What agreements must a transferring Fitstop franchisee provide to the transferee?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.12 Conditions for our approval of transfer include, but are not limited to, the following: (1) you are in full compliance with this Agreement; (2) you pay us all amounts due; (3) transferee and its general managers satisfactorily complete our training program, (4) transferee executes our then-current form of Franchise Agreement; (5) the transfer fee is paid; (6) we approve any written agreements regarding transfer; (7) you supply any additional information we require; (8) you provide, as a personal covenant to the transferee, in addition to your covenants to us, an agreement not to seek to divert business from us and our franchisees; and (9) you sign a general release and other documents we require.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a transferring franchisee must provide a personal covenant to the transferee. This covenant is an agreement not to divert business away from Fitstop and its franchisees.
In addition to this specific agreement, the FDD outlines several other conditions and requirements related to transfers. These include ensuring the franchisee is in full compliance with the existing agreement, paying all outstanding amounts owed to Fitstop, and securing the franchisor's approval for any written agreements pertaining to the transfer. The transferee must also complete Fitstop's training program and execute the then-current Franchise Agreement. Payment of transfer fees and supplying any additional required information are also necessary steps.
These stipulations ensure that Fitstop maintains control over who joins their franchise system and that the new franchisee is adequately prepared. The Right of First Refusal allows Fitstop to step in and assume the franchise themselves or designate another party, further safeguarding their interests. The non-compete agreement from the seller protects the brand and existing franchisees from potential competition from a former owner.