What document must all of the Fitstop Franchise's owners, shareholders, members, managers, partners, officers, and directors execute?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
You identify in Schedule 1 to this Agreement the identity of and other necessary information related to your Principals. You certify and warrant that all of the Franchise's owners, shareholders, members, managers, partners, officers, and directors listed in Schedule 1, will execute the Guaranty attached as Schedule 3 to this Agreement, and will execute such other documents as necessary.
- 10.2 If you are a business entity, then you must: (i) identify each individual or other entity that owns or holds any ownership interest in the Franchisee in Schedule 1 (each, a "Franchise Owner" or "Principal"); and (ii) ensure each Franchise Owner executes the form of Personal Guarantee attached to this Agreement as Schedule 3 (the "Personal Guaranty" or "Guaranty").
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, all of the franchise's owners, shareholders, members, managers, partners, officers, and directors listed in Schedule 1 of the Franchise Agreement must execute the Guaranty attached as Schedule 3 to the agreement, as well as any other documents deemed necessary. This requirement is in place to ensure that all individuals with a significant stake in the Fitstop franchise are personally committed to upholding the obligations and responsibilities outlined in the Franchise Agreement.
This requirement is further reinforced if the franchisee is a business entity. In such cases, Fitstop requires that each individual or entity owning an interest in the franchisee must execute the Personal Guaranty attached as Schedule 3. This ensures that Fitstop has recourse to the personal assets of the owners should the franchise fail to meet its financial or contractual obligations.
This stipulation is a fairly standard practice in franchising, as it provides an added layer of security for the franchisor. By requiring personal guarantees from all key stakeholders, Fitstop aims to mitigate the risk of franchisee non-compliance and protect the integrity of the Fitstop brand. Prospective franchisees should carefully review Schedule 3 and understand the full extent of their personal liability before signing the Franchise Agreement.