What happens if a proposed Fitstop franchise transfer is not completed within 90 days?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
n which we can elect to exercise our right, you shall notify us of the changes in writing and we shall then have an additional 10 calendar days within which to elect to exercise our Right of First Refusal.
- 15.6 If the proposed transfer is not completed for any reason within 90 calendar days after we elect not to exercise or assign our Right of First Refusal, or after the expiration of the time allowed for such election, a new Right of First Refusal commences as to the concerned transaction 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, if a proposed franchise transfer is not completed within 90 calendar days after Fitstop elects not to exercise their Right of First Refusal, or after the expiration of the time allowed for such election, a new Right of First Refusal commences. This applies to the transaction in question and any subsequent proposed sales or transfers by the franchisee.
In simpler terms, if you, as a Fitstop franchisee, try to sell your franchise, Fitstop has the first right to buy it themselves or designate a third party to buy it. If Fitstop decides not to exercise this right, you have 90 days to complete the transfer to your chosen buyer. If the sale falls through after those 90 days, Fitstop's Right of First Refusal is reinstated, meaning they get another chance to approve or reject any future proposed buyers.
This clause is important for prospective Fitstop franchisees because it means that the transfer process must be handled efficiently. Delays could give Fitstop additional opportunities to intervene in the sale. The franchisee also has to provide written notice to Fitstop of any proposed transfer and comply with the Right of First Refusal, including paying a nonrefundable application fee of $500. This fee will be credited toward the Transfer Fee if the transferee is approved.