What is the role of System standards, specifications and processes in the build out of the Premises for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
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General Note. The estimated investment ranges were prepared based upon and accounting for: (i) various sources of information, including (a) the experience of our affiliates developing two (2) System Businesses (each, an "Affiliate Business") over the past 18 months, (b) the experience of our Affiliate Franchisor and its System franchisees that have Franchised Businesses operating or under development in Australia, (c) information we have received from our current third-party Approved Suppliers for certain investment items or categories above, (d) information and data that we have received from various real estate brokers and/or other sources for information with respect to current real estate and commercial leasing markets, and (e) various other due diligence; and (ii) a number of expectations and reasonable assumptions that we make as part of our standard franchise offering, such as franchisee (a) securing an approved Premises and opening the Franchised Business within the prescribed timelines set forth in your Franchise Agreement (and on or before the Rent Commencement Date under the lease for the Premises), and (b) ensuring that the Premises is built out in accordance with our current System standards, specifications and processes, and (c) using our Approved Suppliers for certain Required Items as set forth in the Chart above and in Item 8 of this Disclosure Document below.
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- Initial Franchise Fee. Please see Item 5 of this Disclosure Document for additional details regarding this initial fee and the terms associated with the same. This amount must be paid in connection with each Franchised Business you are awarded the right to independently own and operate at the time such rights are awarded, and such amounts are deemed fully earned upon payment under your signed Franchise Agreement.
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- Training-Related Costs and Expenses.
Source: Item 7 — TEM 7: ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees must ensure that the build-out of their premises adheres to the brand's system standards, specifications, and processes. This is a key expectation that Fitstop has of its franchisees as part of its standard franchise offering. The FDD notes that the estimated initial investment ranges were prepared based upon the experience of Fitstop's affiliates and franchisees, information from approved suppliers, real estate brokers, and due diligence, all while accounting for the expectation that franchisees will build out their premises according to Fitstop's standards.
Specifically, the cost for leasehold improvements, which covers the construction or build-out of the facility, is estimated to range from $100,000 to $325,000. This significant investment underscores the importance of adhering to Fitstop's system standards during the build-out phase. Franchisees are also expected to use Fitstop's approved suppliers for certain required items, as detailed in Item 8 of the FDD, which further ensures consistency and compliance with the brand's standards.
These standards, specifications, and processes are further detailed in Fitstop's manuals or in writing. This suggests that Fitstop provides comprehensive guidelines to franchisees to ensure that the premises are built out in a manner that aligns with the brand's image and operational requirements. While franchisees may negotiate lease terms with landlords, including build-out costs and tenant improvement credits, they must still adhere to Fitstop's standards throughout the process. The location, design, layout, and size of the franchised business can influence the costs of the operational equipment and supplies package, and any variances from the standard build-out must be approved by Fitstop.
In summary, Fitstop franchisees are required to follow the brand's system standards, specifications, and processes during the build-out of their premises. This ensures consistency across all locations and helps maintain the brand's quality and image. Franchisees should carefully review the Fitstop manuals and consult with approved suppliers to ensure compliance with these standards, as failure to do so could impact their ability to operate the franchise successfully.