R152-23-7. Procedure When Facility Closes

(1) In the event a health spa shall, for any reason, close, discontinue normal operations for a period of ten (10) business days, or otherwise cease to do business at any of its facilities while having outstanding obligations to provide health spa services to consumers holding valid consumer contracts, the health spa shall, after obtaining the Division's approval, immediately refund the unused portion of all fees, including the proration of any fees paid up front. The proration of fees paid up front is required only on initial contracts unless similar fees were charged when the contracts were renewed.

(2) Within ten (10) business days of the closure of its facility, the health spa shall provide the Division with a copy of each consumer contract that was valid on the date of closure.

(3) The Division shall determine the amount of refunds that shall be made and to whom. Such refunds shall be made under the supervision and with the prior approval of the Division. If sufficient funds are not available to make a full refund, then the refund shall be made from the surety proceeds on a prorata basis based upon the full amount that is determined to be due to all consumers. The refund amount due shall be determined by multiplying the number of days remaining on the consumer's contract term as of the date of closure by the daily cost of the health spa services contract to the consumer at the time of purchase. The health spa shall remain responsible for the balance.

(4) For purposes of Sections 13-23-5(6) and (7), the distance of five (5) miles shall be calculated by the distance traveled by an automobile over a public road.

(5) The notice required in Section 13-23-5(7) shall be in writing and shall include the following:

(a) The date on which the health spa will cease operations or relocate and fail to offer an alternative location within five miles;

(b) Information concerning consumers holding contracts with the health spa, including:

(i) the total number of active consumer contracts;

(ii) the name, address, email address, and telephone number of each consumer;

(iii) the total cost of each consumer contract; and

(iv) the effective beginning and ending dates of each consumer contract;

(c) Proof of the bond, letter of credit, or certificate of deposit required under Section 13-23-5(2)(a) and proof that the bond, letter of credit, or certificate of deposit will remain in force for one year after the health spa notifies the Division that it has ceased all activities regulated by Title 13, Chapter 23 of the Utah Code;

(d) A description of what action the health spa plans to take with regard to its consumers holding contracts for health spa services, including:

(i) the amount of each consumer's refund;

(ii) any reason refunds are not to be made;

(iii) an explanation of how refunds are to be calculated; and

(iv) copies of the refund checks that the health spa has issued.

(e) Any complaints that the health spa has received from consumers and how the complaints were resolved.

(6) Within thirty (30) days prior to closing, the health spa shall notify consumers of the closure in writing and set forth what actions the health spa plans to take in regards to transfers, cancellations or refunds.

(7) Once the health spa has notified the Division of its intent to cease operations, it may not offer, sell or attempt to sell, solicit the sale of, or become a party to any new contracts to provide health spa services within forty-five (45) days preceding the anticipated date of closure.

(8) In the event a health spa transfers its contracts to an alternative facility located within five (5) miles of the facility of origin, neither the health spa facility transferring consumer contracts nor the health spa facility receiving consumer contracts may charge any additional fees to contract holders in order to gain access to or otherwise utilize services originally contracted for.

(a) Contract transfers shall be serviced at health spa facilities that are comparable to the facility of origin. In instances where consumers have paid for services that are not offered or are otherwise not comparable, the health spa shall obtain written authorization from consumers to transfer to the noncomparable facility or make an offer to rescind the contract.