Are Fitstop marketing and promotional activities allowed to be misleading?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.4.1 You must market and promote the Franchised Business at your cost, including using your best endeavors to actively promote the Franchise and in particular must regularly canvass members and potential members and follow up any leads you receive or that we may provide. You must not arrange, authorize, or carry out any advertising in relation to the Franchise unless we approve the form and content of the advertising in writing or it is in conformance with the Manual(s). You shall ensure that all marketing and promotional activities conform to the standards of ethical marketing and the policies prescribed by us and are not in any way misleading or deceptive.
- 6.4.2 You must expend the minimum amount equal to 1% of the Gross Revenue generated by the Franchised Business during the preceding calendar month of operations to market, promote and advertise the Franchised Business within the Designated Territory (the "Local Marketing Requirement" or "LMR"). We may require that all or some portion of your LMR be expended on services/collateral that you must acquire from one (1) or more of our then-current Approved Suppliers. Upon our request, you must provide us with invoices or other proof of your monthly expenditures on local advertising and marketing. You must ensure that: (i) the Franchised Business has a dedicated phone line for use in connection with the Franchised Business only (and no other business, including any other System Business); and (ii) the Franchised Business is listed in the appropriate Internet-based directories that we designate in the Manual(s) or otherwise.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are explicitly prohibited from engaging in misleading or deceptive marketing practices. The FDD states that all marketing and promotional activities must adhere to ethical standards and the policies prescribed by Fitstop.
Specifically, franchisees must secure approval from Fitstop for the form and content of any advertising they undertake, unless it conforms to the guidelines provided in the Manual(s). This requirement ensures that all marketing efforts align with Fitstop's brand standards and legal requirements. Franchisees are also expected to actively promote the Fitstop franchise, canvass potential members, and follow up on leads, all while adhering to these marketing guidelines.
Furthermore, Fitstop mandates that franchisees spend a minimum of 1% of their gross revenue on local marketing efforts within their designated territory. This Local Marketing Requirement (LMR) ensures consistent brand visibility and promotion. However, these expenditures must still comply with Fitstop's standards for ethical and non-misleading advertising. Fitstop retains the right to specify that these LMR funds be spent with approved suppliers, further controlling the quality and consistency of marketing materials.