Is participation in Fitstop's automatic debit/credit transfer program (EFT Program) mandatory?

According to Fitstop's 2024 Franchise Disclosure Document, participation in the automatic debit/credit transfer program (EFT Program) is mandatory. As a Fitstop franchisee, you must execute and deliver all necessary documents and instruments to establish and maintain this program. This includes providing all information and materials, such as a voided check, required to identify and enroll your account in the EFT Program, which is referred to as your "Designated EFT Account."

This requirement ensures that Fitstop can efficiently collect ongoing fees, such as the Royalty Fee and Fund Contribution, directly from your account. The Royalty Fee is the greater of a specified percentage of Gross Revenue or a minimum amount, while the Fund Contribution is equal to two percent of the Gross Revenue generated by the Franchised Business. Both are billed and collected in the same manner.

Additionally, other fees payable to Fitstop, such as Training Fees, Transfer Fees, Renewal Fees, and Local Marketing Requirement expenditures, must also be paid out of your Designated EFT Account. This mandatory participation in the EFT Program streamlines the payment process and ensures that all financial obligations to Fitstop are met in a timely manner.

Failure to comply with the EFT Program requirements could potentially lead to a breach of the franchise agreement, as timely payments are critical to maintaining a good standing with Fitstop. Therefore, prospective franchisees should be prepared to set up and maintain the Designated EFT Account as part of their operational responsibilities.