If the Fitstop franchisee is a business entity, what must be identified in Schedule 1?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.1 You identify in Schedule 1 to this Agreement the identity of and other necessary information related to your Principals. You certify and warrant that all of the Franchise's owners, shareholders, members, managers, partners, officers, and directors listed in Schedule 1, will execute the Guaranty attached as Schedule 3 to this Agreement, and will execute such other documents as necessary.
- 10.2 If you are a business entity, then you must: (i) identify each individual or other entity that owns or holds any ownership interest in the Franchisee in Schedule 1 (each, a "Franchise Owner" or "Principal"); and (ii) ensure each Franchise Owner executes the form of Personal Guarantee attached to this Agreement as Schedule 3 (the "Personal Guaranty" or "Guaranty").
- 10.3 The individual you identify in Schedule 1 as the "Franchise Operator" shall have authority to speak for and bind you in all matters pertaining to the operation of the Franchise.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if the franchisee is a business entity, Schedule 1 to the Franchise Agreement must identify each individual or other entity that owns or holds any ownership interest in the franchisee. These individuals or entities are referred to as "Franchise Owners" or "Principals".
This requirement ensures that Fitstop knows who the actual owners are behind the business entity operating the franchise. This is a common practice in franchising, as franchisors typically want to assess the qualifications and backgrounds of all individuals with a significant stake in the franchise.
Furthermore, each Franchise Owner must execute a Personal Guarantee, which is attached to the Franchise Agreement as Schedule 3. This Personal Guaranty ensures that the individuals with ownership in the franchisee are personally liable for the franchisee's obligations under the Franchise Agreement. The individual identified in Schedule 1 as the "Franchise Operator" has the authority to speak for and bind the franchisee in all matters pertaining to the operation of the Fitstop franchise.