Does Fitstop have an obligation to purchase the operating assets of a terminated Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.6 Option to Purchase Operating Assets of Franchised Business. Upon termination of this Agreement, we have the option but not obligation to purchase from you any merchandise on hand or on order by you, and those items of equipment or other tangible items used in the operation of the Franchised Business as may be indicated by us.
The purchase price for such items will be equal to their net depreciated book value, without any allowance for your going business value or goodwill.
The terms of any purchase will be negotiated at the time of the sale, but must include typical representations and warranties by you with respect to all the rights and other assets being assigned free and clear of all liens and encumbrances.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop does not have an obligation to purchase the operating assets of a terminated franchise. However, Fitstop does have the option to purchase certain assets.
Specifically, Fitstop has the option, but not the obligation, to purchase from the franchisee any merchandise on hand or on order, as well as equipment or other tangible items used in the operation of the franchised business. The decision to purchase these items lies solely with Fitstop.
If Fitstop chooses to exercise its option to purchase these assets, the purchase price will be equal to their net depreciated book value. This valuation excludes any allowance for the franchisee's going business value or goodwill. The specific terms of the purchase, including representations and warranties, will be negotiated at the time of the sale, ensuring the assets are free and clear of all liens and encumbrances.