Must a Fitstop franchisee provide written notice of any proposed transfer to Fitstop?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ou, or if agreed upon between the parties, the subsequent franchisee must pay the Assignment/Transfer Fee ("Transfer Fee") of $25,000.00 before or at the time of transfer or assignment to a new franchisee.
- 15.3 You shall notify us in writing of the terms and conditions of any proposed transfer, including, but not limited to the interest proposed to be transferred, the purchase price or other consideration to be received therefore, any credit or financing terms being extended by the seller, the date of the proposed transfer, and all other pertinent provisions of the proposed transfer. In addition, a copy of any and all contracts, agreements, memoranda of sale, deposit receipts, letters of intent, side letter agreements and/or the like, must also be forwarded to us as soon as signed by the proposed seller. Following receipt of all pertinent data and documents concerning the proposed transfer, including any additional information concerning the transaction requested by us to you, we have 30 calendar days within which to advise you in writing of our election to have the interest proposed to be transferred assigned to us, or to a third party we may designate so long as it guarantees payments due to the selling entity, on the terms and conditions agreed to by the prospective transferee ("Right of First Refusal").
- 15.4 If we elect to exercise, or to assign under payment guarantee, the Right of First Refusal, the Parties shall act expeditiously to complete the transfer, provided that the date for the completion of the transfer can be extended at our option for up to an additional 30 calendar days.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee must provide written notice of any proposed transfer. This notification must include all terms and conditions of the proposed transfer, such as the interest being transferred, the purchase price, any financing terms, the proposed transfer date, and all other relevant provisions.
In addition to the written notice, the franchisee must also provide Fitstop with copies of all contracts, agreements, memoranda of sale, deposit receipts, letters of intent, and side letter agreements as soon as they are signed by the proposed seller. After receiving all necessary data and documents, including any additional information requested by Fitstop, Fitstop has 30 calendar days to decide whether to exercise its Right of First Refusal. This right allows Fitstop to have the interest assigned to them or to a third party they designate, provided that payments to the selling entity are guaranteed, based on the terms agreed to by the prospective transferee.
If Fitstop chooses to exercise its Right of First Refusal, or to assign it under payment guarantee, both parties must work quickly to complete the transfer. Fitstop has the option to extend the completion date by up to 30 calendar days. Furthermore, the FDD states that a franchisee must pay an Assignment/Transfer Application Fee of $500.00 to Fitstop per application to assign or transfer. Upon approval, the franchisee must pay an Assignment/Transfer Fee of $25,000.00 before or at the time of transfer or assignment to a new franchisee.