What is the Fitstop franchisee's obligation regarding not diverting members to a competitor?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
You may accept business and inquiries from prospective and existing members and customers (each, a "Member") via your Franchised Business, provided you: (i) only provide the Approved Services and Approved Products at and from the Premises, unless we agree otherwise in a separately-signed agreement; and (ii) do not market the Franchised Business or otherwise solicit any potential customers or members outside of your Designated Territory.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are restricted from marketing or soliciting customers outside of their designated territory. Specifically, Fitstop franchisees may accept business from prospective and existing members, but they must provide approved services and products only at and from their approved premises, unless Fitstop agrees otherwise in writing.
This means a Fitstop franchisee's marketing efforts must be confined to the geographical area designated in Schedule 2 of the Franchise Agreement. The franchisee cannot actively seek customers or members outside this territory. This restriction aims to protect the territorial rights of other franchisees and maintain the integrity of Fitstop's franchise system.
These territorial limitations are typical in franchising, designed to prevent cannibalization between franchise locations and ensure each franchisee has a defined market area to develop their business. A prospective Fitstop franchisee should carefully review Schedule 2 to understand the exact boundaries of their designated territory and the implications for their marketing strategy.