What is the Assignment/Transfer Fee for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
or by operation of law), directly, indirectly, or contingently any interest in this Franchise without our express written consent, and then only in accordance with the express limitations of this Section.
- 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.
- 15.3 You shall notify us in writing of the terms and conditions of any proposed transfer, including, but not limited to the interest proposed to be transferred, the purchase price or other consideration to be received therefore, any credit or financing terms being extended by the seller, the date of the proposed transfer, and all other pertinent provisions of the proposed transfer. In addition, a copy of any and all contracts, agreements, memoranda of sale, deposit receipts, letters of intent, side letter agreements and/or the like, must also be forwarded to us as soon as signed by the proposed seller. Following receipt of all pertinent data and documents concerning the proposed transfer, including any additional information concerning the transaction requested by us to you, we have 30 calendar days within which to advise you in writing of our election to have the interest proposed to be transferred ass
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 two fees to transfer their franchise. First, the franchisee must pay an Assignment/Transfer Application Fee of $500 when submitting the application to Fitstop. Then, upon approval of the transfer, the franchisee must pay an Assignment/Transfer Fee of $25,000. This Transfer Fee must be paid before or at the time of the transfer or assignment to the new franchisee.
Fitstop requires written notification of any proposed transfer, including all terms and conditions, such as the interest to be transferred, purchase price, financing terms, and the proposed transfer date. Copies of all contracts and agreements related to the sale must also be provided to Fitstop. After receiving all required information, Fitstop has 30 calendar days to decide whether to exercise its Right of First Refusal, allowing them to take over the interest on the same terms as the proposed transferee or assign it to a third party with a payment guarantee.
It is important to note that the $25,000 transfer fee is a significant cost that a franchisee needs to consider when planning to sell their Fitstop franchise. The $500 application fee is non-refundable, regardless of whether the transfer is approved. The Right of First Refusal clause also gives Fitstop considerable control over who can become a new franchisee, potentially impacting the sale process and terms.