What is the required action for a Fitstop franchisee upon receiving notice of a modified covenant?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.5 Interpretation of Restrictive Covenants. You understand and acknowledge that we shall have the right, in our sole discretion, to reduce the scope of any covenant set forth in this Section without your consent effective immediately upon written notice to you.
You agree that you shall comply with any covenant as so modified, which modified covenant shall be fully enforceable notwithstanding the provisions of any other Sections hereof.
- 18.6 No Defense to Violation of Covenants. You expressly agree that the existence of any claims that you or your employees may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement of us of the covenants in this Section.
You agree to pay all costs and expenses (including reasonable attorneys' fees and all costs of court) incurred by us in connection with the enforcement of this Section of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop has the right to modify any covenant set forth in Section 18. The modification is effective immediately upon written notice to the franchisee.
Upon receiving notice of a modified covenant, a Fitstop franchisee must comply with the covenant as modified. The modified covenant is fully enforceable, regardless of any other provisions in the agreement. This means that Fitstop franchisees do not have the option to reject the changes or negotiate different terms; they are obligated to adhere to the new requirements as soon as they are notified.
This requirement underscores the importance of carefully reviewing the restrictive covenants within the franchise agreement before investing in a Fitstop franchise. Franchisees should understand the scope of these covenants and the potential for them to change during the term of the agreement. The franchisee expressly agrees that any claims against Fitstop do not constitute a defense to the enforcement of the covenants in Section 18. This means a franchisee cannot refuse to comply with a modified covenant even if they have a dispute with Fitstop.
Fitstop franchisees are also responsible for all costs and expenses, including attorney's fees and court costs, that Fitstop incurs while enforcing this section of the agreement. This further emphasizes the importance of compliance with the covenants and the potential financial burden of non-compliance.