What efforts must I make to integrate the Prescribed Lease Provisions into the Fitstop lease?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
9.3 Lease of Premises.
- 9.3.1 You are solely responsible for locating, proposing and securing a lease for the Premises we approve in writing prior to you securing the right to occupy and use such Premises for purposes of developing and operating the Franchised Business.
- 9.3.2 You must ensure that the lease for the Premises (the "Lease") contains and integrates the provisions and covenants set forth in this Section or that we designate in the Manuals at any time prior to you securing any Premises (the "Prescribed Lease Provisions"), with said Lease subject to our review and approval with respect to any markup or negotiated changes to said provisions as part of our overall right to approve the Premises itself.
- 9.3.3 You must perform and observe at all times the terms (including conditions and covenants) of any lease or other agreement affording you access to and use of the Premises.
- 9.3.4 You will be liable to pay all amounts owing in connection with the Lease and Premises governed thereby, and your failure to cure any defaults you have with respect to Tenant's (or its guarantors) monetary or non-monetary obligations under the Lease within the applicable cure periods set forth therein shall constitute a material default and, if the Lease is terminated or subject to termination, grounds for immediate termination of this Agreement by us upon written notice to you.
- 9.3.5 Where you have entered into a lease in respect of the Premises: (1) we may at any time during the Term notify you in writing that we require you to assign the lease of the Premises to us or our nominee; and (2) you must within seven (7) calendar days of such request assign the lease of the Premises to us or our nominee and sign all documents and take all necessary steps to effect the assignment of the lease of the Premises.
- 9.4 Prescribed Lease Terms. You must use your best efforts to negotiate with the landlord that owns or controls the Premises to integrate the Prescribed Lease Provisions, including a collateral assignment of lease in favor of us in the event this Agreement or the Lease is subject to termination, as specifically set forth in our then-current Manual(s). We may condition our approval or consent to any site you propose as a potential Premises for your Franchised Business on the Lease containing such provisions or substantially similar language affording us the rights detailed in our Prescribed Lease Provisions at the time of such proposal.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, as a franchisee, you are responsible for securing a lease for your Fitstop location. You must ensure this lease contains and integrates the provisions and covenants that Fitstop designates in its manuals, referred to as the "Prescribed Lease Provisions." The lease is subject to Fitstop's review and approval, especially regarding any changes made to these provisions. This approval is part of Fitstop's overall right to approve the premises itself.
To meet these requirements, you must use your best efforts to negotiate with the landlord to include the Prescribed Lease Provisions, including a collateral assignment of the lease in favor of Fitstop in case the Franchise Agreement or the lease is terminated. Fitstop may make its approval of your proposed site conditional on the lease containing these provisions or similar language that gives Fitstop the rights detailed in the Prescribed Lease Provisions.
Essentially, Fitstop wants to ensure it has certain protections and rights related to the leased premises. This could include the ability to take over the lease if you default or if the franchise agreement is terminated. As a franchisee, you need to be proactive in negotiating these terms with the landlord and be prepared to have Fitstop involved in the lease approval process. This requirement is fairly common in franchising, as it allows the franchisor to protect their brand and ensure continuity of the business even if an individual franchisee faces difficulties.