What is the Assignment/Transfer Application Fee for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
15.2 You shall pay an Assignment/Transfer Application Fee ("Application Fee") of $500.00 to us per application to assign or transfer and then upon approval, you, or if agreed upon between the parties, the subsequent franchisee must pay the Assignment/Transfer Fee ("Transfer Fee") of $25,000.00 before or at the time of transfer or assignment to a new franchisee.
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 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.
- 15.15 If the transfer is an assignment of the Franchise by an individual to a corporation in which you are and, so long as they remain the majority stockholder and the officer responsible for the full-time personal operation and supervision of the Franchise, and the transfer does not result in the cumulative transfer of over 50% of the interest or interests of the original owner or owners, the Application Fee will be charged without the Transfer Fee.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee must pay an Assignment/Transfer Application Fee of $500 when applying to transfer their franchise. This fee is payable to Fitstop USA, Inc.
The $500 application fee is nonrefundable but will be credited towards the total Assignment/Transfer Fee of $25,000 if the transfer is approved. However, if the transfer is not approved, Fitstop retains the application fee to cover the expenses incurred while processing the application.
It's important to note that the Application Fee is subject to upward adjustment based on changes in the Consumer Price Index (CPI) between the date of the Franchise Agreement and the date of the transfer. This means the actual fee could be higher at the time of transfer depending on inflation.
There are some exceptions to the transfer fee. For example, the application fee will be charged without the transfer fee if the franchise is assigned from an individual to a corporation where the individual remains the majority stockholder and is responsible for the franchise's operation, and the transfer does not result in the cumulative transfer of over 50% of the original owner's interests.