Can Fitstop change the method of gross revenue collection?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
You shall execute and deliver to us such documents and instruments as may be necessary to establish and maintain said automatic debit/credit transfer program, including all information and/or materials (i.e., voided check) necessary for us to identify and enroll your account in the EFT Program (your "Designated EFT Account").
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
Based on the 2024 Fitstop Franchise Disclosure Document, franchisees are required to participate in an automatic debit/credit transfer program for payments. Franchisees must provide the necessary documentation to enroll their account in the Electronic Funds Transfer (EFT) program. This ensures that Fitstop can automatically collect royalties and other fees directly from the franchisee's designated bank account.
The FDD specifies that franchisees must execute documents to maintain this automatic debit/credit transfer program. This requirement allows Fitstop to have a consistent and reliable method for receiving payments, reducing the risk of late or missed payments from franchisees. The franchisor's ability to mandate and maintain this system is crucial for managing cash flow and ensuring financial stability for the brand.
While the FDD states that franchisees must participate in the automatic debit/credit transfer program, it does not explicitly state whether Fitstop can unilaterally change the method of gross revenue collection. However, Fitstop maintains the right to specify telephone and communication systems, as well as computer systems and required software. A prospective franchisee should clarify with Fitstop whether they have the right to change the method of gross revenue collection.