What rights are awarded by the Fitstop agreement within the Designated Territory?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
2.1 Franchise Award; Approved Premises. We award you the right, and you undertake and accept the obligation, to independently own and operate the Franchised Business from the location you propose, we approve and you secure in accordance with the terms of this Agreement (the "Premises"). You
acknowledge that the rights granted in this Agreement only award you the right to: (i) operate the Franchised Business in accordance with our System standards and specifications from the specific Premises that we approve in writing; and (ii) market, advertise and promote the Franchised Business within the geographical area we designate in Schedule 2 to this Agreement (your "Designated Territory"). The Premises, once approved by us and secured by you, will be set forth in the Data Sheet attached as Schedule 1 to this Agreement (the "Data Sheet").
- 2.2 Territorial Rights within Designated Territory; Related Rights and Limitations. During the term of this Agreement, we will not open or operate, or license any third party the right to open or operate, another System Business under the Proprietary Marks from a physical location within the Designated Territory.
The territorial rights in this Section 2.2 shall be subject to our reserved rights detailed below in this Section.
You may accept business and inquiries from prospective and existing members and customers (each, a "Member") via your Franchised Business, provided you: (i) only provide the Approved Services and Approved Products at and from the Premises, unless we agree otherwise in a separately-signed agreement; and (ii) do not market the Franchised Business or otherwise solicit any potential customers or members outside of your Designated Territory.
- 2.3 Reservation of Rights.
Notwithstanding anything contained in this Agreement, we and/or our affiliates hereby reserve the exclusive right to: (i) establish and operate, and license any third party the right to establish and operate, other System Businesses using the Proprietary Marks at any location outside of the Designated Territory; (ii) market, offer and sell products and services that are similar to the products and services offered by the Franchised Business under a different trademark or trademarks at any location, within or outside the Designated Territory; (iii) use the Proprietary Marks and System, other such marks we may designate, to distribute the Approved Products in any alternative channel of distribution, within or outside the Designated Territory (including the Internet, mail order, catalog sales, toll-free numbers, wholesale stores, etc.); (iv) to acquire, merge with, or otherwise affiliate with, and after that own and operate, and franchise or license others to own and operate, any business of any kind, including, without limitation, any business that offers products or services the same as or similar to the Approved Products and/or Approved Services (but under different marks), within or outside the Designated Territory; (v) use the Proprietary Marks and System, and license others to use the Proprietary Marks and System, to engage in any other activities not expressly prohibited in this Agreement and; and (vi) own and operate, or license third parties the right to own or operate, a System Business from a premises that is located within a "Non-Traditional Venue" that is any captive venue or comparable location, including without limitation, academic institutions, military bases, hotels and/or other resorts, "big box" gyms, corporate office buildings and/or complexes, sports arenas and stadia, train stations, casinos and/or other comparable venues, both within or outside the Designated Territory.
- 2.4 No Additional Franchises and/or Franchise Rights. Unless we agree otherwise in a form of addendum to this Agreement, you are not entitled to any right or option to develop any additional Franchises at any location other than the Franchised Business.
During the Term, you may, by written notice to us request our approval for you to open one or more additional franchises in your Designated Territory, but we are under no obligation to award you the same.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are granted specific rights within their designated territory, but these rights are subject to certain limitations and reservations by Fitstop.
The Fitstop franchise agreement awards the franchisee the right and obligation to independently own and operate the franchised business from an approved location (the Premises). The franchisee can market, advertise, and promote the franchised business within a defined geographical area, known as the Designated Territory. Fitstop agrees not to open or operate, nor license others to open or operate, another Fitstop System Business under its Proprietary Marks from a physical location within the franchisee's Designated Territory during the agreement's term.
However, the franchisee must provide Approved Services and Approved Products at and from the approved Premises, unless Fitstop agrees otherwise in writing. Franchisees are restricted from marketing the Franchised Business or soliciting potential customers outside their Designated Territory. Fitstop reserves the right to operate System Businesses outside the Designated Territory, market similar products/services under different trademarks within or outside the territory, and utilize alternative distribution channels (like the Internet) for Approved Products within or outside the territory. Fitstop also reserves the right to operate a System Business from a premises that is located within a Non-Traditional Venue, both within or outside the Designated Territory.
The agreement does not entitle the franchisee to develop additional franchises, unless Fitstop agrees otherwise via an addendum to the agreement. Franchisees may request approval to open additional franchises in their Designated Territory, but Fitstop is under no obligation to grant such approval.