Can Fitstop appoint an affiliate as a designated supplier?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We reserve the right to appoint ourselves, our affiliate(s) and/or any third party as the designated or Approved Supplier for any Required Item in the future, which we will communicate via the Manuals or other prior written notice.
Approved Suppliers
We have the right to require you to purchase any items or services necessary to operate your Franchised Business from a supplier that we approve or designate – which we refer to as an "Approved Supplier" and may include us or our Affiliate(s). We will provide you with a list of our then-current Approved Suppliers in writing as part of the Manuals or otherwise in writing, and we may update or modify this list as we deem appropriate.
We are not currently the Approved Supplier for any Required Items you must acquire or use in connection with your Franchised Business, except: (i) any technology services we determine to provide as part of any Technology Fee we determine to establish in the future; and (ii) any ongoing Additional and/or Refresher Training, and/or new or replacement Instructor Training, that occurs once you have opened your Franchised Business, and for which we may charge our then-current Training Fee for the kind of training at issue; and (iii) any services we determine to provide as part of our current Fund.
The products or services we require you to purchase or lease from an Approved Supplier, or purchase or lease in accordance with our standards and specifications, are referred to collectively as your "Required Purchases." We estimate that your Required Purchases will account for approximately 65% to 85% of your total costs incurred in establishing your Franchised Business, and approximately 25% to 65% of your ongoing costs to operate the Franchised Business after the initial start-up phase. Please be advised that these ranges for "Required Purchases" include the lease for your approved Premises given that it must meet our then-current site selection criteria and specifications.
Right to Derive Revenue
We and our affiliates may derive revenue from the sale of products, supplies, services and equipment to you by us, our affiliates and our other Approved Suppliers.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–23)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop reserves the right to appoint its affiliates as designated suppliers for any required item in the future. This decision will be communicated through the manuals or other written notice. This means Fitstop franchisees may be required to purchase certain items necessary to operate their franchise from Fitstop's affiliate.
Fitstop also has the right to require franchisees to purchase items or services from an approved or designated supplier, which may include Fitstop or its affiliates. Fitstop will provide a list of approved suppliers in writing, which may be updated or modified. As of the issue date of the FDD, Fitstop is not currently the approved supplier for any required items, except for certain technology services, ongoing training, and services provided as part of their fund.
Fitstop estimates that required purchases will account for 65% to 85% of the total costs incurred in establishing the franchised business, and approximately 25% to 65% of the ongoing costs to operate the franchised business after the initial start-up phase. These ranges include the lease for the approved premises, given that it must meet Fitstop's site selection criteria and specifications. Fitstop and its affiliates may also derive revenue from the sale of products, supplies, services, and equipment to franchisees by Fitstop, its affiliates, and other approved suppliers.