What constitutes a material portion of interest in the Fitstop Agreement that triggers the execution of a general release?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ant a sub-franchise under this Agreement nor seek to franchise, license, or permit others to use this Franchise or any of the rights, assets, or property derived by or licensed to you under this Agreement.
- 15.17 If a court of competent jurisdiction as a part of a divorce, dissolution, legal separation, or other proceeding, orders you to transfer to your spouse all or any part of your interest in this Agreement and/or in a material portion of the real and/or personal property used in connection with the Franchise, such an order will constitute a transfer of this Agreement and will cause the transferee amd transferor to be subject to all terms concerning transfers set forth above. However, if both spouses are franchisees under this Agreement, such a transfer will not be subject to the transfer requirements herein, unless the spouse to whom this Agreement or the concerned property is being transferred is not actively engaged in the operation of the Franchise, in which case we can declare that the transfer is subject to all transfer terms of this Agreement and may exercise our right of first refusal.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a transfer of interest in the Fitstop Agreement occurs when a court orders you to transfer to your spouse all or any part of your interest in the Agreement and/or in a material portion of the real and/or personal property used in connection with the Franchise due to divorce, dissolution, legal separation, or other proceeding. This order will constitute a transfer of the Fitstop Agreement, subjecting both the transferor and transferee to all terms concerning transfers outlined in the agreement.
However, if both spouses are already franchisees under the Fitstop Agreement, such a transfer will not be subject to the transfer requirements, unless the spouse receiving the Agreement or property is not actively engaged in the operation of the Franchise. In such a case, Fitstop can declare that the transfer is subject to all transfer terms of the Agreement and may exercise its right of first refusal.
Upon each assignment or other transfer of the Fitstop Franchise, the prevailing fees (i.e., Royalty Fee, Marketing Fee, Technology Fee, Annual Convention Fee, etc.) owing to Fitstop after the date of such assignment or transfer will be automatically adjusted to the then-prevailing percentage required for new franchises issued by Fitstop at the time of such assignment or transfer. This means that a franchisee's fees could change upon transfer to match the rates for new franchisees at that time.