When is the initial franchise fee considered fully earned by Fitstop?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
chise Fee
You must pay us an initial franchise fee amounting to $50,000 (the "Initial Franchise Fee"), which is due in a lump sum immediately upon execution of your Franchise Agreement. The Initial Franchise Fee is deemed fully earned upon execution of your Franchise Agreement, and is not refundable under any circumstances.
In the event you wish to develop multiple Franchised Businesses, then you may be offered and awarded the right to open and operate such businesses by either (a) entering into a separate form of our then-current franchise agreement for each such location, or (b) indicating that a single form of franchise agreement will govern more than one (1) Franchised Business in a form of exhibit or addendum to your initial Franchise Agreement at the time it is executed. The Initial Franchise Fee shall be due in connection with each Franchised Business you are awarded to develop, unless we agree otherwise in writing, and all other disclosures above will apply to such
Source: Item 5 — INITIAL FEES (FDD pages 10–11)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the initial franchise fee of $50,000 is considered fully earned upon the execution of the Franchise Agreement. This fee is payable in a lump sum when the agreement is signed.
This means that once the Franchise Agreement is executed, Fitstop has earned the initial franchise fee and is under no obligation to refund it, regardless of whether the franchisee ever opens a Fitstop location. This is a standard practice in franchising, as the initial fee compensates the franchisor for the initial services and expenses incurred in evaluating and setting up the new franchisee.
For prospective Fitstop franchisees, this implies a significant financial commitment upfront. It is crucial to conduct thorough due diligence and secure appropriate financing before signing the Franchise Agreement, as the $50,000 initial fee is non-refundable. If a franchisee wishes to develop multiple Fitstop locations, the initial franchise fee is due for each location unless Fitstop agrees otherwise in writing.