Does the Fitstop Franchise Agreement grant franchisees any right to share in any of the proceeds received by Fitstop from activities outlined in the preceding paragraph?

According to Fitstop's 2024 Franchise Disclosure Document, the Franchise Agreement does not grant franchisees the right to share in any proceeds from activities outlined in the reserved rights paragraph, unless otherwise agreed to in writing by Fitstop. This means that Fitstop retains significant control over various business activities and revenue streams, without any obligation to share the proceeds with its franchisees.

The reserved rights include the right for Fitstop to establish and operate other franchised businesses outside the franchisee's designated territory, market similar products under different trademarks, and distribute approved products through alternative channels, such as the internet or wholesale stores, both within and outside the designated territory. Fitstop also reserves the right to engage in transactions like mergers or acquisitions with other businesses, including competitors, and to operate System Businesses in Non-Traditional Venues such as academic institutions or military bases.

This arrangement means that a Fitstop franchisee's revenue is primarily limited to the sales generated directly from their approved premises. The franchisee has no inherent right to benefit financially from Fitstop's other business ventures, even if those ventures operate within or impact the franchisee's designated territory. A franchisee should seek clarification and potentially negotiate specific terms regarding revenue sharing or compensation for activities that may affect their business. It is fairly common in franchising for the franchisor to retain rights to alternative distribution channels and non-traditional venues, but the financial implications for franchisees can vary significantly depending on the specific terms of the agreement.