Is the Fitstop Application Fee refundable if the transfer is not approved?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
rned transaction and any subsequent proposed sales or transfers by you. You shall provide us with written notice of any proposed transfer and shall comply with the provisions of the Right of First Refusal.
- 15.7 Included with your notice of proposed transfer, unless exempted, shall be your nonrefundable Application Fee of $500 payable to us. The A
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the $500 Application Fee associated with a transfer is nonrefundable. Fitstop stipulates that this fee is payable to them.
Specifically, the FDD states that the Application Fee will be credited towards the Transfer Fee if the transferee is approved. However, if the transferee is not approved, the Application Fee will be forfeited to cover Fitstop's expenses related to processing the application.
This means that a prospective Fitstop franchisee who is considering transferring their franchise should be aware that the $500 Application Fee is at risk of being lost if the transfer is not ultimately approved by Fitstop. This is a fairly standard practice in franchising, as the franchisor incurs costs in reviewing and processing transfer applications regardless of the outcome.