Does Fitstop benefit financially from a franchisee securing financing?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company's franchise arrangements generally include a license which provides for payments of initial fees as well as continuing royalties to the Company based upon a percentage of sales.
- 12.4.6 Rebates. You acknowledge that we may negotiate and/or receive rebates or other financial incentives from the manufacturers and suppliers of any Required Items and/or Approved Products that a System franchisee must acquire and/or offer for sale at the Premises or otherwise in connection with the Franchised Business.
You agree that we may retain for our own benefit all rebates or payments received from any Approved Suppliers and/or other providers/suppliers, whether or not such rebates or payments are made as a consequence of purchases by you.
Source: Item 10 — FINANCING (FDD page 24)
What This Means (2024 FDD)
Based on the 2024 Fitstop Franchise Disclosure Document, it is not explicitly stated whether Fitstop benefits financially from a franchisee securing financing. However, the document does outline several ways in which Fitstop receives payments and benefits from franchisees.
Fitstop collects initial franchise fees and ongoing royalties based on a percentage of sales. Additionally, Fitstop may negotiate and receive rebates or other financial incentives from manufacturers and suppliers of required items and approved products that franchisees must acquire. Fitstop retains these rebates or payments for its own benefit, regardless of whether they result from the franchisee's purchases.
While the FDD does not directly address financing, prospective franchisees should inquire with Fitstop about any potential direct or indirect benefits the franchisor receives when a franchisee obtains financing. Understanding these financial relationships is crucial for making an informed investment decision.