What is the condition for the Fitstop Application Fee to be credited toward the Transfer Fee?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ansaction and any subsequent proposed sales or transfers by you. You shall provide us with written notice of any proposed transfer and shall comply with the provisions of the Right of First Refusal.
- 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.
- 15.8 Subject to our Right of First Refusal, you may transfer or assign any rights under this Agreement upon our written consent. We may condition transfer on such factors as:
- ©2024 Fitstop USA, Inc.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the $500 Application Fee will be credited toward the Transfer Fee if the transferee is approved. However, if the transferee is not approved, the application fee will be forfeited to cover Fitstop's expenses for processing the application. The Application Fee may be adjusted based on changes to the Consumer Price Index.
In the event of a transfer of the Franchise by an individual to a corporation where the individual remains the majority stockholder and is responsible for the full-time operation and supervision of the Franchise, and the transfer does not result in the cumulative transfer of over 50% of the original owner's interests, the Application Fee will be charged without the Transfer Fee. However, Fitstop requires the transferor to personally guarantee all obligations of the Franchise and reserves the right to reasonably reject such transfer.
It is important to note that Fitstop has the right to assign the Franchise Agreement. Franchisees are not allowed to assign or transfer any interest in the Franchise without Fitstop's written consent. Franchisees must notify Fitstop in writing of any proposed transfer terms, including the interest to be transferred, purchase price, financing terms, and the proposed transfer date. Fitstop then has 30 days to decide whether to have the interest assigned to them or a third party on the same terms as the proposed transferee.