Can Fitstop request additional information from a potential transferee?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.12 Conditions for our approval of transfer include, but are not limited to, the following: (1) you are in full compliance with this Agreement; (2) you pay us all amounts due; (3) transferee and its general managers satisfactorily complete our training program, (4) transferee executes our then-current form of Franchise Agreement; (5) the transfer fee is paid; (6) we approve any written agreements regarding transfer; (7) you supply any additional information we require; (8) you provide, as a personal covenant to the transferee, in addition to your covenants to us, an agreement not to seek to divert business from us and our franchisees; and (9) you sign a general release and other documents we require.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop can request additional information from a potential transferee as part of the transfer approval process. Specifically, Fitstop may condition a transfer on several factors, including receiving any additional information they require. This condition is outlined within the broader context of Fitstop's rights and requirements regarding franchise transfers.
This provision means that if a franchisee wants to sell their Fitstop franchise, the potential buyer (transferee) must provide any information Fitstop deems necessary. This could include financial statements, business plans, or background checks to ensure the transferee meets Fitstop's standards for franchisees. The franchisee seeking to transfer must also comply with this requirement to get the transfer approved.
It is important to note that the FDD specifies other conditions for transfer approval, such as the franchisee being in full compliance with the Franchise Agreement, paying all amounts due to Fitstop, ensuring the transferee completes the training program, and the transferee executing the then-current Franchise Agreement. The transfer fee must also be paid, and Fitstop must approve any written agreements regarding the transfer. The franchisee must also agree not to divert business from Fitstop and its franchisees and sign a general release and other required documents.
In summary, Fitstop retains significant control over who can become a franchisee through a transfer, and the ability to request additional information is one tool they use to ensure the transferee is a good fit for the Fitstop system. Prospective franchisees should be aware of these conditions and prepared to meet them if they plan to sell their franchise in the future.