What is the initial step a Fitstop franchisee must take when considering a franchise transfer?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.3 You shall notify us in writing of the terms and conditions of any proposed transfer, including, but not limited to the interest proposed to be transferred, the purchase price or other consideration to be received therefore, any credit or financing terms being extended by the seller, the date of the proposed transfer, and all other pertinent provisions of the proposed transfer.
In addition, a copy of any and all contracts, agreements, memoranda of sale, deposit receipts, letters of intent, side letter agreements and/or the like, must also be forwarded to us as soon as signed by the proposed seller.
Following receipt of all pertinent data and documents concerning the proposed transfer, including any additional information concerning the transaction requested by us to you, we have 30 calendar days within which to advise you in writing of our election to have the interest proposed to be transferred assigned to us, or to a third party we may designate so long as it guarantees payments due to the selling entity, on the terms and conditions agreed to by the prospective transferee ("Right of First Refusal").
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee considering a transfer of their franchise must first notify Fitstop in writing. This notification must include all terms and conditions of the proposed transfer. Specifically, the franchisee must disclose the interest proposed to be transferred, the purchase price or other consideration, any credit or financing terms, the proposed transfer date, and all other relevant provisions.
In addition to the written notice, the Fitstop franchisee must also provide copies of all contracts, agreements, memoranda of sale, deposit receipts, letters of intent, side letter agreements, and similar documents as soon as they are signed by the proposed seller. This comprehensive disclosure allows Fitstop to fully evaluate the proposed transfer.
After Fitstop receives all the necessary data and documents, including any additional information they request, Fitstop has 30 calendar days to decide whether to exercise its Right of First Refusal. This right allows Fitstop to have the interest assigned to themselves or a third party they designate, provided they guarantee payments to the selling entity, on the same terms and conditions agreed to by the prospective transferee. This process ensures that Fitstop maintains control over who enters their franchise system and under what terms.