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What are the conditions under which the Fitstop franchisor can require the franchisee to implement new technologies or software systems, and what are the financial implications for the franchisee?

Fitstop Franchise · 2024 FDD

Answer from 2024 FDD Document

and use them for our own benefit or disseminate them for use by other franchisees.

  • 6.8 Telephone and Communications Systems. You must, if requested in writing by us at any time during the Term, at your cost: (1) install and use in the Franchise telephone and other communications systems (including point of sale hardware and software) specified by us for the operation of the Franchise; (2) change or upgrade any telephone and communications systems used in the Franchise which we consider obsolete or superseded, including installation of new telephone and communication systems specified by us; and (3) ensure that all telephone and communications systems are secure from unauthorized access or use. You: must (1) pay on time all charges payable to any telecommunications service provider or to any other person in connection with the use of these systems; and (2) change, substitute, or discontinue the use of any communications number when requested by us. We can require you, at any time and for any reason, to execute a transfer of any communications number to be held by us.
  • ©2024 Fitstop USA, Inc. 6.9 Computer System; Required Software. You must at your cost: (1) install and use in the Franchise computer hardware and software which satisfies the functionality and specification requirements specified by us; (2) acquire and maintain software licenses in respect to all Required Software, whether covered by the Technology Fee or otherwise; and (3) change or upgrade any computer hardware or software used in the Franchise which we reasonably consider is obsolete or superseded, including installation of new computer hardware or software which satisfies the then current functionality and specification requirements specified by us. For the purposes of this Section, we may, at any time during the Term, require you to purchase computer hardware or license software specified by us directly from us or, subject to law, certain

suppliers which we may approve. You must allow us to have access to your computer hardware and software and to all information that is stored in it including by any instantaneous means of telecommunication or internet protocol, unless prohibited by state or federal law. If we introduce a pointof-sale system, you must install the point-of-sale system approved by us that meets our performance standards. You must permit us or our duly authorized agents at all times, and from time to time, to copy any information contained in your point-of-sale system to a computer system operated by us, our nominee, or agents. You must ensure that connectivity is maintained and available at all times to allow all data generated by the point-of-sale system to be captured by us. If for any reason copying is not possible, then without in any way limiting the obligations herein, we may require you to download the information required by us into machine readable information compatible with the system operated by us.

  • 6.10 Right to Audit and/or Inspect. In addition, we reserve the right to audit your financial information quarterly upon reasonable demand and require that you provide to us on or before April 15 of each year a copy of the Franchise's financial statements, including profit and loss statements, that are reasonably requested by us.
  • 6.11 Required Software (including CMS) and Use of Approved Supplier for Billing/Collection and Point of Sale (POS) Software and/or Services. You must at your cost: (1) acquire and install the software necessary to access the CMS, as well as any other cloud-based or other software program, we require you license and/or use in connection with your Franchised Business (collectively, the "Required Software"); (2) pay all fees and costs to our then-current Approved Supplier, for such Required Software; (3) acquire and install all other software required to operate the Franchise as directed by us; and (4) acquire and use computer hardware and other electronic equipment as set forth in the Manual(s) or otherwise in writing, whether prior to opening or thereafter (the "Computer System");

What This Means (2024 FDD)

According to Fitstop's 2024 Franchise Disclosure Document, Fitstop can request in writing that franchisees install and use specific telephone and other communication systems, including point-of-sale hardware and software. Fitstop can also require franchisees to change or upgrade these systems if they are considered obsolete or superseded, including installing new systems. Franchisees are responsible for ensuring these systems are secure and for paying all associated charges. Fitstop can also require franchisees to transfer any communications number to them at any time and for any reason.

Fitstop also requires franchisees to install and use computer hardware and software that meets their specified functionality and specification requirements. Franchisees must acquire and maintain software licenses for all required software, whether or not it's covered by the Technology Fee. Fitstop can also require franchisees to upgrade computer hardware or software they reasonably consider obsolete or superseded, including installing new hardware or software. These upgrades are at the franchisee's cost.

The FDD states that pre-opening costs for the required computer hardware range from $3,000 to $7,000. Access to current Required Software is included in the Technology Fee, which is 2% of Gross Revenue. Fitstop may require updates and upgrades to the Computer System and/or Required Software, providing reasonable advance notice (typically 60 or more days). Franchisees may spend an average of $500 to $1,500 per year on annual updates and maintenance to the Computer System hardware, including non-material upgrades. Franchisees must also pay the Approved Supplier directly for licensing and other fees associated with Required Software not covered by the Technology Fee.

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.