What conditions must be met for the Application Fee to be charged without additional fees when transferring a Fitstop franchise to a corporation?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.15 If the transfer is an assignment of the Franchise by an individual to a corporation in which you are and, so long as they remain the majority stockholder and the officer responsible for the full-time personal operation and supervision of the Franchise, and the transfer does not result in the cumulative transfer of over 50% of the interest or interests of the original owner or owners, the Application Fee will be charged without the Transfer Fee.
However, we require that the transferor, or transferors and each of them, personally guarantee all obligations of the Franchise and reserve the right to reasonably reject such transfer.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, an Application Fee, but not a Transfer Fee, will be charged when transferring a franchise from an individual to a corporation under specific conditions.
Specifically, the individual must remain the majority stockholder and the officer responsible for the full-time personal operation and supervision of the Fitstop franchise. Additionally, the transfer must not result in the cumulative transfer of over 50% of the original owner's interest.
Even if these conditions are met, Fitstop requires the transferor(s) to personally guarantee all obligations of the franchise and reserves the right to reasonably reject the transfer. This means that while the franchisee may avoid the full Transfer Fee, they still face scrutiny and must maintain a significant role and financial responsibility in the franchise's operation.