What does Fitstop recommend regarding the amount of time a franchisee should devote to their franchised location?
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 strongly encourages franchisees to devote a substantial amount of time to their franchised location. Fitstop believes that a 'hands on' and well-informed approach is beneficial.
The FDD indicates that franchisees who dedicate their full time and effort to the Fitstop business may experience higher gross revenues, lower operating costs, and greater name recognition in their area. Examples of tasks that a franchisee might handle include supervising employees, managing inventory, reviewing sales and costs, and bookkeeping.
If a franchisee chooses not to be the full-time operator, they must engage a Designated Manager who completes Fitstop's training program. This Designated Manager does not need to have an equity interest in the franchisee entity. The Designated Manager must also sign a Confidentiality and Non-Competition Agreement. If the Designated Manager leaves, the franchisee has 30 days to find a replacement and submit their qualifications to Fitstop for approval, unless the franchisee resumes full-time management of the business.