What happens if a Fitstop franchisee fails to locate an appropriate premises within the specified timeframe?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee is generally required to secure an approved premises within six months of the agreement's effective date. The franchisee must diligently search for a location, reporting weekly to Fitstop on potential sites, considering Fitstop's suggestions, and potentially engaging an approved agent to assist in the search.
If the franchisee fails to secure an appropriate premises within the initial six-month timeframe, Fitstop has the discretion to take one of two actions. Fitstop may choose to terminate the franchise agreement, effectively ending the relationship. Alternatively, Fitstop may agree to extend the period the franchisee has to locate a suitable premises, giving them more time to find a location that meets Fitstop's approval.
This clause highlights the importance of securing a location promptly. The franchisee bears the risk of potential termination if they cannot find a suitable site within the initial timeframe, underscoring the need for thorough preparation and proactive engagement in the site selection process. Franchisees should clarify with Fitstop what criteria are used to determine whether to terminate the agreement or grant an extension, and under what conditions an extension might be granted.