Does the Fitstop franchisor have to approve written agreements regarding the transfer?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.12 Conditions for our approval of transfer include, but are not limited to, the following: (1) you are in full compliance with this Agreement; (2) you pay us all amounts due; (3) transferee and its general managers satisfactorily complete our training program, (4) transferee executes our then-current form of Franchise Agreement; (5) the transfer fee is paid; (6) we approve any written agreements regarding transfer; (7) you supply any additional information we require; (8) you provide, as a personal covenant to the transferee, in addition to your covenants to us, an agreement not to seek to divert business from us and our franchisees; and (9) you sign a general release and other documents we require.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop's approval of written agreements regarding the transfer of a franchise is required. Specifically, one of the conditions for Fitstop's approval of a transfer includes that Fitstop approves any written agreements regarding the transfer.
This requirement means that if a franchisee plans to transfer their Fitstop franchise to a new owner, any written agreements made between the franchisee and the potential new owner are subject to Fitstop's approval. This gives Fitstop control over the terms of the transfer agreement, ensuring they align with the brand's standards and interests.
For a prospective Fitstop franchisee, this condition highlights the importance of involving Fitstop early in any transfer negotiations. The franchisee needs to ensure that any agreements are structured in a way that is likely to be approved by Fitstop. Failure to obtain Fitstop's approval on these agreements could delay or even prevent the transfer from proceeding.