Tennessee Code Title 47. Commercial Instruments and Transactions § 47-18-318

(a) In order to provide a degree of protection to members of health clubs, each health club shall post a bond in an amount of twenty-five thousand dollars ($25,000) for each location doing business in this state. The bond shall be made with a bond issued by a corporate surety authorized to do business in this state.

(b) The bond shall be maintained for two (2) years following the date on which the health club location ceases to conduct business in this state.

(c) In an action brought by the attorney general and reporter pursuant to part 1 of this chapter, the attorney general and reporter shall have the right to request that the total amount of the bond posted by the health club be awarded to the state for consumer restitution. Any person who has entered into a health club agreement that is not fulfilled by the operator may make a claim against the bond.

(d) This section shall not apply to any health club or health club operator that has, for at least seven (7) consecutive years, operated under substantially the same ownership and control. Any health club claiming the exemption pursuant to this subsection (d) shall maintain documentation as of January 1 of each year in which the exemption is claimed demonstrating the required period of ownership. Such proof shall be retained for a period of at least five (5) years from the end of the year in which the exemption is claimed. This documentation shall be made available for examination upon request of any law enforcement agency or the attorney general. A refusal to provide such documentation shall constitute a violation of this part.