If a Fitstop franchisee admits inability to pay debts, is this grounds for immediate termination of the franchise agreement by Fitstop?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
aw(s), as applicable, subsequently engage in the same noncompliance whether or not such noncompliance is corrected after notice.
- 16.1.9 If you hack or crack or attempt to hack or crack our computer software.
- 16.2 Termination Upon Notice and Failure to Cure. In addition to the grounds for immediate termination set forth above, we can terminate this Agreement for the following violations if the violation is not cured within 30 calendar days after we submit to you at the address indicated in the Franchise Summary a notice of violation:
- 16.2.1 If you fail to pay any fees or other amounts due to us, our affiliates or any Approved Supplier we designate within the time periods specified for such payments by this Agreement, or the agreement specifying the payment concerned, or in any event after receiving written notice that such fees or other amounts are overdue.
- 16.2.2 If you violate any material term of this Agreement or any other agreement between the Parties including, but not limited to, the Manual(s), lease agreement, or licensing agreement.
- 16.2.3 If you under report Gross Revenue, your gross billings or sales in any amount in any calendar quarter or year.
- 16.2.4 If you attempt or purport to transfer or assign all or any part of this Agreement, the Franchise, or any material portion of the real or personal property associated with either, except as provided in this Agreement, or attempt or purport to sub-franchise to a third person or entity, or otherwise to allow an unauthorized third person or entity to use any of the rights, proprietary property, and/or assets franchised or licensed to you hereunder, or any portion of the real and/or personal property used by you in connection herewith.
- 16.2.5 If you for any reason lose or have suspended any license necessary to run the Franchise.
- 16.2.6 If you enter a contract with or take payment directly from a member without our approval.
- 16.2.7 If you fail to submit required financial information or make false statements about your financial condition.
- 16.2.8 If you fail to pay all taxes and employee related withholdings relating to the operation of your franchise.
- 16.2.9 If you fail to keep your business entity active and in good standing.
- 16.2.10 If you misuse or undertake any unauthorized use of our Proprietary Marks.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, admitting an inability to pay debts is not explicitly listed as grounds for immediate termination. However, Fitstop can terminate the agreement if a franchisee fails to pay fees or other amounts due to Fitstop, its affiliates, or any approved supplier, within the specified time periods. If the franchisee violates any material term of the agreement, including the manuals, lease agreement, or licensing agreement, Fitstop can terminate the agreement if the violation is not cured within 30 calendar days after Fitstop submits a notice of violation.
If a franchisee fails to pay all taxes and employee-related withholdings relating to the operation of their franchise or fails to keep their business entity active and in good standing, Fitstop can terminate the agreement if the violation is not cured within 30 calendar days after Fitstop submits a notice of violation.
If a franchisee defaults on the agreement but the default does not result in immediate termination, the franchisee has 30 calendar days after receiving notice from Fitstop to correct the default. If the default cannot be reasonably cured within 30 calendar days, Fitstop may agree to provide additional time, provided that corrective action begins promptly within the initial 30-day period and is pursued diligently to completion. If the default is not cured after notice and within the allowed time, termination of the agreement will occur without further notice.