Who is responsible for the costs associated with fitting out the new Fitstop premises?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
9.9.4 You acknowledge and agree that: (1) compliance with this section is at your sole cost and expense; (2) it is in the best interests of both parties that the Franchise be open for trade from the new Premises as soon as possible; and (3) subject to relevant laws, the new Premises are to be fitted out at your cost to conform with the then prevailing image and otherwise in accordance with this Section.
9.5.3.3 provide us with, and receive our consent with respect to, the plans for the build-out including the plans, design, contractors employed, budget and time frame for the completion of the build-out;
9.5.3.4 engage competent, licensed contractors to complete the works in a proper and workmanlike manner and in a manner to ensure timely completion of the buildout;
9.5.3.5 manage, supervise, and ensure that the buildout is completed by competent, licensed tradesmen in a proper and workmanlike manner;
9.5.3.6 secure appropriate insurances in connection with the buildout;
9.5.3.7 correct any defects in the buildout;
9.5.3.8 ensure the build-out complies with all requirements we specify in the Manual(s) and any government regulatory requirements;
9.5.3.9 verify compliance with all laws and regulations that may be imposed by local, state, and federal agencies in relation to the buildout; and
9.5.3.10 ensure that you pay any and all amounts due in connection with the buildout and other development activities associated with establishing the Franchised Business at the Premises, which may include amounts due to our Approved Supplier(s) and/or us.
9.8 Upgrading Premises, Furniture, Fixture, Equipment ("FFE") and/or Other Required Items. Where reasonably necessary to protect our legitimate commercial interest, we may change any brand standard so as to require an upgrade of the Premises, FFE and/or any other Required Item used to initially build out and equip the Franchised Business. When this occurs, we require you to perform these upgrades at your cost within 180 calendar days of when we notify you of such upgrades via the Manuals or otherwise in writing to similarly-situated System franchisees.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the franchisee is primarily responsible for the costs associated with fitting out both the initial and any subsequent premises. Specifically, in the event of a relocation, the franchisee bears the cost of conforming the new premises to Fitstop's prevailing image and standards. This includes all expenses related to the build-out. The franchisee is also responsible for managing the build-out process, including securing necessary insurances and ensuring compliance with Fitstop's specifications and government regulations.
This means a prospective Fitstop franchisee must be prepared to cover all expenses related to preparing the location for business. This encompasses not only the initial setup but also any future upgrades or relocations that may become necessary during the term of the franchise agreement. The franchisee is expected to engage competent, licensed contractors and ensure the build-out meets Fitstop's standards and legal requirements.
Fitstop retains significant control over the build-out process, including approving plans, designs, contractors, budgets, and timelines. The franchisee must obtain Fitstop's consent for all these aspects. Furthermore, the franchisee is responsible for correcting any defects in the build-out and ensuring compliance with all specified requirements. This arrangement places the financial burden and management responsibility for the physical setup of the Fitstop location on the franchisee, while Fitstop maintains oversight to ensure brand consistency and quality.
In addition to the initial build-out, the franchisee is also responsible for ongoing maintenance, refurbishment, and upgrades to the premises and equipment. Fitstop can mandate upgrades to the premises, furniture, fixtures, and equipment to maintain brand standards, and the franchisee must bear the cost of these upgrades within 180 days of notification. This ongoing financial responsibility highlights the importance of careful financial planning and budgeting for prospective Fitstop franchisees.