Does Fitstop's Right of First Refusal apply to an approved transfer to a spouse or adult child?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
the majority interest or interests. This right shall continue for a period of one (1) calendar year from the closing of the transfer transaction by which we obtain in excess of 50% of the interests in you.
- 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.
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 does not apply to an approved transfer to a spouse or adult child of the transferor during their lifetime. However, all such transfers are subject to Fitstop's conditions and requirements regarding transfers, including application and approval by Fitstop.
Even though the Right of First Refusal is waived for transfers to a spouse or adult child, the transferee must still meet Fitstop's standard requirements. These include completing the application process, securing Fitstop's approval, paying the application and training fees, and executing the then-current Franchise Agreement. However, the FDD states that transfer fees are not payable if the transfer is to a spouse or an adult child.
Fitstop retains the right to exercise the Right of First Refusal in the event of a proposed transfer of the Franchise Agreement by an executor, administrator, guardian, or other personal representative, or by a beneficiary who takes under the will or by intestate succession. This means that while a transfer to a spouse or adult child during the franchisee's lifetime is exempt from the Right of First Refusal, a transfer after the franchisee's death or incapacitation is not, giving Fitstop the option to purchase the franchise instead of allowing it to be transferred to the intended beneficiary.