What is Fitstop's preference regarding a franchisee's approach to the business?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We encourage but do not require you to personally supervise the Franchised Business and prefer to select Franchisees who favor and appear committed to a "hands on" and well-informed approach to the business. We strongly recommend that you devote a substantial amount of time to your franchised location, whether or not you engage a Designated Manager.
Franchisees who do not devote their full time and efforts to the establishment and operation of their franchised facilities may have lower Gross Revenue, higher operating costs and lesser name recognition in their areas than those franchisees who do devote their full efforts to the business. Examples of the types of functions which you might perform include supervision of employees, inventory checks, review of sales and costs, bookkeeping and all reasonable efforts to ensure smooth and efficient operations.
The Franchised Business must be directly supervised and managed by a person, identified to us who has undergone our training program. Based on his/her/their experience, we may choose to waive this requirement in our sole discretion. If you are not willing to be the full-time operator of your business, then you will be required to engage a manager and have them complete our training program (the "Designated Manager"). The Designated Manager is not required to hold an equity interest in the franchisee entity.
Any and all Designated Manager(s) must sign our then-current prescribed form of Confidentiality and Non-Competition Agreement. If and when a Designated Manager leaves his/her/their employment at your Franchised Business, you must recruit a new Designated Manager within thirty (30) days and submit the replacement's qualifications to us for our review and approval (which may be conditioned on completion of certain "Management Criteria") before substituting a new Designated Manager at any of your locations (unless you resume taking over the day-to-day operations of the Franchised Business on a full-time basis).
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 40–41)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, while not mandatory, Fitstop encourages franchisees to personally supervise their franchised business. Fitstop prefers franchisees who are committed to a "hands on" and well-informed approach. Fitstop strongly recommends that franchisees devote a substantial amount of time to their location, regardless of whether they engage a Designated Manager.
Fitstop indicates that franchisees who do not dedicate their full time and effort to the business may experience lower gross revenues, higher operating costs, and reduced brand recognition compared to those who are more actively involved. Examples of functions that a franchisee might perform include supervising employees, performing inventory checks, reviewing sales and costs, bookkeeping, and ensuring smooth and efficient operations.
If a franchisee is not willing to be the full-time operator of the business, they are required to engage a Designated Manager who has completed Fitstop's training program. The Designated Manager is not required to hold an equity interest in the franchisee entity. Any Designated Manager must sign Fitstop's Confidentiality and Non-Competition Agreement. If a Designated Manager leaves, the franchisee must recruit a new Designated Manager within thirty (30) days and submit the replacement's qualifications for review and approval, unless the franchisee resumes full-time management of the business.