factual

What are the Fitstop franchisee's responsibilities when locating a premises within the Designated Territory?

Fitstop Franchise · 2024 FDD

Answer from 2024 FDD Document

9.1 Obligation to Secure an Approved Premises

  • 9.1.1 Unless we have already agreed upon a location for the Premises at the time we execute this Agreement, you must use your best efforts to locate and enter into a lease agreement for a Premises within the Designated Territory that we approve within six (6) months of the Effective Date. As part of that process, it is your responsibility to: (i) inspect prospective premises; (ii) report back to us on a weekly basis with details of the prospective premises inspected in the prior seven (7) calendar days; (iii) consider any potential premises we may suggest; and (iv) if we deem necessary, engage an agent we approve to assist you in locating an appropriate premises within the Designated Territory.
  • 9.1.2 If you have not located an appropriate premises by the time specified above, we may in our discretion (i) agree to terminate this Agreement or (ii) agree to extend the time you have to locate an appropriate premises.

9.2 Approval of Approved Premises.

  • 9.2.1 You irrevocably authorize us and our legal practitioners to access the premises.
  • 9.2.2 We accept no responsibility for the suitability of the Premises for the conduct of the Franchise.

  • 9.2.3 If the Premises is not at the date of this Agreement already in use as one of our franchises, then you must not conduct the Franchised Business from the Premises until: (1) we have confirmed in writing that the Premises has been erected or converted and improved with equipment and furnishings to our reasonable specification; and (2) you have obtained all consents necessary for the conduct of the Franchised Business from the Premises.
  • 9.2.4 You must not relocate or substantially change the size or layout of the Premises without our prior written approval.

9.3 Lease of Premises.

  • 9.3.1 You are solely responsible for locating, proposing and securing a lease for the Premises we approve in writing prior to you securing the right to occupy and use such Premises for purposes of developing and operating the Franchised Business.
  • 9.3.2 You must ensure that the lease for the Premises (the "Lease") contains and integrates the provisions and covenants set forth in this Section or that we designate in the Manuals at any time prior to you securing any Premises (the "Prescribed Lease Provisions"), with said Lease subject to our review and approval with respect to any markup or negotiated changes to said provisions as part of our overall right to approve the Premises itself.
  • 9.3.3 You must perform and observe at all times the terms (including conditions and covenants) of any lease or other agreement affording you access to and use of the Premises.
  • 9.3.4 You will be liable to pay all amounts owing in connection with the Lease and Premises governed thereby, and your failure to cure any defaults you have with respect to Tenant's (or its guarantors) monetary or non-monetary obligations under the Lease within the applicable cure periods set forth therein shall constitute a material default and, if the Lease is terminated or subject to termination, grounds for immediate termination of this Agreement by us upon written notice to you.
  • 9.3.5 Where you have entered into a lease in respect of the Premises: (1) we may at any time during the Term notify you in writing that we require you to assign the lease of the Premises to us or our nominee; and (2) you must within seven (7) calendar days of such request assign the lease of the Premises to us or our nominee and sign all documents and take all necessary steps to effect the assignment of the lease of the Premises.

Source: Item 23 — RECEIPTS (FDD pages 50–135)

What This Means (2024 FDD)

According to Fitstop's 2024 Franchise Disclosure Document, franchisees have several key responsibilities when securing a location for their franchise. Unless a location has already been agreed upon, the franchisee must use their best efforts to find and lease a premises within their designated territory that Fitstop approves within six months of the agreement's effective date. This involves inspecting potential locations, providing weekly updates to Fitstop about the premises inspected, considering any locations Fitstop suggests, and engaging an approved agent if Fitstop deems it necessary.

Fitstop franchisees are solely responsible for finding, proposing, and securing a lease for a premises that Fitstop approves in writing before the franchisee can occupy and use it. The lease must include specific provisions and covenants, known as the Prescribed Lease Provisions, which Fitstop can designate in its manuals. These lease terms are subject to Fitstop's review and approval, especially regarding any changes negotiated by the franchisee. Franchisees must also adhere to all terms of the lease and are responsible for paying all associated amounts. Failure to meet these obligations or cure any defaults under the lease can lead to the termination of the franchise agreement.

Fitstop retains significant control over the premises. The franchisee must allow Fitstop and its legal representatives to access the premises. Fitstop does not take responsibility for the suitability of the premises for the franchise. The franchisee cannot conduct business from the premises until Fitstop confirms in writing that the premises has been properly erected, converted, and equipped according to Fitstop's specifications, and until all necessary consents for operating the business have been obtained. Additionally, franchisees cannot relocate or substantially alter the size or layout of the premises without Fitstop's prior written approval. Fitstop also has the right to require the franchisee to assign the lease to Fitstop or its nominee under certain conditions.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.