How does Fitstop handle awarding the right to open and operate additional Franchised Businesses?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
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Additional Disclosures
Your Franchise Agreement does not provide you with any right or option to open and operate any additional Franchised Businesses. As previously discussed, each Franchised Business you are awarded the right to open and operate must be governed by its own specific form of Franchise Agreement unless we agree to add that subsequent franchise to your existing agreement via a form of addendum. We have not established other franchised or company-owned outlets or another distribution channel for offering or selling products/services that are similar to the Approved Products and Approved Services under a different trademark. Neither we nor our affiliates have established, or presently intend to establish, other franchised or company-owned businesses that sell our Approved Products and Approved Services under a different trade name or trademark, but we reserve the right to do so in the future without your consent.
ITEM 13: TRADEMARKS
We grant you a limited, non-exclusive license to use our then-current Proprietary Marks (or "Marks") we designate to identify your Franchised Business, such as our current primary mark FITSTOP® and certain other Marks we authorize at this time provided you use these Marks as outlined in your Franchise Agreement(s) and our Manuals.
As of the Issue Date our affiliate, Fitstop IP Pty. Ltd. (the "TM Owner"), owns the following marks that are registered on the Principal Register of the United States Patent and Trademark Office ("USPTO"):
| Mark | Registration No.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a Franchise Agreement does not provide any right or option to open and operate additional Franchised Businesses. Each Fitstop franchise awarded requires its own specific Franchise Agreement, unless Fitstop agrees to add a subsequent franchise to an existing agreement through an addendum. This means that franchisees looking to expand and operate multiple Fitstop locations must negotiate and secure a new agreement for each location, adding complexity to multi-unit ownership.
Fitstop retains significant rights regarding the establishment of other businesses, including the right to establish and operate other franchised businesses outside a franchisee's designated territory. They can also market and sell similar products and services under different trademarks, even within a franchisee's territory. Fitstop also reserves the right to distribute approved products and services through alternative channels, such as the internet or wholesale stores, without compensating the franchisee.
Fitstop emphasizes that franchisees do not have a right of first refusal, option, or any other rights to acquire additional franchises. This means that even if a franchisee has performed well and is interested in expanding, Fitstop is not obligated to offer them the opportunity to open additional locations. This contrasts with some franchise systems that offer existing franchisees the first opportunity to expand within a specific area.
Prospective Fitstop franchisees should be aware that securing additional locations is not guaranteed and will depend on Fitstop's approval and willingness to enter into a new agreement. This lack of guaranteed expansion rights could impact a franchisee's long-term growth strategy and potential return on investment. It is important to discuss Fitstop's criteria for awarding additional franchises and their long-term expansion plans during the due diligence process.