What happens if a Fitstop franchisee doesn't use Approved Suppliers for Required Items?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
General Note. The estimated investment ranges were prepared based upon and accounting for: (i) various sources of information, including (a) the experience of our affiliates developing two (2) System Businesses (each, an "Affiliate Business") over the past 18 months, (b) the experience of our Affiliate Franchisor and its System franchisees that have Franchised Businesses operating or under development in Australia, (c) information we have received from our current third-party Approved Suppliers for certain investment items or categories above, (d) information and data that we have received from various real estate brokers and/or other sources for information with respect to current real estate and commercial leasing markets, and (e) various other due diligence; and (ii) a number of expectations and reasonable assumptions that we make as part of our standard franchise offering, such as franchisee (a) securing an approved Premises and opening the Franchised Business within the prescribed timelines set forth in your Franchise Agreement (and on or before the Rent Commencement Date under the lease for the Premises), and (b) ensuring that the Premises is built out in accordance with our current System standards, specifications and processes, and (c) using our Approved Suppliers for certain Required Items as set forth in the Chart above and in Item 8 of this Disclosure Document below.
Source: Item 7 — TEM 7: ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Fitstop expects franchisees to use Approved Suppliers for certain Required Items. The FDD notes that the estimated investment ranges are prepared accounting for the franchisee using Approved Suppliers for certain Required Items. This expectation is part of Fitstop's standard franchise offering.
While the FDD states the expectation of using approved suppliers, it does not explicitly detail the consequences of not using them. However, it is implied that not adhering to this requirement could impact the franchisee's ability to meet System standards and specifications, particularly in building out the Premises. This could potentially lead to non-compliance issues with the Franchise Agreement.
Prospective Fitstop franchisees should seek clarification from the franchisor regarding the specific repercussions of failing to use Approved Suppliers. Understanding the potential consequences, such as potential breaches of contract or failure to meet brand standards, is crucial for making an informed investment decision. It would also be prudent to understand if there are any exceptions or waivers that can be obtained regarding the Approved Supplier requirement.