What restrictions are Fitstop franchisees and their spouses bound by when signing the franchise agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
erving as its on-site manager).
In addition to the Franchise Agreement, both you and your spouse will be required to sign guarantees of performance in which you will guarantee the performance of the Franchisee entity's obligations to us under that agreement. The only restriction we place on the manager of your business is that the manager must execute a confidentiality and non-competition agreement similar to the one you will execute if you purchase a franchise from us.
We expect that you will keep your Franchised Business open and operating during those hours where the majority of our System businesses are open or as otherwise recommended in our Operations Manual, but as an independent contractor you may deviate from our recommended hours if (a) there are local regulations or landlord restrictions that affect your ability to actively operate your Franchised Business, or (b) you otherwise provide us with notice in writing of your hours of operation and an explanation regarding any material deviation from our recommended hours of operation.
Each of your principal owners and their spouse must sign the franchise agreement as either (a) the franchisee under the Franchise Agreement itself, or (b) a guarantor under the form of personal guaranty attached to said agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 40–41)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, both the franchisee and their spouse must sign guarantees of performance, ensuring they fulfill the franchisee entity's obligations to Fitstop under the Franchise Agreement. By signing the agreement, both the franchisee and their spouse agree to perform and guarantee all of the franchisee's obligations to Fitstop and its affiliates, including all obligations outlined in the agreement. They also agree to be bound by the restrictive covenants, confidentiality provisions, and certain other provisions included in the Franchise Agreement.
This means that the franchisee and their spouse are legally responsible for ensuring the Fitstop franchise meets all contractual obligations. The restrictive covenants and confidentiality provisions are particularly important, as they likely include clauses that prevent the franchisee and their spouse from competing with Fitstop during and after the franchise term, as well as protecting Fitstop's confidential business information. These are standard practices in franchising to protect the brand and system.
Additionally, Fitstop restricts the use of its Proprietary Marks. Franchisees cannot use any Proprietary Mark as part of any corporate name or with modifying words, terms, designs, or symbols, except for those licensed by Fitstop. Franchisees are also prohibited from using any Trademark in connection with any business or activity other than the business conducted according to the Franchise Agreements entered into between the franchisee and Fitstop, or in any other manner not explicitly authorized in writing by Fitstop. This is a common restriction in franchise agreements to protect the brand's trademarks and ensure consistent branding across all franchise locations.