What must a Fitstop franchisee ensure regarding the franchisor's approval in any agreement to transfer the Franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.12 Conditions for our approval of transfer include, but are not limited to, the following: (1) you are in full compliance with this Agreement; (2) you pay us all amounts due; (3) transferee and its general managers satisfactorily complete our training program, (4) transferee executes our then-current form of Franchise Agreement; (5) the transfer fee is paid; (6) we approve any written agreements regarding transfer; (7) you supply any additional information we require; (8) you provide, as a personal covenant to the transferee, in addition to your covenants to us, an agreement not to seek to divert business from us and our franchisees; and (9) you sign a general release and other documents we require.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to the 2024 Fitstop Franchise Disclosure Document, a Fitstop franchisee must ensure that Fitstop approves any written agreements regarding the transfer of the franchise. This is one of several conditions Fitstop may impose for approving a transfer.
Other conditions for Fitstop's approval include ensuring the franchisee is in full compliance with the Franchise Agreement, all amounts due to Fitstop are paid, the transferee and its general managers satisfactorily complete Fitstop's training program, and the transferee executes Fitstop's then-current form of Franchise Agreement. Additionally, the transfer fee must be paid, the franchisee must supply any additional information Fitstop requires, and the franchisee must provide an agreement not to divert business from Fitstop and its franchisees. Finally, the franchisee must sign a general release and other documents Fitstop requires.
These conditions are typical in franchising, as franchisors want to ensure that any new franchisee meets their standards and is fully trained to maintain the brand's reputation. The requirement for a non-diversion agreement and a general release protects Fitstop from potential future legal issues or competitive threats from the outgoing franchisee. The Right of First Refusal allows Fitstop to purchase the franchise instead of allowing it to be transferred to a third party.