Must a Fitstop franchisee use the Approved Supplier for merchant processing services?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
13.8 Other Amounts Payable to Third-Party Approved Supplier(s) and/or Otherwise in Connection with the Franchised Business. You must ensure that timely payment is made with respect to all amounts due and owing to: (i) any designated or other Approved Supplier for Required Items (products or services) that we designate in our Manuals or otherwise in writing, including our then-current Approved Supplier for merchant processing services, consistent with the applicable Approved Supplier's invoicing, terms and conditions; and (ii) any other third-party landlord, supplier, provider or other vendor that has been used or engaged by you in connection with the establishment and/or ongoing operation of the Franchised Business.
13.9 Related Acknowledgements. The parties acknowledge and agree that (i) all payments made by members in respect of Approved Products and/or Approved Services which you provide to members from your Franchise must be processed through our online ordering system via our website or our application; (ii) we may, in our reasonable discretion, allocate discounted or free memberships to members who work at our headquarters, other team members, corporate partners, athletes and ambassadors and sponsors of our brand; (iii) there is no exclusivity of members and members may openly choose to deal with any franchisee, regardless of the member's location; (iv) subject to the below, all payments received by us from members who pay for Approved Products and/or services which you provide from your Franchise through our online ordering system via our website or the application are accepted by us for and on your behalf unless advised otherwise by us in writing at any time during the Term; and (v) all amounts from the sale of the Approved Products and/or services which you provide from your Franchise that we receive from members through our online ordering system via our website or the application are set up to be paid by a third party vendor to you on the third calendar day of each month less:
13.9.1 any merchant fees that we incur upon receipt of the payments referred to within this clause;
13.9.2 any merchant fees that we incur when transferring such payments to you; and
13.9.3 any amount payable by you to us under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees must use the brand's approved supplier for merchant processing services. Specifically, franchisees are required to ensure timely payment to any designated Approved Supplier for Required Items, including the current Approved Supplier for merchant processing services. This requirement is detailed in the manuals or other written communication from Fitstop.
Furthermore, all payments made by members for Approved Products or Services from the franchisee's location must be processed through Fitstop's online ordering system via their website or application. Fitstop may also allocate discounted or free memberships to individuals like headquarters staff, team members, corporate partners, athletes, and sponsors. Members can choose to deal with any franchisee, regardless of location.
Fitstop receives payments from members through its online system on behalf of the franchisee, and these amounts are then paid to the franchisee by a third-party vendor on the third calendar day of each month. However, Fitstop deducts merchant fees incurred upon receipt of payments, merchant fees incurred when transferring payments to the franchisee, and any amounts payable by the franchisee to Fitstop under the Franchise Agreement. This system ensures that Fitstop maintains control over the financial transactions and can deduct necessary fees before remitting the balance to the franchisee.