So sorry you are going through this - it really shouldn't be this way - these are kids and the whole "banned from the gym" thing is ridiculously dramatic, if you ask me! (Although, a favorite coach from DD old gym who recently gave 2 week notice to her old HC - because he is moving out of state to a job in an entirely different industry - was likewise "banned" that moment...).
All I can say is that it sounds like moving gyms IS still the right thing (why would you want your child to be taught by someone with so little respect for their well-being that they wouldn't allow a parent to research other options). Probably the close gym never would have worked, you're just finding out the hard way.
I hope you find a good program for her within a reasonable driving distance. I keep reminding myself that whether DD is happy at her new gym or not (and she's getting close to as happy as she was last year at old), I know the training is better, and more importantly the HC is upfront, honest, doesn't play emotional games, treats her employees respectfully and expects parents to "make the best decision for their child" when considering her gym....and the previous HC was not those things - so its a better place for her emotionally. Hopefully you'll find something similar. I still think a confident coach with a well run program will let the program speak for itself, and no "banning" would be necessary (of course, non-payment, dishonesty on parents part, etc would be different issues...)