What are the specific actions a Fitstop franchisee is required to take in the process of securing an approved premises?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ll as this Agreement requires may be increased or circumstances may dictate that you add new types of coverage.
Section 9: Securing Approved Premises
9.1 Obligation to Secure an Approved Premises
- 9.1.1 Unless we have already agreed upon a location for the Premises at the time we execute this Agreement, you must use your best efforts to locate and enter into a lease agreement for a Premises within the Designated Territory that we approve within six (6) months of the Effective Date. As part of that process, it is your responsibility to: (i) inspect prospective premises; (ii) report back to us on a weekly basis with details of the prospective premises inspected in the prior seven (7) calendar days; (iii) consider any potential premises we may suggest; and (iv) if we deem necessary, engage an agent we approve to assist you in locating an appropriate premises within the Designated Territory.
- 9.1.2 If you have not located an appropriate premises by the time specified above, we may in our discretion (i) agree to terminate this Agreement or (ii) agree to extend the time you have to locate an appropriate premises.
9.2 Approval of Approved Premises.
- 9.2.1 You irrevocably authorize us and our legal practitioners to access the premises.
- 9.2.2 We accept no responsibility for the suitability of the Premises for the conduct of the Franchise.
- 9.2.3 If the Premises is not at the date of this Agreement already in use as one of our franchises, then you must not conduct the Franchised Business from the Premises until: (1) we have confirmed in writing that the Premises has been erected or converted and improved with equipment and furnishings to our reasonable specification; and (2) you have obtained all consents necessary for the conduct of the Franchised Business from the Premises.
- 9.2.4 You must not relocate or substantially change the size or layout of the Premises without our prior written approval.
9.3 Lease of Premises.
- 9.3.1 You are solely responsible for locating, proposing and securing a lease for the Premises we approve in writing prior to you securing the right to occupy and use such Premises for purposes of developing and operating the Franchised Business.
- 9.3.2 You must ensure that the lease for the Premises (the "Lease") contains and integrates the provisions and covenants set forth in this Section or that we designate in the Manuals at any time prior to you securing any Premises (the "Prescribed Lease Provisions"), with said Lease subject to our review and approval with respect to any markup or negotiated changes to said provisions as part of our overall right to approve the Premises itself.
- 9.3.3 You must perform and observe at all times the terms (including conditions and covenants) of any lease or other agreement affording you access to and use of the Premises.
- 9.3.4 You will be liable to pay all amounts owing in connection with the Lease and Premises governed thereby, and your failure to cure any defaults you have with respect to Tenant's (or its guarantors) monetary or non-monetary obligations under the Lease within the applicable cure periods set forth therein shall constitute a material default and, if the Lease is terminated or subject to termination, grounds for immediate termination of this Agreement by us upon written notice to you.
- 9.3.5 Where you have entered into a lease in respect of the Premises: (1) we may at any time during the Term notify you in writing that we require you to assign the lease of the Premises to us or our nominee; and (2) you must within seven (7) calendar days of such request assign the lease of the Premises to us or our nominee and sign all documents and take all necessary steps to effect the assignment of the lease of the Premises.
- 9.4 Prescribed Lease Terms. You must use your best efforts to negotiate with the landlord that owns or controls the Premises to integrate the Prescribed Lease Provisions, including a collateral assignment of lease in favor of us in the event this Agreement or the Lease is subject to termination, as specifically set forth in our then-current Manual(s).
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, securing an approved premises involves several key responsibilities for the franchisee. Unless a location has already been agreed upon, the franchisee must actively search for a suitable location within their designated territory and enter into a lease agreement within six months of the agreement's effective date. This process includes inspecting potential sites, providing weekly updates to Fitstop about the locations inspected, considering any locations suggested by Fitstop, and potentially engaging an approved agent to assist in the search, if deemed necessary by Fitstop. If a suitable premises is not located within the specified timeframe, Fitstop may choose to terminate the agreement or extend the search period.
The Fitstop franchisee is solely responsible for finding, proposing, and securing a lease for a premises that Fitstop approves in writing. The lease must include specific provisions and covenants, referred to as "Prescribed Lease Provisions," which are subject to Fitstop's review and approval. The franchisee must adhere to all terms of the lease and is liable for all associated payments. Failure to meet these obligations or to rectify any defaults under the lease could lead to the termination of the franchise agreement. Fitstop also retains the right to require the franchisee to assign the lease to them or their nominee at any point during the term of the agreement, with the franchisee required to comply within seven calendar days of such a request.
Furthermore, the Fitstop franchisee must obtain Fitstop's consent regarding the build-out plans for the premises, including the design, contractors, budget, and timeline. They must hire competent, licensed contractors to complete the build-out in a proper and timely manner, manage and supervise the build-out, secure appropriate insurance, correct any defects, and ensure compliance with all specifications in Fitstop's manuals and government regulations. The franchisee is also responsible for verifying compliance with all applicable laws and regulations and for paying all amounts due in connection with the build-out and other development activities. The premises must be used exclusively for operating the Fitstop franchise and must be kept open to the public during the hours specified in the manuals or as otherwise prescribed by Fitstop.