Case Background : As manager of the Challenger Athletic Club, you must refuse th

Question

Case Background:

As manager of the Challenger Athletic Club, you must refuse the application of Jeff Lanier for an Extended Membership. This is strictly a business decision. You liked Jeff very much when he applied, and he seems genuinely interested in fitness and a healthy lifestyle. However, your Extended Membership plan qualifies the member for all your testing, exercise, recreation, yoga, and aerobics programs. This multiservice program is expensive for the club to maintain because of the large staff required. Applicants must have a solid credit rating to join. To your disappointment, you learned that Jeff’s credit rating is decidedly negative. His credit report indicates that he is delinquent in payments to four businesses, including Total Body Fitness Center, your principal competitor.

You do have other programs, including your Drop In and Work Out plan, which offers the use of available facilities on a cash basis. This plan enables a member to reserve space on the racquetball and handball courts. The member can also sign up for yoga and exercise classes, space permitting. Since Jeff is far in debt, you would feel guilty allowing him to plunge in any more deeply.

Your Task.

As the membership manager at Challenger Athletic Club, Calista Brentwood, write a letter. Refuse Jeff Lanier’s credit application, but encourage his cash business. Suggest that he make an inquiry to the credit-reporting company Experian to learn about his credit report. He is eligible to receive a free credit report if he mentions this application. Write your letter to Jeff Lanier, 3100 South Vista Avenue, Apt. 310, Boise, ID 83705. Use 7000 Harvard Ave., Boise, ID 83716 as the address for Challenger Athletic Club.

Set your letter up in proper full-block letter format as discussed on pages B-2 through B-7 in Appendix B of your text. Please note that you do not have company letterhead as do the examples in your text; as a result, you will use a plain-paper return address as discussed on page B-6 and as modeled on the document attached with this week’s assignments.

Explanation / Answer

Hi Jeff,

Thank you for your application for an Extended membership. The Extended membership plan qualifies the member for testing, exercise, recreation, yoga and aerobics. For qualifying for the Extended membership it is a pre-requisite to have a sound credit rating. Unfortunately, on reviewing your credit report that has been sent to us, we have learnt that your credit rating is not up to the mark for qualifying for the plan. The reason for the low credit rating was given as delinquency in payments of debts.

However, keeping in mind your genuine interest in fitness and a healthy lifestyles we do recommend to you the Drop In and Work Out plan, which offers the use of available facilities on a cash basis. This will enable you to reserve your space on the racquetball and handball courts and also sign up for yoga and exercise classes.

We also would like to recommend you to check and make an inquiry regarding your credit rating with Experian a credit-reporting company if in doubt. You are entitled for a free credit report on presenting this application. Also, kindly get to know ways to push up your credit rating, as we would like you to enroll for the Extended membership again and qualify for it.

Thanking You,

Manager – Challenger Athletic Club

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