What actions must a Fitstop franchisee take immediately upon termination of the Franchise Agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.5 Post-Termination Obligations. Upon termination of this Agreement for any reason, you shall immediately bring all accounts with us current and stop using any and all of our trade names, the Proprietary Marks, any proprietary software or resulting Member/Customer Information, other Confidential Information and/or trade secrets, patented items, and other commercial property and symbols; shall discontinue the use of any signs, displays, advertising and/or promotional material, and the like, that are unique or distinctive to Franchise System; return to us the Manual(s) and all copies thereof and all other material obtained by you from or through us; and discontinue the use of all social media accounts associated with the Franchise.
You shall refrain from doing anything which would indicate that you are or ever were an authorized franchise or associate of us.
- 16.6 Option to Purchase Operating Assets of Franchised Business. Upon termination of this Agreement, we have the option but not obligation to purchase from you any merchandise on hand or on order by you, and those items of equipment or other tangible items used in the operation of the Franchised Business as may be indicated by us.
The purchase price for such items will be equal to their net depreciated book value, without any allowance for your going business value or goodwill.
The terms of any purchase will be negotiated at the time of the sale, but must include typical representations and warranties by you with respect to all the rights and other assets being assigned free and clear of all liens and encumbrances.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, upon termination of the Franchise Agreement for any reason, a franchisee must take several immediate actions. These obligations are designed to protect Fitstop's brand and ensure a clean break between the franchisee and the franchise system.
Specifically, the franchisee must immediately bring all accounts with Fitstop current, ensuring that all outstanding financial obligations are settled. The franchisee must also cease using all of Fitstop's trade names, proprietary marks, any proprietary software, member/customer information, confidential information, trade secrets, patented items, and other commercial property and symbols. This includes discontinuing the use of any signs, displays, advertising, and promotional material unique to the Fitstop franchise system. Furthermore, the franchisee is required to return the Manual(s) and all copies, along with any other materials obtained from Fitstop. Finally, the franchisee must discontinue the use of all social media accounts associated with the franchise.
In addition to these immediate actions, the franchisee must refrain from any activity that would suggest they are currently or were previously an authorized Fitstop franchisee or associate. This prevents any potential confusion or misrepresentation of affiliation with the Fitstop brand. These post-termination obligations are comprehensive, covering various aspects of the business to ensure the Fitstop brand remains protected and distinct.
Fitstop also has the option, but not the obligation, to purchase from the franchisee any merchandise on hand or on order, as well as equipment or other tangible items used in the operation of the franchised business. The purchase price for these items will be equal to their net depreciated book value, without any allowance for the franchisee's going business value or goodwill. The terms of any such purchase would be negotiated at the time of the sale and must include typical representations and warranties by the franchisee regarding the rights and assets being assigned free and clear of all liens and encumbrances.