Does Fitstop's Right of First Refusal apply to an approved transfer to a beneficiary in a will?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.10 Our Right of First Refusal will not apply to an approved transfer to a beneficiary in your will or a beneficiary by intestate succession nor to a transfer during lifetime to the spouse or adult child of the transferor.
However, we can exercise our Right of First Refusal in the event of a proposed transfer of
this Agreement by your executor, administrator, guardian, or other personal representative or by the beneficiary who takes under your will or by intestate succession.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the Right of First Refusal generally does not apply to an approved transfer to a beneficiary in a will. However, Fitstop retains the right to exercise its Right of First Refusal if there is a proposed transfer of the Franchise Agreement by the executor, administrator, guardian, or other personal representative, or by the beneficiary who takes under the will.
This means that while Fitstop allows the initial transfer to a beneficiary without exercising its Right of First Refusal, it maintains control over subsequent transfers. If the beneficiary or the estate decides to sell the franchise, Fitstop has the first option to purchase it. This provision ensures that Fitstop can maintain standards and control over who ultimately operates a Fitstop franchise, even after the original franchisee's death.
For a prospective Fitstop franchisee, this clause has important implications for estate planning. While you can pass the franchise to a beneficiary without triggering Fitstop's immediate Right of First Refusal, your estate or beneficiary will need to be aware that any future sale is subject to Fitstop's approval and first refusal rights. This could affect the value and marketability of the franchise in the event of a future transfer.