Lifetime Fitness 2011 Annual Report Download - page 25

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19
We could be subject to claims related to health or safety risks at our centers and off-premises activities and events.
Use of our centers and participation in off-premises activities and events poses potential health or safety risks to
members or guests through exertion and use of our equipment, swimming pools, rock climbing walls, waterslides,
endurance events and other facilities and services. Claims may be asserted against us for injury or death suffered by
someone using our facilities, services, activities and events. In addition, the child center services we offer at our
centers expose us to claims related to child care. Lastly, we also face liability in connection with our construction
and remodel of our centers.
We are subject to extensive government regulation, and changes in these regulations could have a negative effect
on our financial condition and results of operations.
Our operations are subject to various federal and state laws and regulations, including but not limited to the
following:
• federal and state consumer protection laws related to the advertising, marketing and sale of our products
and services;
• state statutes that regulate the sale and terms of our membership contracts;
• state and local health or safety regulations related to various center operations, such as LifeCafe, LifeSpa or
Aquatics;
• federal and state regulation of ancillary health and fitness-related products and services;
• state licensing or other regulation of our service providers, such as cosmetologists, massage therapists and
registered dietitians; and
• federal and state laws and regulations governing privacy and security of information.
Any changes in such laws or regulations could have a material adverse effect on our financial condition and results
of operations.
We could be subject to claims related to our ancillary health and fitness-related offerings, and the value of our
brand may suffer.
We offer directly or through third parties a variety of ancillary health and fitness-related products and services, such
as nutritional products, blood screenings and other fitness assessments, chiropractic services, and medi-spa services.
These products and services are, or may be subject to, legal and regulatory requirements. We cannot assure you that
there will be no claims against us regarding the ingredients in, manufacture of or results of using our nutritional
products, or any claims against us regarding our provision of other health and fitness-related services or our
relationships with third parties. Furthermore, we cannot assure you that any rights we have under indemnification
provisions and/or insurance policies will be sufficient to cover any losses that might result from such claims. Any
publicity surrounding such claims may negatively impact the value of our brand.
If it becomes necessary to protect or defend our intellectual property rights or if we infringe on the intellectual
property rights of others, we may become involved in costly litigation or be required to pay royalties or fees.
We may have disputes with third parties to enforce our intellectual property rights, protect our trademarks, determine
the validity and scope of the proprietary rights of others or defend ourselves from claims of infringement, invalidity
or unenforceability. Such disputes may require us to engage in litigation. We may incur substantial costs and a
diversion of resources as a result of such disputes and litigation, even if we win. In the event that we do not win, we
may have to enter into royalty or licensing agreements, we may be prevented from using the marks within certain
markets in connection with goods and services that are material to our business or we may be unable to prevent a
third party from using our marks. We cannot assure you that we would be able to reach an agreement on reasonable
terms, if at all. In particular, although we own a federal trademark registration for use of the LIFE TIME FITNESS®
mark in the field of health and fitness centers, we are aware of entities in certain locations around the country that
use LIFE TIME FITNESS, LIFE TIME or other similar marks in connection with goods and services related to
health and fitness. The rights of these entities in such marks may predate our rights. Accordingly, if we open any
centers in the areas in which these parties operate, we may be required to pay royalties or may be prevented from
using the mark in such areas.