Can a Fitstop franchisee offset payments to Fitstop against amounts Fitstop allegedly owes them?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 19.7 No Withholding of Payments.
You shall not withhold all or any part of any payment to us or any of our affiliates on the grounds of our alleged nonperformance or as an offset against any amount we or any of our affiliates allegedly may owe you under this Agreement or any related agreements.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee is not permitted to withhold payments to Fitstop based on alleged nonperformance by Fitstop or as an offset against any amount Fitstop allegedly owes the franchisee. This means that even if a Fitstop franchisee believes Fitstop has not fulfilled its obligations or owes them money, the franchisee must continue to make all required payments.
This provision protects Fitstop's revenue stream and ensures that franchisees cannot unilaterally decide to withhold payments due to disputes. Failure to comply with this requirement could result in penalties or legal action from Fitstop to recover the unpaid amounts.
This type of clause is relatively common in franchise agreements. It is important for prospective Fitstop franchisees to understand this obligation and have sufficient capital to meet their payment obligations to Fitstop, even if they have a dispute with the company. Franchisees should seek legal counsel to fully understand the implications of this clause and other provisions in the franchise agreement.