Is a Fitstop franchisee required to acquire 'Required Items' from designated 'Approved Suppliers'?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
nd expense except as this Agreement otherwise permits herein.
Section 12: Required Items, Approved Suppliers and Related Obligations
- 12.1 Required Items. Unless we agree otherwise in a separately-signed writing, you must acquire and/or license and/or lease: (i) the furniture, fixtures, equipment, supplies, inventory, Required Software and services we designate in the Manuals or otherwise in writing to (a) build-out and otherwise establish the Franchised Business at the Premises, and (b) operate that Franchised Business on an ongoing basis (collectively, the "Required Items"), in accordance with our then-current System standards and specifications; and (ii) such Required Items from the Approved Supplier, if any, we designate in our Manuals or otherwise in writing.
- 12.2 Ongoing Obligations. To ensure you may service members, you must purchase and maintain in accordance with the specifications set forth in the Manual(s)s such additional supplies and equipment necessary. We may make changes in these standards and specifications. The changes may require you to purchase equipment, supplies, furnishings or other products. You must promptly use the modified standards and specifications at your own expense and as specified in this Agreement within 180 days of the date we provide notice of a formal roll-out with respect to all similarly-situated System franchisees.
- 12.3 Right to Designate and Update List of Approved Supplier(s). We may, but are under no obligation, appoint oursevles and/or our affiliates or any other third party as an Apporved Supplier for one (1) or more Required Items associated with the Franchised Business upon prior written notice via the Manuals or otherwise.
12.4 Approved Services and Approved Products
12.4.1 Approved Products. The Manual(s) will set forth a list of the Approved Products we authorize for offer and retail sale at the Franchised Business.You must and may only use or sell the specific Approved Products at all times at and from the Premises, and must not discontinue or fail to use or offer any Approved Product unless (a) we agree otherwise in writing, or (b) you provide us with prior written notice that such Approved Product is not authorized for sale under applicable law(s) where the Franchised Business is located.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are generally required to acquire 'Required Items' from 'Approved Suppliers' designated by Fitstop. These 'Required Items' encompass furniture, fixtures, equipment, supplies, inventory, required software, and services necessary to build out and operate the franchised business, as specified in Fitstop's manuals or in writing.
The FDD states that Fitstop has the right to appoint themselves, their affiliates, or any third party as an approved supplier for one or more required items, providing prior written notice in the manuals or otherwise. This allows Fitstop to control the supply chain and potentially profit from it through rebates or other financial incentives from suppliers, which they are entitled to retain.
However, franchisees have the option to propose alternative suppliers, but Fitstop reserves the right to check the quality of the items and disapprove them if unsuitable. Fitstop also states that they will use their best efforts to ensure that either they or a designated supplier will at all times have a supply of approved products for sale to the franchisee. This system ensures that Fitstop franchisees maintain consistent standards and quality, while also providing Fitstop with some control over sourcing and potential revenue streams.