Are affiliate-owned Fitstop locations required to contribute to the Brand Development Fund?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
y your Franchised Business.
Currently, affiliate-owned locations may – but are not obligated to – contribute to the Fund in the same amount and manner as System Franchised Businesses. Other System franchisees' respective Fund contributions may be calculated at a different rate or on a different basis and, under limited circumstances, certain franchisees may not be required to pay Fund fees.
We have full discretion to settle or forgive any accrued and unpaid Fund contributions owed by a franchisee.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 24–35)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, affiliate-owned locations are not obligated to contribute to the Brand Development Fund. While System Franchised Businesses must contribute 2% of their gross revenue to the Fund, affiliate-owned locations have the option to contribute the same amount and in the same manner.
This means that a prospective Fitstop franchisee should be aware that while they will be required to contribute 2% of gross revenue to the Brand Development Fund, affiliate-owned locations may not be contributing, or may be contributing a different amount. This could impact the overall funds available for marketing and brand development, and the franchisee should inquire about the participation rate of affiliate-owned locations.
Fitstop retains the discretion to adjust contribution rates for other franchisees and, in some cases, may waive the contribution requirement altogether. This flexibility allows Fitstop to manage the Fund strategically, but it also introduces an element of uncertainty for franchisees regarding the consistency and equity of contributions across the system. The FDD also states that Fitstop has not yet established a Fund, and as of December 31, 2023, neither collected nor expended any Fund Contributions.