What information must a Fitstop franchisee provide to Fitstop when proposing a transfer?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
irst Refusal, the Parties shall act expeditiously to complete the transfer, provided that the date for the completion of the transfer can be extended at our option for up to an additional 30 calendar days.
- 15.5 If there are any material changes in the terms and conditions of the proposed transfer after we notify you of our election not to exercise our Right of First Refusal, or after the expiration of the time period within 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 connection with processing the application. The Application Fee is subject to upward adjustment by any change in the Consumer Price Index specified in this Agreement between its date and the date of the transfer.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee must provide written notice of any proposed transfer. Included with this notice, unless exempted, must be a nonrefundable Application Fee of $500, payable to Fitstop. This fee will be credited toward the Transfer Fee if the transferee is approved, but will otherwise be forfeited to cover Fitstop's expenses in processing the application. The Application Fee is subject to upward adjustment based on changes in the Consumer Price Index.
Fitstop may also condition the transfer based on its satisfaction that the proposed transferee meets the necessary character, business experience, credit rating, financial strength, and other requirements. This suggests that franchisees may need to provide detailed information about the potential transferee's background and qualifications as part of the transfer application.
Additionally, if there are any material changes in the terms and conditions of the proposed transfer after Fitstop notifies the franchisee of its election not to exercise its Right of First Refusal, the franchisee must notify Fitstop of these changes in writing. Fitstop then has an additional 10 calendar days to elect to exercise its Right of First Refusal. This ensures Fitstop has the opportunity to reassess the transfer based on any new terms.
In summary, a Fitstop franchisee looking to transfer their franchise must provide written notice, pay a $500 application fee (potentially adjusted for inflation), and be prepared to supply comprehensive information about the proposed transferee's qualifications. They must also keep Fitstop informed of any changes to the transfer terms, all of which are standard practices in franchising to protect the brand and ensure the continued success of the franchise system.