Can Fitstop determine a shorter period for which the transferor remains liable?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
You and each transferor shall continue to remain personally liable for all affirmative obligations, covenants, and agreements contained herein for the full term of this Franchise or for such shorter period as we may, in our sole discretion, determine.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a transferor's liability can be shortened at Fitstop's discretion. Specifically, when a Fitstop franchise is transferred, both the transferor and the new transferee are generally liable for all obligations under the franchise agreement for the full term.
However, Fitstop retains the right to determine a shorter period for which the transferor remains liable. This means that Fitstop has the flexibility to release the transferor from some or all of their obligations sooner than the original franchise term.
For a prospective Fitstop franchisee, this clause offers a potential benefit. If they decide to sell their franchise in the future, Fitstop might agree to shorten the period for which they remain liable, thus reducing their long-term risk. However, this is not guaranteed and is entirely at Fitstop's discretion, so the franchisee should not rely on it.