Must a Designated Manager for a Fitstop franchise sign a Confidentiality and Non-Competition Agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
If you are not willing to be the full-time operator of your business, then you will be required to engage a manager and have them complete our training program (the "Designated Manager"). The Designated Manager is not required to hold an equity interest in the franchisee entity.
Any and all Designated Manager(s) must sign our then-current prescribed form of Confidentiality and Non-Competition Agreement. If and when a Designated Manager leaves his/her/their employment at your Franchised Business, you must recruit a new Designated Manager within thirty (30) days and submit the replacement's qualifications to us for our review and approval (which may be conditioned on completion of certain "Management Criteria") before substituting a new Designated Manager at any of your locations (unless you resume taking over the day-to-day operations of the Franchised Business on a full-time basis).
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 40–41)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee chooses to hire a Designated Manager, that manager must sign a Confidentiality and Non-Competition Agreement. This agreement is in a form prescribed by Fitstop and is the then-current version at the time of signing.
This requirement ensures that the Designated Manager is legally bound to protect Fitstop's confidential information and refrain from competing with the franchise, both during and after their employment. If a Designated Manager leaves their position, the franchisee has thirty days to recruit a new Designated Manager. The franchisee must then submit the replacement's qualifications to Fitstop for review and approval before the new manager can be instated, unless the franchisee resumes full-time management of the business.
This policy is fairly standard in franchising, as franchisors typically want to protect their business methods and customer relationships. The 30-day window to replace a Designated Manager is something a franchisee should be aware of, as any longer period of time without a trained, approved manager could potentially impact the operations and profitability of the Fitstop location. Franchisees should clarify with Fitstop what the 'Management Criteria' are for Designated Manager approval.