Cancellation and Refund Rules for Martial Arts Schools: Cooling-Off Periods, Death, Disability, Relocation and Chargebacks (2026)

Cancellation rights come from state health club laws, a narrow federal rule, payment laws and card network rules. This guide explains each source and how to handle a cancellation request so it does not turn into a complaint or a chargeback.

Where do a student's cancellation rights come from?

A family's right to cancel can come from five places: the contract itself; a state health club, health spa or prepaid services statute; a state automatic-renewal law; federal law, mainly the FTC Cooling-Off Rule and the payment laws; and the private rules of the card networks. These sources stack. The family gets the benefit of whichever gives the broadest right.

Your contract can give more than the law requires, and many statutes say so. New York's health club law, for example, states that nothing in it restricts the seller from offering additional or broader reasons for cancellation (N.Y. Gen. Bus. Law § 624(3)(a)). What a contract cannot do is take away a statutory right. In New York, any waiver of the health club article is void (N.Y. Gen. Bus. Law § 627).

Automatic-renewal laws add a separate layer. They do not usually create a right to quit mid-term, but they control how a family can stop a contract from renewing, what notice you must send before it renews, and how easy cancellation must be. Those rules are covered in our Automatic Renewal guide. This guide focuses on the right to end a contract and the money that follows.

Does the FTC Cooling-Off Rule apply to martial arts memberships?

Usually not, but sometimes yes. The FTC's Cooling-Off Rule (16 C.F.R. part 429) covers "door-to-door" sales. Despite the name, that means sales made somewhere other than the seller's place of business: at the buyer's home for $25 or more, or at other locations such as rented hotel rooms, convention centers, fairgrounds, restaurants or the buyer's workplace for $130 or more (16 C.F.R. § 429.0(a)). The rule expressly covers "courses of instruction or training regardless of the purpose for which they are taken" (16 C.F.R. § 429.0(b)).

It does not cover a sale made after the buyer visits a retail business with a fixed permanent location where the services are offered on a continuing basis, or a sale made entirely by mail or telephone with no other contact before performance (16 C.F.R. § 429.0(a)(1), (4)). So an enrollment signed at your school is outside the rule.

It can apply when you sell away from your school. Examples: a membership sold at a booth at a fair or expo, at a temporary event venue, or at the family's home. In those cases the buyer may cancel until midnight of the third business day after the sale. You must give a completed contract or receipt with the prescribed cancellation notice in the language used in the sales pitch, plus a separate notice of cancellation form, and refund all payments within 10 business days after receiving a valid cancellation (16 C.F.R. § 429.1). The rule does not override state laws that give equal or greater rights (16 C.F.R. § 429.2).

How long are state cooling-off periods?

Most state health club statutes give a short unconditional cancellation window after signing. The length and the trigger differ, so copy your state's wording exactly. The table on this page lists verified examples. In California, the buyer may cancel until midnight of the fifth business day of the health studio after the date of the agreement, excluding Sundays and holidays, and may cancel by mail, email from an address on file, or in person (Cal. Civ. Code §§ 1812.84(c), 1812.85(b)). In New York, the window is three business days after the buyer receives a copy of the written contract, and notice may be by U.S. mail or email (N.Y. Gen. Bus. Law § 624(2)). In Florida, it is three days, excluding holidays and weekends, with a refund within 30 days; the studio may keep a pro rata amount for days or sessions already used (Fla. Stat. § 501.017(1)(a)). Ohio's prepaid entertainment law runs the window to midnight of the third business day after the first service is available (Ohio Rev. Code § 1345.43).

Notice how the triggers differ: signing date, receipt of a copy, or first available service. If your intro program starts two weeks after enrollment, an Ohio family's window may not begin until then.

When can a student cancel for death, disability or relocation?

Health club statutes commonly let a buyer out of a long contract when life intervenes. The details vary in ways that matter: how long a disability must last, what proof you may require, how far a move must be, and how the refund is figured.

Death and disability. California requires every contract to relieve the buyer and estate of payments for services after death or disability and to refund prepaid amounts for services not received; disability means a condition, verified by a physician, that prevents the buyer from physically using the facilities (Cal. Civ. Code § 1812.89). New York allows cancellation on death, or on significant physical disability lasting more than three months, and lets the seller require reasonable evidence (N.Y. Gen. Bus. Law § 624(3)). Florida allows cancellation if the buyer dies or becomes physically unable to use a substantial portion of the services, with a weekly pro rata refund within 30 days, and lets the studio require a physician's certification (Fla. Stat. § 501.017(1)(d)). Ohio requires a proportional refund within 30 days of notice of death or disability (Ohio Rev. Code § 1345.42(B)(5)).

Relocation. New York allows cancellation if the buyer moves more than 25 miles from any club the seller operates (N.Y. Gen. Bus. Law § 624(3)). Other states set different distances or none. Some states also give service members a right to cancel on deployment or relocation. Minnesota, for example, has a statute on cancellation of club and service contracts by military service personnel (Minn. Stat. § 325G.55).

School closure or relocation. Florida lets buyers cancel if the location goes out of business or moves more than 5 driving miles without providing an equal facility within 5 miles within 30 days (Fla. Stat. § 501.017(1)(b)). New York allows cancellation when services are no longer available because of permanent discontinuance or a substantial change in operation (N.Y. Gen. Bus. Law § 624(3)). Texas requires contract terms to be extended if a spa is unusable for 30 consecutive days or more because of events beyond the owner's control (Tex. Occ. Code § 702.303(c)).

How should refunds be calculated and paid?

Where a statute sets a formula, use it. Florida uses a weekly pro rata method for death, disability and closure refunds: the contract price divided by the weeks in the term, times the weeks remaining (Fla. Stat. § 501.017(1)(b)3, (d)). California requires refund of the portion of prepaid sums allocable to services not taken (Cal. Civ. Code § 1812.89). Deadlines are short: 10 business days under the federal Cooling-Off Rule, 30 days in Florida and Ohio for the refunds noted above.

Watch what you keep. Florida defines a reasonable and fair service fee, including registration, membership and startup fees, as no more than 10 percent of the total contract price (Fla. Stat. § 501.0125(5)). Equipment and uniforms the family keeps can usually be handled separately, but say so clearly in the contract.

Where no statute applies, the contract controls, subject to UDAP law. Recommended practice is to write the refund formula into the agreement with a worked example, refund to the original payment method, and send a written statement showing the math.

What federal rights do families have to dispute charges?

Families who think they were billed after cancelling often go to their bank or card issuer. Federal law gives them several tools. For credit cards, the Fair Credit Billing Act and Regulation Z let a cardholder dispute a billing error, including a charge for services not delivered as agreed, generally by written notice within 60 days after the statement (12 C.F.R. § 1026.13). A cardholder may also assert claims and defenses against the card issuer when a merchant fails to resolve a dispute, if the cardholder tried in good faith to resolve it and the charge exceeds $50 and occurred in the same state or within 100 miles of the cardholder's address (12 C.F.R. § 1026.12(c)).

For bank drafts, a consumer may stop payment of a preauthorized transfer by notifying the bank at least three business days before the scheduled date (15 U.S.C. § 1693e(a); 12 C.F.R. § 1005.10(c)). If a recurring debit will vary in amount from the previous one or from the authorized amount, the payee or bank must give written notice of the amount and date at least 10 days before the transfer, unless the consumer opted to receive notice only outside an agreed range (12 C.F.R. § 1005.10(d)). Stopping a payment does not by itself cancel the contract, but it often ends the relationship in practice.

What do card network rules say about recurring charges and chargebacks?

Card network rules are private contracts that bind you through your merchant agreement. They are not laws, but breaking them can cost you disputes, fees, and ultimately your ability to take cards. We verified the following in the Visa Core Rules and Visa Product and Service Rules, edition of 18 April 2026. We did not verify Mastercard, American Express or Discover rules for this guide.

For recurring transactions, Visa requires the merchant to provide a simple cancellation procedure and, if the order was accepted online, at least an online cancellation procedure; to state the fixed dates or intervals of charges; and, at least 7 days before a recurring charge, to notify the cardholder when a trial, introductory or promotional period is ending, with the amount, date, and a link or other simple way to cancel online or by text (Visa rules, Table 5-21).

Visa Dispute Condition 13.2, Cancelled Recurring Transaction, lets an issuer dispute a recurring charge when the cardholder withdrew permission to charge the card, or the merchant was told the account was closed before the charge. The issuer must act within 120 calendar days of the transaction processing date, and the dispute amount is limited to the unused portion of the service. For disputes processed on or after 18 April 2026, a dispute is invalid if the cardholder's cancellation came after the date of the transaction (Visa rules, section 11.10.3). Your best defense is a dated record of when the family cancelled and proof that you stopped billing.

How should a school handle a cancellation request in practice?

Most disputes start with a cancellation that was ignored, delayed or argued over. A simple written process prevents most of them. These steps are recommended practice; where a state statute or renewal law sets a rule, the statute controls.

Accept cancellation through the channels the law requires and that families actually use. Several renewal laws now bar requiring in-person or mail-only cancellation. Connecticut's 2026 amendment is one example, and Virginia's 2026 amendment requires a method at least as easy as sign-up (see our Automatic Renewal guide). Do not make a family attend a meeting to cancel.

Record the date and time each request arrives. Confirm it in writing the same or next business day, state the effective date, the final charge if any, and any refund. Tell your billing company immediately and confirm it has stopped the draft. If you want to offer a freeze or a different program, make it a short, single offer, and do not delay the cancellation while the family decides. Some states limit save offers (for example, Minnesota and California's renewal laws). Calculate any refund using the statute's formula, pay it within the statutory deadline, and keep the file.

Frequently asked questions

Does a family always get three days to cancel a martial arts contract?

No. There is no universal federal right for in-school sales. The FTC Cooling-Off Rule covers only sales made away from your permanent place of business. Many states give a statutory window under their health club laws, ranging from three to five business days in the examples we verified, with different triggers.

A parent says their child lost interest. Do I have to let them cancel?

Only if the contract, a statute or a renewal law gives that right. Loss of interest is not a statutory reason in the states we reviewed. Many schools still allow it with notice, because forcing payment from an unhappy family often leads to complaints and disputes.

What proof can I require for a medical cancellation?

Follow your statute. California defines disability as a condition verified by a physician. Florida lets the studio require a physician's certification. New York lets the seller require reasonable evidence. Do not demand more than the law allows.

A student is moving 20 miles away. Can they cancel?

In New York the statutory threshold is more than 25 miles from any of your clubs, so not under that rule. Other states use different rules or none. Check your state profile and your contract, which may be more generous.

How long does a card customer have to file a chargeback for a cancelled recurring charge?

Under Visa's rules, the issuer has 120 calendar days from the transaction processing date for a Cancelled Recurring Transaction dispute. Other networks have their own rules, which we did not verify.

If a family stops their bank draft, is the contract cancelled?

No. A stop-payment order ends the debit, not the contract. But if the family had a right to cancel and you refused or ignored it, continued collection can create UDAP exposure. Respond to the cancellation request on its merits.

Can I charge a cancellation fee?

Not during a statutory cooling-off period, and not where your state limits fees. Florida, for example, caps service fees at 10 percent of the contract price. Where no statute applies, any fee must be clearly disclosed and reasonable under your state's UDAP law.

Official sources

1. 16 C.F.R. part 429 (Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations) · eCFR / Federal Trade Commission
2. Cal. Civ. Code §§ 1812.84, 1812.85, 1812.89 · California Legislature
3. N.Y. Gen. Bus. Law § 624 · New York State Senate
4. Fla. Stat. § 501.017 (Health studios; contracts) · The Florida Senate
5. Fla. Stat. § 501.0125 (Health studios; definitions) · The Florida Senate
6. Ohio Rev. Code § 1345.42 and § 1345.43 · Ohio Legislative Service Commission
7. Tex. Occ. Code § 702.303 · Texas Legislature
8. Minn. Stat. § 325G.55 · Minnesota Office of the Revisor of Statutes
9. 12 C.F.R. § 1026.12 and § 1026.13 (Regulation Z) · eCFR / Consumer Financial Protection Bureau
10. 12 C.F.R. § 1005.10 (Regulation E) · eCFR / Consumer Financial Protection Bureau
11. 15 U.S.C. § 1693e (Electronic Fund Transfer Act, preauthorized transfers) · U.S. Code (Office of the Law Revision Counsel)
12. Visa Core Rules and Visa Product and Service Rules (18 April 2026) · Visa Inc. (private network rules) secondary source