Is the renewal of the Fitstop franchise guaranteed if the franchisee provides the required notice?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
hall be and remain in full force and effect for a period beginning on the Effective Date and ending upon the expiration of the Term, unless a Party terminates this Agreement pursuant to the terms herein.
- 14.2 Not less than six (6) months or more than 12 months prior to the expiration of the Term, you must notify us in writing of your intention to renew this Agreement for the Renewal Term.
- 14.3 Provided you deliver to us the required notice and provided that you are not in default of this Agreement, we may provide you with the option to renew the Franchise for for up to two (2) consecutive, five (5) year terms (each, a "Renewal Term").
- 14.4 As a condition of and at the time of any renewal, you must do the following:
- 14.4.1 Execute our then current Franchise Agreement, which may differ substantially from this Agreement under which you have operated, and any other ancillary agreements and documents as we may require;
- 14.4.2 Execute a general release, in a form prescribed by us, of any and all claims against us, our subsidiaries, and our and their respective officers, directors, agents, and employees in their corporate and individual capacities including, without limitation, claims arising under this Agreement and any federal, state, and local laws, rules, and ordinances;
- 14.4.3 Pay us a renewal fee of $20,000 prior to or upon execution of the appropriate renewal form(s) of agreement and/or addendum we, at our option, have the right to require as a precondition to any renewal of the franchise and other rights awarded under this Agreement; and
- 14.4.4 Cure any and all defaults, including any monetary defaults, that exist as of the date your request renewal and the date of renewal.
- 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 characterize
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, renewal of the franchise is not guaranteed even if the franchisee provides the required notice. To renew the Fitstop franchise, the franchisee must notify Fitstop in writing of their intention to renew the agreement not less than six months or more than 12 months prior to the expiration of the term. However, providing this notice is only the first step in the renewal process.
Fitstop "may" provide the franchisee with the option to renew for up to two consecutive, five-year terms, provided the franchisee delivers the required notice and is not in default of the agreement. This indicates that Fitstop retains discretion over whether to offer a renewal at all.
As a condition of renewal, the franchisee must execute Fitstop's then-current Franchise Agreement, which may differ substantially from the original agreement. The franchisee must also execute a general release of all claims against Fitstop and pay a renewal fee of $20,000. Additionally, the franchisee must cure any and all defaults existing as of the date of the renewal request and the date of renewal. These conditions make the renewal process complex and potentially costly, and the new agreement could have terms less favorable than the original. If a franchisee continues to operate without express written consent from Fitstop after the term expires, it will only be considered a month-by-month extension that Fitstop can terminate with 30 days' notice.