Can Fitstop condition approval of a Fitstop site on the lease containing specific provisions?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ou securing the right to occupy and use such Premises for purposes of developing and operating the Franchised Business.
- 9.3.2 You must ensure that the lease for the Premises (the "Lease") contains and integrates the provisions and covenants set forth in this Section or that we designate in the Manuals at any time prior to you securing any Premises (the "Prescribed Lease Provisions"), with said Lease subject to our review and approval with respect to any markup or negotiated changes to said provisions as part of our overall right to approve the Premises itself.
- 9.3.3 You must perform and observe at all times the terms (including conditions and covenants) of any lease or other agreement affording you access to and use of the Premises.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop can indeed condition its approval of a potential site for a Franchised Business on the inclusion of specific provisions in the lease.
Fitstop requires franchisees to ensure that the lease for their chosen premises contains and integrates specific provisions and covenants, referred to as "Prescribed Lease Provisions," which Fitstop designates in its manuals. The lease is subject to Fitstop's review and approval, especially regarding any changes made to these provisions. This ensures that Fitstop maintains control over the terms of the lease and can protect its interests.
Fitstop may also require franchisees to negotiate with the landlord to include a collateral assignment of lease in favor of Fitstop, particularly in the event of termination of the Franchise Agreement or the lease itself. Fitstop can condition its approval of a site on the lease containing these provisions or similar language that grants Fitstop the rights detailed in the Prescribed Lease Provisions. This gives Fitstop the ability to step in and take over the lease if the franchisee defaults or the agreement is terminated, which is a common practice in franchising to protect the brand and ensure business continuity.