Is the Fitstop Franchise Disclosure Document effective in California as of the date of this document?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
sion, that the jurisdictional requirements of the Washington Franchise Investment Protection Act are met independently without reference to these Additional Disclosures. The Additional Disclosures shall have no force or effect if such jurisdictional requirements are not met.
EXHIBIT I: STATE EFFECTIVE DATES
STATE EFFECTIVE DATES
The following states have franchise laws that require that the Franchise Disclosure Document be registered or filed with the states, or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
This document is effective and may be used in the following states, where the document is filed, registered, or exempt from registration, as of the Effective Date stated below:
| State | Effective Date |
|---|---|
| California | Pending |
| Hawaii | Not Effective |
| Illinois | Not Effective |
| Indiana | Not Effective |
| Maryland | Not Effective |
| Michigan | Not Effective |
| Minnesota | Not Effective |
| New York | Not Effective |
| North Dakota | Not Effective |
| Rhode Island | Not Effective |
| South Dakota | Not Effec |
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to the 2024 Fitstop Franchise Disclosure Document, the document is effective and may be used in California, provided it is filed, registered, or exempt from registration. The FDD includes a state-specific addendum for California, which supplements Items 3, 5, and 17 of the disclosure document.
This addendum clarifies several aspects of California franchise law, including the requirement to provide a disclosure document approved by the Department of Financial Protection and Innovation before soliciting a material modification of the Franchise Agreement. It also states that California's Franchise Investment Law requires that a copy of all proposed agreements relating to the sale of the franchise be delivered together with the disclosure document.
Furthermore, the addendum addresses franchisee rights, stating that any provision requiring a franchisee to waive specific provisions of California law is void and unenforceable. It also notes that certain provisions in the Franchise Agreement, such as covenants not to compete extending beyond the termination of the agreement, may not be enforceable under California law. The Department of Financial Protection and Innovation has determined that Fitstop has not demonstrated adequate capitalization and/or must rely on franchise fees to fund its operations. The Commissioner has imposed a fee deferral condition, which requires that Fitstop defer the collection of all initial fees from California franchisees until Fitstop has completed all of its pre-opening obligations and the franchisee is open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.
Prospective Fitstop franchisees in California should carefully review the state-specific addendum and consult with legal counsel to understand their rights and obligations under California franchise law. They should also be aware of the fee deferral condition imposed by the Commissioner and its implications for their initial investment and operations.