Subscription Plan Setup and Compliance Guide

This document provides a detailed process for setting up subscription plans or contracts, ensuring they comply with local laws and cultural expectations. It covers aspects like billing frequency, contract terms, and handling of pro-rata and taxes. The document also touches on auto-renewal, anniversary billing, and advance rentals to protect contracts. Additionally, it discusses compliance issues such as deferred billing and the right to rescind, ensuring a comprehensive understanding of subscription management.

Step 1

To configure your subscription plans or contracts to align with local laws, regulations, and cultural expectations, consider how pro-rata or taxes are handled. Begin by navigating to the appropriate section.

Step 2

Set up a plan by providing the plan details, including billing frequency, billing cycle, contract term, and actions upon contract expiration. This information becomes visible once configured as a contract.

Step 3

Choose whether the plan will be a paid-in-full plan, drop-in, or pay-as-you-go plan with month-to-month billing. In certain regions, ensure compliance by preventing contracts from converting to pay-as-you-go upon expiration and enabling auto-renewal where necessary.

Step 4

If auto-renewals are not explicitly stated in your terms and conditions, allow the contract to expire and negotiate a new contract with the client. In regions where billing is not required on a fixed date, consider anniversary billing. If selecting a fixed date, factor in cultural norms, such as monthly salary payments on the first day of the month.

Step 5

Consider aligning billing and payment collections with cultural norms, such as initiating billing and member payment collections on the first of each month. Set the sign-ups and billing cycle to correspond with the first of every month.

Step 6

Explore the deposit section. In certain regions, advance rentals can safeguard contracts against members leaving midway. This approach reduces the need for debt collection measures.

Step 7

Instead of pursuing debt collection, include a provision in your terms to forfeit the advance rental if the member does not complete the contract term. For instance, collect an advance deposit equivalent to the eleventh and twelfth months on an annual contract, similar to an apartment lease.

Step 8

Forfeiting the last month's rent may apply if the contract is terminated prematurely. Additionally, in certain regions, pre-sales limitations prevent collecting fees before the official opening, including sign-up fees.

Step 9

In such cases, decide on handling future subscription charges by deferring all charges until the member starts their membership. This means not collecting the first recurring charge, pro-rata, or any sign-up fees.

Step 10

Deferring charges until the member starts ensures compliance in regions where fees cannot be collected until official authorization is granted. Additionally, consider how to address contract cancellations and other compliance points.

Step 11

Many jurisdictions have a contract cool-off period or right to rescind, allowing members to cancel within a specific timeframe, such as three days, without incurring cancellation fees.

Step 12

Ensure your contracts accommodate this right, providing flexibility for members while maintaining compliance.

Updated on: 04/12/2025