Can Fitstop assign the Franchise Agreement to another party?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| h. "Cause" defined—non-curable defaults | Section 16.1 | Non-curable defaults include being convicted of, pleading guilty or no contest to, or receiving deferred adjudication for a felony, crime of moral turpitude, or certain other crimes; attempts to hack or crack our computer software; disclosure of confidential information; abandonment; unauthorized transfer; material misrepresentations when you purchase the franchise; repeated failure to comply with Franchise Agreement or Manual requirements, even if corrected; or if you are declared insolvent or bankrupt. |
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| i. Franchisee's obligations on termination/nonrenewal | Section 16 | You must: (i) immediately cease use of all our Proprietary Marks, Confidential Information, trade secrets, and all aspects of the Franchise System; (ii) immediately return to us all advertising materials, products, or writing that contain, bear or otherwise use and of the Marks and IP, as well as all materials containing Confidential Information; (iii) pay all outstanding amounts due and owing to us under the Franchise Agreement; (iv) assign all telephone numbers and domain names associated with the Franchised Business to us (at our option) or otherwise cancel any registration for the same; (v) afford us (directly or via an operating affiliate) the right to (a) assume the lease for your Approved Premises, and/or (b) acquire all other operating assets associated with the Franchised Business at net depreciated book value, as detailed more fully in your Franchise Agreement; and (vi) comply with all confidentiality, non-disclosure and other post-term restrictive covenants detailed more fully below in this Item 17 Chart. |
| j. Assignment of contract by franchisor | Section 15.1 | The Franchise Agreement is fully assignable by us. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–47)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop has the right to assign the Franchise Agreement to another party. Specifically, Section 15.1 of the Franchise Agreement states that it is fully assignable by Fitstop.
This means that Fitstop can transfer its rights and obligations under the Franchise Agreement to a third party without needing the franchisee's consent. This is a fairly standard clause in franchise agreements, allowing the franchisor flexibility in the event of a merger, acquisition, or other corporate restructuring.
For a prospective Fitstop franchisee, this clause implies that the entity they initially contracted with may change during the term of the agreement. While the core terms of the agreement should remain the same, it's important to consider the potential impact of dealing with a new management team or corporate structure if Fitstop were to assign the agreement. Franchisees should seek legal counsel to fully understand the implications of this clause.