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What are the consequences if a Fitstop franchisee fails to make timely payments for merchant processing services to the Approved Supplier?

Fitstop Franchise · 2024 FDD

Answer from 2024 FDD Document

Fee, Local Marketing Requirement and/or other marketing/advertising and/or promotional expenditures, to the extent such amounts are payable to us and/or any of our Approved Suppliers.

  • 13.8 Other Amounts Payable to Third-Party Approved Supplier(s) and/or Otherwise in Connection with the Franchised Business. You must ensure that timely payment is made with respect to all amounts due and owing to: (i) any designated or other Approved Supplier for Required Items (products or services) that we designate in our Manuals or otherwise in writing, including our then-current Approved Supplier for merchant processing services, consistent with the applicable Approved Supplier's invoicing, terms and conditions; and (ii) any other third-party landlord, supplier, provider or other vendor that has been used or engaged by you in connection with the establishment and/or ongoing operation of the Franchised Business.
  • 13.9 Related Acknowledgements. The parties acknowledge and agree that (i) all payments made by members in respect of Approved Products and/or Approved Services which you provide to members from your Franchise must be processed through our online ordering system via our website or our application; (ii) we may, in our reasonable discretion, allocate discounted or free memberships to members who work at our headquarters, other team members, corporate partners, athletes and ambassadors and sponsors of our brand; (iii) there is no exclusivity of members and members may openly choose to deal with any franchisee, regardless of the member's location;

Source: Item 23 — RECEIPTS (FDD pages 50–135)

What This Means (2024 FDD)

According to Fitstop's 2024 Franchise Disclosure Document, franchisees must make timely payments to approved suppliers for required items, including merchant processing services. Failure to do so can lead to termination of the franchise agreement if the franchisee does not cure the violation within 30 calendar days after receiving notice from Fitstop.

Specifically, Fitstop can terminate the Franchise Agreement if a franchisee fails to pay any fees or other amounts due to Fitstop, its affiliates, or any designated Approved Supplier within the specified time periods. This includes failing to pay after receiving written notice that such fees or other amounts are overdue. The franchisee has 30 calendar days after receiving a notice of violation to correct the default.

If the franchisee does not correct the payment default within the 30-day cure period, the termination of the Franchise Agreement will occur without further notice. This means the franchisee will lose the right to operate their Fitstop business. This underscores the importance of maintaining good financial standing and adhering to the payment terms outlined in the Franchise Agreement and any agreements with approved suppliers.

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.