Are there any geographic limitations on where a Fitstop franchisee can market their business?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
USA, Inc. 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.);
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee's ability to market their business is geographically limited to their designated territory. The agreement awards the franchisee the right to market, advertise, and promote the Fitstop business within a specific geographical area outlined in Schedule 2 of the agreement, referred to as the "Designated Territory."
The document specifies that franchisees cannot market or solicit potential customers or members outside of their Designated Territory. However, there is an exception: a franchisee may advertise outside their territory if the area is contiguous to their Designated Territory, has not been granted to another Fitstop business or franchisee, and Fitstop provides prior written consent.
Fitstop also requires franchisees to expend a minimum of 1% of the Gross Revenue generated by the Franchised Business during the preceding calendar month on local marketing within their Designated Territory. This is referred to as the "Local Marketing Requirement" or "LMR". Fitstop may also require that these funds be spent on services or collateral acquired from approved suppliers. Franchisees must also ensure they have a dedicated phone line and are listed in designated Internet-based directories.