If a Fitstop franchisee collects on a delinquent member account, what are they responsible for paying?

According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee collects money from a delinquent member account, they are responsible for paying Fitstop any unpaid royalties, management fees, note payments, and other payments due on the amounts collected.

This means that when a Fitstop franchisee successfully recovers funds from a member who has fallen behind on their payments, the franchisee must first allocate a portion of those recovered funds to cover any outstanding financial obligations they have to Fitstop. These obligations can include royalties, which are typically a percentage of gross revenue, as well as management fees and any outstanding loan or note payments the franchisee owes to Fitstop.

This policy ensures that Fitstop receives its share of revenue from member accounts, even when those accounts require collection efforts. It also incentivizes franchisees to actively pursue collections, as they can only retain the remaining funds after settling their debts with Fitstop. Franchisees should maintain detailed records of all collections and payments to ensure accurate accounting and compliance with the franchise agreement.