How long does an estate have to sell a Fitstop franchise if the beneficiary is not approved?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.13 If we do not approve a potential transferee who proposes to take this Franchise as a beneficiary under your will or by intestate succession, your estate may sell the Franchise to a third party transferee who is acceptable to us, provided that the sale and transfer take place within 180 calendar days after the appointment of the executor, administrator, or other personal representative of you, and subject to the terms of transfer herein, including our first right of refusal, which shall apply.
If an approved transfer of this Agreement is not completed within said 180 calendar days, we have the right to terminate this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if Fitstop does not approve a potential transferee who is set to inherit the franchise as a beneficiary, the deceased franchisee's estate has 180 calendar days to sell the franchise to a third party that Fitstop approves. This 180-day period begins after the appointment of the executor, administrator, or other personal representative of the deceased franchisee.
This timeframe is crucial for the estate to manage the franchise's transfer efficiently. The sale is subject to the standard transfer terms outlined in the Franchise Agreement, including Fitstop's right of first refusal, meaning Fitstop has the first option to purchase the franchise. If the estate fails to complete an approved transfer within the 180-day window, Fitstop retains the right to terminate the Franchise Agreement, which would result in the estate losing the value of the franchise.
This provision protects Fitstop by ensuring that the franchise continues to be operated by a qualified and approved franchisee, even in the event of the original franchisee's death. It also provides a defined timeline for the estate to resolve the matter, balancing the interests of both parties. Prospective franchisees should understand this clause as part of their estate planning, considering who would be suitable and approved to take over the franchise to avoid potential complications and loss of the business.