What is the consequence if a Fitstop franchisee does not include the Application Fee with the notice of proposed transfer?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
f First Refusal, or after the expiration of the time allowed for such election, a new Right of First Refusal commences as to the concerned transaction and any subsequent proposed sales or transfers by you. You shall provide us with written notice of any proposed transfer
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee is required to include a nonrefundable $500 Application Fee with the notice of proposed transfer. This fee is payable to Fitstop. The FDD does not explicitly state the consequences of failing to include the Application Fee with the notice of proposed transfer. However, it does state that the franchisee must comply with the provisions of the Right of First Refusal. It also states that conditions for approval of transfer include that the franchisee pay all amounts due. Therefore, it can be inferred that failure to include the application fee with the notice of proposed transfer would be a failure to comply with the provisions and a failure to pay all amounts due.
In general franchise practice, failure to comply with the requirements for transfer can result in the franchisor withholding consent for the transfer. This means the franchisee would not be able to sell their franchise to the proposed buyer.
Therefore, a prospective Fitstop franchisee should clarify with Fitstop what the specific consequences are for failing to include the Application Fee with the notice of proposed transfer. This will help avoid any potential delays or complications during the transfer process.