Does Fitstop reserve the right to establish other franchised or company-owned businesses that sell Approved Products and Approved Services under a different trade name or trademark in the future without franchisee consent?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
Your Franchise Agreement does not provide you with any right or option to open and operate any additional Franchised Businesses. As previously discussed, each Franchised Business you are awarded the right to open and operate must be governed by its own specific form of Franchise Agreement unless we agree to add that subsequent franchise to your existing agreement via a form of addendum. We have not established other franchised or company-owned outlets or another distribution channel for offering or selling products/services that are similar to the Approved Products and Approved Services under a different trademark. Neither we nor our affiliates have established, or presently intend to establish, other franchised or company-owned businesses that sell our Approved Products and Approved Services under a different trade name or trademark, but we reserve the right to do so in the future without your consent.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop retains the right to establish other franchised or company-owned businesses that sell approved products and services under a different trade name or trademark without obtaining consent from existing franchisees. While Fitstop states that they do not currently have plans to do so, they explicitly reserve the right to do so in the future. This could introduce competition for franchisees.
Fitstop also reserves the right to market and sell similar products and services under different trademarks at any location, whether inside or outside a franchisee's designated territory. Additionally, Fitstop can use its trademarks and system to distribute approved products and services through various channels, including the internet, direct mail, and wholesale stores, without providing compensation to franchisees for orders solicited or accepted within their territories.
These reserved rights mean that a Fitstop franchisee's territory is not exclusive, and they may face competition from both company-owned and other franchised businesses. Fitstop is not obligated to compensate franchisees for business generated within their territory through alternative distribution channels or other businesses operating under different trademarks. This is a common practice in franchising, where franchisors seek to maintain flexibility and control over their brand and distribution strategies.