What must a Fitstop franchisee do with telephone numbers and domain names associated with the Franchised Business upon termination or nonrenewal?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| h. "Cause" defined—non-curable defaults | Section 16.1 | Non-curable defaults include being convicted of, pleading guilty or no contest to, or receiving deferred adjudication for a felony, crime of moral turpitude, or certain other crimes; attempts to hack or crack our computer software; disclosure of confidential information; abandonment; unauthorized transfer; material misrepresentations when you purchase the franchise; repeated failure to comply with Franchise Agreement or Manual requirements, even if corrected; or if you are declared insolvent or bankrupt. |
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| i. Franchisee's obligations on termination/nonrenewal | Section 16 | You must: (i) immediately cease use of all our Proprietary Marks, Confidential Information, trade secrets, and all aspects of the Franchise System; (ii) immediately return to us all advertising materials, products, or writing that contain, bear or otherwise use and of the Marks and IP, as well as all materials containing Confidential Information; (iii) pay all outstanding amounts due and owing to us under the Franchise Agreement; (iv) assign all telephone numbers and domain names associated with the Franchised Business to us (at our option) or otherwise cancel any registration for the same; (v) afford us (directly or via an operating affiliate) the right to (a) assume the lease for your Approved Premises, and/or (b) acquire all other operating assets associated with the Franchised Business at net depreciated book value, as detailed more fully in your Franchise Agreement; and (vi) comply with all confidentiality, non-disclosure and other post-term restrictive covenants detailed more fully below in this Item 17 Chart. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–47)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, upon termination or nonrenewal of the franchise agreement, a franchisee has specific obligations regarding telephone numbers and domain names associated with the business. The franchisee must assign all telephone numbers and domain names associated with the Franchised Business to Fitstop, if Fitstop chooses. Otherwise, the franchisee must cancel any registration for the telephone numbers and domain names.
This requirement ensures that Fitstop maintains control over its brand identity and customer communications even after a franchise agreement ends. By either acquiring the telephone numbers and domain names or ensuring their cancellation, Fitstop prevents former franchisees from potentially misrepresenting themselves as part of the Fitstop network or diverting customers.
This is a fairly standard practice in franchising. It is crucial for prospective Fitstop franchisees to understand these obligations, as failure to comply could result in legal repercussions or further financial penalties. Franchisees should factor in these post-termination requirements when evaluating the overall costs and responsibilities associated with the Fitstop franchise.