If a Fitstop franchisee fails to locate an appropriate premises within the specified timeframe, what are the options available to the franchisor?
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 franchise agreement's effective date. During this period, the franchisee must diligently inspect potential locations, provide weekly updates to Fitstop, consider any premises suggested by Fitstop, and, if deemed necessary by Fitstop, engage 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, providing more time to find an appropriate location.
The decision to terminate the agreement or grant an extension rests solely with Fitstop. This clause protects Fitstop by ensuring franchisees actively pursue suitable locations and prevents delays in establishing the franchise. For a prospective franchisee, this highlights the importance of thorough preparation and proactive engagement in the site selection process to avoid potential termination of the agreement.