Can Fitstop modify the boundaries of a Designated Territory after the Franchise Agreement is executed?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
In certain situations where you have not secured an approved Premises at the time your Franchise Agreement is executed, we may determine to (i) designate a Designated Territory wherein you must locate and secure that Premises, and (ii) adjust the boundaries of the Designated Territory to a comparable geographical region that immediately surrounds the Premises, which we will provide to you in writing as part of our response to our site proposal so you can evaluate before securing the proposed site (if and as we determine appropriate). Otherwise, we may not modify the boundaries of your Designated Territory unless the parties mutually agree to the same in a separate agreement.
Approved Premises and Relocation
You must operate your Franchised Business from an approved Premises that you must secure within the Designated Territory granted to you at the time you execute your Franchise Agreement with us.
Once we agree upon and you secure your Premises, we will designate the same and, if applicable, any adjustment to the Designated Territory, in an amendment to the Franchise Agreement that you will be required to execute at or around the time you execute a lease for said Premises.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the boundaries of a franchisee's Designated Territory can be modified under specific circumstances after the Franchise Agreement is executed. Generally, Fitstop cannot unilaterally change the territory boundaries unless both parties agree to it in a separate agreement.
However, there is an exception. If a franchisee has not secured an approved Premises when the Franchise Agreement is signed, Fitstop may initially designate a territory where the franchisee must find a location. After a site is proposed, Fitstop can adjust the boundaries of the Designated Territory to a comparable geographical region surrounding the approved Premises. This adjustment will be provided in writing as part of Fitstop's site proposal response, allowing the franchisee to evaluate the revised territory before securing the site.
Once the Premises is agreed upon and secured, any adjustments to the Designated Territory will be formalized in an amendment to the Franchise Agreement, which the franchisee must execute when signing the lease for the Premises. This ensures that the territory aligns with the actual location of the Fitstop business. This process protects Fitstop by allowing them to adjust the territory to fit the approved location.
It is important for prospective Fitstop franchisees to understand these conditions regarding territory modifications, particularly the circumstances under which Fitstop can adjust the territory based on the approved Premises. Franchisees should carefully review the site proposal and any proposed territory adjustments before committing to a location.