Are there any exceptions to the requirement that principal owners and their spouses sign the Fitstop franchise agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
Each of your principal owners and their spouse must sign the franchise agreement as either (a) the franchisee under the Franchise Agreement itself, or (b) a guarantor under the form of personal guaranty attached to said agreement. In either event, by signing the franchise agreement each franchisee owner and their respective spouse(s), as applicable, agree to perform, and guarantees, all the franchisee's obligation to us and our affiliates (including the obligations under this Agreement) and agrees to be bound by the restrictive covenants, the confidentiality provisions and certain other provisions contained in the Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 40–41)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, each principal owner and their spouse must sign the franchise agreement, either as the franchisee or as a guarantor. By signing, they agree to perform and guarantee the franchisee's obligations to Fitstop and its affiliates, including obligations under the agreement. They also agree to be bound by restrictive covenants, confidentiality provisions, and other provisions in the Franchise Agreement.
This requirement ensures that Fitstop has recourse to both the principal owners and their spouses for the franchisee's obligations. It also makes both parties accountable for upholding the terms of the agreement, including confidentiality and non-competition clauses. This is a fairly standard practice in franchising, as franchisors typically seek to secure the obligations of the business with personal guarantees from the owners and their spouses.
Prospective Fitstop franchisees should carefully review the personal guaranty and understand the full extent of their obligations before signing the Franchise Agreement. They should also consider the implications for their personal assets and financial security, as the guaranty could expose them to liability if the franchise fails to meet its obligations to Fitstop.