Are Fitstop franchisees required to obtain music licensing services from approved suppliers?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
As of the Issue Date, we expect and intend to have Approved Suppliers for the following items you must purchase in connection with your Franchised Business as of the Issue Date of this Disclosure Document: (i) certain furniture, fixtures, equipment and supplies you must purchase to buildout and/or operate your Franchised Business; (ii) site selection and other real estate services (recommended, but not necessarily required); (iii) software and technology we designate for use in connection with the System; (iv) signage furniture, fixtures, equipment, supplies and inventory comprising the Start-Up Equipment and Supplies
Package (detailed more fully in Item 8); (v) other inventory items and paper goods; (vi) branded items and retail merchandise, including certain Approved Products; (vii) certain marketing materials and services, which may include digital marketing and collateral such as flyers, coupons, banners, flags and similar promotional items; (viii) music licensing services (for use at your Premises); and (ix) project management and related services associated with the buildout and design of your Franchised Business (optional, not required).
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–23)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are expected to use approved suppliers for music licensing services. Fitstop retains the right to mandate that franchisees acquire specific items or services from approved or designated suppliers, which may include Fitstop itself or its affiliates.
As of the FDD's issue date, Fitstop anticipates having approved suppliers for several items franchisees need to purchase. These include furniture, fixtures, equipment, and supplies for the business's buildout and operation; software and technology designated for use within the Fitstop system; signage, furniture, fixtures, equipment, supplies, and inventory within the Start-Up Equipment and Supplies Package; other inventory items and paper goods; branded items and retail merchandise; certain marketing materials and services; and music licensing services for use at the premises.
While Fitstop outlines the intention to have approved suppliers for music licensing, franchisees do have the option to seek approval for alternative suppliers. However, this requires written approval from Fitstop and may involve paying an evaluation fee, potentially costing the franchisee the greater of the expenses Fitstop incurs in evaluating the proposal or $1,000 per proposal. Fitstop may also inspect the proposed supplier's facilities and test its products, with the franchisee responsible for reimbursing the associated costs. Ultimately, Fitstop reserves the right to revoke approval of a supplier at any time to protect the brand's interests.