What happens to the Fitstop Application Fee if the transferee is approved?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ansaction and any subsequent proposed sales or transfers by you. You shall provide us with written notice of any proposed transfer and shall comply with the provisions of the Right of First Refusal.
- 15.7 Included with your notice of proposed transfer, unless exempted, shall be your nonrefundable Application Fee of $500 payable to us. The Application Fee will be credited toward the Transfer Fee, as defined above, if the transferee is approved but will otherwise be forfeited to defray our expenses in connec
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the Application Fee related to a franchise transfer has specific implications if the transferee is approved. The standard Application Fee is $500, payable to Fitstop when notifying them of a proposed transfer. If the transferee is approved, this $500 Application Fee is credited toward the Transfer Fee. However, if the transferee is not approved, Fitstop retains the Application Fee to cover expenses related to processing the application.
This policy means that while a potential transferee must pay an upfront fee to be considered, that fee is not an additional cost if the transfer is approved. Instead, it functions as a deposit towards the larger Transfer Fee. This is a benefit to the transferee, as it reduces the overall upfront cost of the transfer.
It's important to note that the Application Fee is nonrefundable if the transferee is not approved. Additionally, the Application Fee is subject to upward adjustment based on changes in the Consumer Price Index from the agreement date to the transfer date. This means the actual fee could be higher at the time of transfer, depending on inflation. Franchisees should factor this potential increase into their financial planning when considering a transfer.