What is the consequence if a Fitstop franchisee is in default of the agreement when requesting renewal?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
terms herein.
- 14.2 Not less than six (6) months or more than 12 months prior to the expiration of the Term, you must notify us in writing of your intention to renew this Agreement for the Renewal Term.
- 14.3 Provided you deliver to us the required notice and provided that you are not in default of this Agreement, we may provide you with the option to renew the Franchise for for up to two (2) consecutive, five (5) year terms (each, a "Renewal Term").
- 14.4 As a condition of and at the time of any renewal, you must do the following:
- 14.4.1 Execute our then current Franchise Agreement, which may differ substantially from this Agreement under which you have operated, and any other ancillary agreements and documents as we may require;
- 14.4.2 Execute a general release, in a form prescribed by us, of any and all claims against us, our subsidiaries, and our and their respective officers, directors, agents, and employees in their corporate and individual capacities including, without limitation, claims arising under this Agreement and any federal, state, and local laws, rules, and ordinances;
- 14.4.3 Pay us a renewal fee of $20,000 prior to or upon execution of the appropriate renewal form(s) of agreement and/or addendum we, at our option, have the right to require as a precondition to any renewal of t
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee is in default of the Franchise Agreement, they will not be able to renew their franchise. Specifically, Section 14.3 states that renewal is contingent on the franchisee not being in default of the agreement.
To renew their Fitstop franchise, a franchisee must provide the required notice of intent to renew within a specified timeframe, which is not less than six months or more than 12 months prior to the expiration of the current term. Additionally, Section 14.4.4 states that the franchisee must cure any and all defaults, including any monetary defaults, that exist as of the date the franchisee requests renewal and the date of renewal.
As a condition of renewal, the franchisee must execute Fitstop's then-current Franchise Agreement, which may differ substantially from the original agreement. They must also execute a general release of all claims against Fitstop and its affiliates, pay a renewal fee of $20,000, and cure any existing defaults. Failure to meet these conditions, including resolving any defaults, will prevent the franchisee from renewing their Fitstop franchise.