How can the month-to-month extension of the Fitstop agreement be terminated by the Franchisor?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 14.5 If you continue to operate the Franchise without our express written consent following the expiration of the Term of this Agreement, then such operations shall be considered and legally characterized as only a month-by-month extension of this Agreement based on your position as a non-authorized holdover franchisee, which may be terminated by Franchisor at any time upon 30 days' prior written notice.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee continues to operate the franchise after the expiration of the original term without express written consent from Fitstop, the agreement automatically converts to a month-to-month extension. This holdover arrangement does not grant the franchisee any long-term rights.
Fitstop retains the right to terminate this month-to-month extension at any time. To do so, Fitstop must provide the franchisee with 30 days' prior written notice of termination. This means the franchisee has 30 days from the date of the notice to cease operations and vacate the premises, unless otherwise agreed upon.
This clause protects Fitstop by ensuring that franchisees cannot continue operating indefinitely without a formal renewal or agreement. It also allows Fitstop to remove underperforming or non-compliant franchisees relatively quickly compared to waiting for the full term of a renewed agreement. For a prospective franchisee, this highlights the importance of adhering to the terms of the franchise agreement and securing renewal terms in a timely manner to avoid the uncertainty of a month-to-month extension.