by filing Form 3006 and swearing that you do not require, or offer a plan that requires, any of these (section 702.202):

• a membership contract for a term over 31 days
• a note or retail installment contract
• “a draw or other recurring debit on a financial institution” in your favor
• an initiation fee or any other fee besides monthly dues
• prepayment for a term over 31 days

The third one is the one a studio with memberships has to think about. A membership that charges the member's card every month reads to us like a recurring debit. A 10-pack good for 90 days is prepayment past 31 days. The other way out needs five years under the same ownership and $50,000 of net book assets per location, which a new studio does not have.

What that means for your products

The exemption covers the whole menu. One autopay plan and the location needs security. At the $250 price above, the bond may cost less than giving up autopay.

In Frontmat, memberships bill monthly on the member's card through Stripe, so a Texas studio selling them should plan on the bond. Class packs can expire after a number of days you set, or never. Set 31 or fewer if you are building toward the exemption.

Founding members and the escrow account

You may sell memberships before you open. Money taken before opening day is a prepayment, and section 702.352 sends it to an escrow account at an FDIC-insured bank. Within 14 days of the first prepayment you deposit it and send the SOS a notarized statement naming the bank, then deposit at least every two weeks until the 30th day after you open. Only an operator who has run a Texas health spa for two years or more, with no closure complaints or suits, is exempt.

In Frontmat a membership can be sold before opening with billing starting on opening day, and a founding membership can be capped at a number of spots. A founding member signed that way has paid nothing before you open. The contract still has to state your proposed opening date.

Section 702.402 bars a special offer or discount made to fewer than all prospective members, except a group price. We read that to mean a founding rate should be open to anyone who asks while the spots last.

What the member contract must say

• In writing, signed by the member, with your registration number (702.301), for a term of three years or less (702.303).
• The notices in section 702.304, in at least 10-point type that is bold, capitalized, underlined or otherwise set apart: do not sign with blanks; cancel by certified mail by midnight of the third business day; cancel if you close or move more than 10 miles; cancel on death or total and permanent disability. If you post security, add the notice on claiming against it.
• If you are not exempt, a complete copy and a receipt for any payment, handed over before the member signs (702.302).

A contract that does not comply, or one signed while you are unregistered, is void (702.311).

Sales tax: live classes are not taxed

The Comptroller treats “initiation and membership fees to gyms, athletic clubs, health clubs, and physical fitness or studio centers” as a taxable amusement service. The state rate is 6.25 percent. Cities, counties and districts can add up to 2 percent, for a maximum of 8.25 percent.

Live instruction is the carve-out. The Comptroller's February 2022 Tax Policy News says live group classes that are instructional, held at a set time with an instructor giving guidance and feedback, are not taxable. Its examples include Pilates and yoga. Recorded sessions are taxable. Separately stated one-on-one training is not, when the trainer directs the session.

So classes, class packs and privates sold on their own are in good shape. On-demand video and retail are taxable, and open-studio hours look to us like the taxable membership side. A monthly plan called a membership is the gray area, because the same notice taxes membership fees to studio centers. Spend an hour with a Texas CPA before you name your products. If anything you sell is taxable, build the tax into the price or collect it with another tool. Frontmat does not add a sales tax line to packs or memberships today.

Your waiver

Texas enforces a release of your own negligence only if it passes two fair notice tests. The Texas Supreme Court applied them to releases in Dresser Industries v. Page Petroleum (1993). Express negligence means the document itself has to say it covers your own negligence. Conspicuousness means that language has to stand out. The court gave capital headings and contrasting type as examples. A release that fails either test is unenforceable as a matter of law.

Minors are different. In Munoz v. II Jaz (1993), a Houston court of appeals held that a parent's power under the Family Code does not include waiving a child's claim for personal injuries. If you teach teens, a parent's signature does not release the teen's claim.

In Frontmat the waiver is your own text. Members sign it once, at their first booking, with a typed name. We store the time and a fingerprint of the exact wording they signed, so an edit later never changes what an earlier member agreed to. It is plain text, so the conspicuous part is done in CAPITALS. We never supply waiver language. Get yours from a Texas lawyer.

Workers' comp and texts

Workers' comp is optional for most private employers in Texas. If you skip it, you post a notice of no coverage, give new hires written notice, and file a notice with the Division of Workers' Compensation after your first hire and every year between February 1 and April 30. In an employee's injury suit you also lose three defenses: contributory negligence, assumed risk and a co-worker's negligence (Labor Code 406.033).

Since September 1, 2025, SB 140 counts a text sent to get someone to buy as a telephone solicitation under chapter 302 of the Business and Commerce Code. Sending those takes an SOS registration certificate and $10,000 in security. The exemption for selling to current and former customers needs two years under the same business name. Frontmat sends booking texts only (waitlist offers, confirmations and cancellations) to members who opted in, and stores the time and wording of each opt-in. It sends no marketing texts. If you plan promotional texts, read chapter 302 first.

Before you sign anything

1. Decide your menu: autopay, signup fees or packs past 31 days mean the bond; otherwise Form 3006.
2. Register each location with the Secretary of State on Form 3001, $100, notarized, with sample contracts and Form 3002 (bond) or Form 3006 (exemption).
3. Write the member contract with your registration number, the 702.304 notices and your opening date if you have not opened.
4. If you take money before opening, open the escrow account and file the notarized statement within 14 days.
5. If you sell anything taxable, attach your health spa certificate to the sales tax permit application. Section 702.107 bars the permit without it.
6. Have a Texas lawyer write the waiver, with your own negligence named plainly and in capitals.

This is our reading of the statutes, forms and agency pages as of October 14, 2026. It is not legal advice. Confirm the health spa questions with the Texas Secretary of State and the tax questions with the Comptroller.

If you are still choosing where to open, we keep the rules in every state on one page.