Is the Fitstop Application Fee credited towards the Transfer Fee before or after the transferee is approved?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
The Application Fee will be credited toward the Transfer Fee, as defined above, if the transferee is approved but will otherwise be forfeited to defray our expenses in connection with processing the application.
The Application Fee is subject to upward adjustment by any change in the Consumer Price Index specified in this Agreement between its date and the date of the transfer.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the Application Fee is credited towards the Transfer Fee if the transferee is approved. The document specifies that the $500 Application Fee will be credited toward the Transfer Fee if the transferee is approved. If the transferee is not approved, the Application Fee is forfeited to cover Fitstop's expenses for processing the application.
This means that a prospective Fitstop franchisee who is planning to transfer their franchise to someone else will only receive credit for the Application Fee if Fitstop approves the new transferee. If the application is rejected, the original franchisee will not get that $500 back. This policy incentivizes franchisees to ensure they find qualified transferees who are likely to be approved by Fitstop.
It is also important to note that the Application Fee is subject to upward adjustment based on changes in the Consumer Price Index (CPI) from the date of the agreement to the date of the transfer. This means the franchisee may end up paying more than $500 if there has been an increase in the CPI during that time. Franchisees should factor in potential CPI adjustments when planning for a transfer.