Can Fitstop license others to use the Proprietary Marks and System for activities not expressly prohibited in the Fitstop Franchise Agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
Notwithstanding anything contained in this Agreement, we and/or our affiliates hereby reserve the exclusive right to: (i) establish and operate, and license any third party the right to establish and operate, other System Businesses using the Proprietary Marks at any location outside of the Designated Territory; (ii) market, offer and sell products and services that are similar to the products and services offered by the Franchised Business under a different trademark or trademarks at any location, within or outside the Designated Territory; (iii) use the Proprietary Marks and System, other such marks we may designate, to distribute the Approved Products in any alternative channel of distribution, within or outside the Designated Territory (including the Internet, mail order, catalog sales, toll-free numbers, wholesale stores, etc.); (iv) to acquire, merge with, or otherwise affiliate with, and after that own and operate, and franchise or license others to own and operate, any business of any kind, including, without limitation, any business that offers products or services the same as or similar to the Approved Products and/or Approved Services (but under different marks), within or outside the Designated Territory; (v) use the Proprietary Marks and System, and license others to use the Proprietary Marks and System, to engage in any other activities not expressly prohibited in this Agreement and; and (vi) own and operate, or license third parties the right to own or operate, a System Business from a premises that is located within a "Non-Traditional Venue" that is any captive venue or comparable location, including without limitation, academic institutions, military bases, hotels and/or other resorts, "big box" gyms, corporate office buildings and/or complexes, sports arenas and stadia, train stations, casinos and/or other comparable venues, both within or outside the Designated Territory.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop reserves the right to license others to use the Proprietary Marks and System for activities not expressly prohibited in the Franchise Agreement. This means that while franchisees operate their Fitstop businesses, Fitstop retains broad authority to explore new avenues for the brand.
This reservation of rights allows Fitstop to adapt to market changes and pursue opportunities that may not be immediately apparent when a franchise agreement is first signed. For a franchisee, this clause introduces an element of uncertainty. Fitstop could potentially authorize other businesses or individuals to use the Fitstop brand and system in ways that might indirectly compete with or otherwise affect the franchisee's business.
However, this clause also enables Fitstop to grow and evolve, potentially benefiting the entire franchise system. Franchisees should seek clarification from Fitstop regarding what activities are 'expressly prohibited' in the agreement to fully understand the scope of this reservation of rights and its potential impact on their investment.