Is Fitstop liable to franchisees for money or benefits received from online sales?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.12 Conduct and Promotion of Franchised Business Online. We may conduct business and advertise for business on the internet.
We may offer for sale products and services via the internet and we are not liable to you for any money or benefits received by us or any person or entity related or affiliated with us in connection with the sales.
You must cooperate with us in our conduct of business on the internet including by: (1) advertising the domain name specified by us on the shopfront of the Premises, other locations in the Premises, and on all of Franchisee letterheads, business cards, invoices, statements and carry bags; (2) accepting gift vouchers, returns and exchanges from members who have made purchases of products and services via the internet or from another franchisee in the network; and (3) fulfilling orders for products from members who have placed orders via the internet or from another franchisee in the network.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop is not liable to franchisees for any money or benefits it receives from online sales. Specifically, Fitstop may conduct business and advertise online, including offering products and services for sale via the internet. The FDD clearly states that Fitstop is not obligated to share any revenue or benefits derived from these online sales with its franchisees.
This arrangement has significant implications for prospective Fitstop franchisees. While franchisees are required to cooperate with Fitstop's online business activities—such as advertising the Fitstop domain name, accepting online gift vouchers, and fulfilling online orders—they will not directly benefit from the revenue generated through these online channels. This could potentially create a situation where franchisees are contributing to the success of Fitstop's online sales without receiving a corresponding share of the profits.
It is important for potential Fitstop franchisees to fully understand this aspect of the franchise agreement. They should consider the potential impact of Fitstop's online sales on their own business and evaluate whether the benefits of the franchise opportunity outweigh the lack of direct compensation from online revenue. Franchisees should also consider the degree to which they will be expected to support online sales through accepting returns/exchanges and fulfilling orders.
Prospective franchisees may want to discuss with Fitstop the specific strategies for online sales, the projected impact on individual franchise revenues, and the mechanisms in place to ensure fair distribution of benefits between Fitstop and its franchisees. Understanding these details is crucial for making an informed decision about investing in a Fitstop franchise.