Can Fitstop locate System Businesses within Non-Traditional Venues located with your Designated Territory?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We also reserve the right to open and operate and/or license others the right to operate a System Business under the Proprietary Marks from a captive venue or other non-traditional location, including by way of example, academic institutions, military bases, "big box" gyms, hotels and/or airports (each, a "Non-Traditional Venue").
Your Franchise Agreement does not grant you any right to (a) engage in any of the activities outlined in the preceding paragraph, or (b) share in any of the proceeds received by us, our affiliates or any third party from these activities, unless we otherwise agree in writing. We have no obligation to provide you with any compensation for soliciting or accepting orders inside your territory.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop retains the right to operate or license others to operate a System Business under its Proprietary Marks from non-traditional locations, even within a franchisee's designated territory. These non-traditional venues include, for example, academic institutions, military bases, "big box" gyms, hotels, and airports. This means that while a franchisee is granted a designated territory, Fitstop can still establish a Fitstop location in these types of venues within that territory.
This reservation of rights has significant implications for prospective Fitstop franchisees. It means that the franchisee's territory is not entirely exclusive, and they may face competition from a Fitstop location in a non-traditional venue within their designated area. This could impact the franchisee's potential customer base and revenue. It is important to note that the Franchise Agreement does not grant the franchisee any right to share in the proceeds received by Fitstop or any third party from these activities, nor does Fitstop have any obligation to compensate the franchisee for soliciting or accepting orders inside their territory.
This type of reserved right is not uncommon in franchising. Franchisors often retain the flexibility to explore alternative distribution channels or locations to maximize brand exposure and market penetration. However, it is crucial for prospective franchisees to understand the extent of these reserved rights and how they might affect their business. Franchisees should carefully consider the potential impact of non-traditional venues on their business plan and financial projections.
Therefore, a prospective Fitstop franchisee should carefully evaluate the potential impact of these non-traditional venues on their business and discuss any concerns with Fitstop before signing the Franchise Agreement. Understanding the potential for competition from these sources is essential for making an informed investment decision.