factual

Can the Brand Development Fund invest any surplus for future use for Fitstop?

Fitstop Franchise · 2024 FDD

Answer from 2024 FDD Document

Currently, any Fund Contributions are payable to us. We have the right to establish in the future a non-profit corporation or other business entity to collect Fund advertising contributions from our Franchisees. The Fund is administered by our accounting and marketing personnel under our direction. We may have the Fund borrow from us or other lenders to cover any Fund deficits. We may have the fund invest any surplus for the Fund's future use. You will be able to obtain an accounting annually upon written request to our President at our principal place of business 120 days after our latest fiscal year end. We claim no power to require that advertising cooperatives be formed, changed, dissolved or merged. (Franchise Agreement - Section 9.)

We will not be required to spend any of your Fund Contributions in the Designated Territory you are granted under your Franchise Agreement, and we will provide you with an unaudited accounting of the Fund within 120 days after our fiscal year end (upon your written request). We are not required to have the Fund audited, but we may do so and use the Fund Contributions to pay for such an audit. If we do not spend all Fund Contributions in a given year, any excess funds will rollover into the Fund for use during the following year. We will have the right to modify or discontinue the Fund (if established), as we deem appropriate in our sole discretion.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 24–35)

What This Means (2024 FDD)

According to Fitstop's 2024 Franchise Disclosure Document, the Brand Development Fund can invest any surplus for the Fund's future use. The FDD states that Fitstop has the right to establish a non-profit corporation or other business entity to collect Fund advertising contributions from franchisees. The Fund is managed by Fitstop's accounting and marketing personnel under their direction.

Fitstop may also have the Fund borrow from them or other lenders to cover any Fund deficits. Franchisees are able to obtain an accounting annually upon written request to Fitstop's President at their principal place of business 120 days after their latest fiscal year end.

If Fitstop does not spend all Fund Contributions in a given year, any excess funds will rollover into the Fund for use during the following year. Fitstop has the right to modify or discontinue the Fund (if established), as they deem appropriate in their sole discretion.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.