Is the Fitstop Application Fee subject to adjustment?
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 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 connec
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the Application Fee of $500 associated with the transfer of a franchise is subject to upward adjustment. This adjustment is tied to changes in the Consumer Price Index (CPI) as specified in the Franchise Agreement. The adjustment will be calculated between the date of the agreement and the date of the transfer.
For a prospective Fitstop franchisee, this means that the $500 application fee could increase over time due to inflation. The exact amount of the increase would depend on how much the CPI rises between the signing of the agreement and when the transfer application is submitted.
This type of CPI-linked adjustment is not uncommon in franchising, as it allows franchisors to account for the changing value of money and maintain the real value of their fees. Franchisees should review the specific CPI index referenced in their Franchise Agreement to understand how the adjustment will be calculated. It is important to factor in potential increases to the application fee when considering a franchise transfer.