After a transfer of a Fitstop franchise, what happens to the prevailing fees?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon each assignment or other transfer of this Franchise to any person or persons under the terms and conditions of this Section, the prevailing fees (i.e., Royalty Fee, Marketing Fee, Technology Fee, Annual Convention Fee, etc. ) owing to us after the date of such assignment or transfer shall be automatically adjusted to the then prevailing percentage required for new franchises issued by us at the time of such assignment or transfer.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, upon the transfer of a franchise, the prevailing fees will be adjusted. Specifically, after an assignment or transfer, the Royalty Fee, Marketing Fee, Technology Fee, and Annual Convention Fee will be automatically adjusted to the percentage required for new Fitstop franchises at the time of the transfer.
This means that a new franchisee taking over an existing Fitstop location will be subject to the fee structure in place for new franchisees at that time, which could be different from what the original franchisee was paying. This adjustment ensures that all franchisees are contributing to Fitstop based on the current standards and rates.
For a prospective franchisee, this is an important consideration. If you are looking to acquire an existing Fitstop franchise, you should be aware that the fees you pay may not be the same as what the previous owner was paying. It is essential to understand the current fee structure for new franchises to accurately assess the financial implications of the transfer. This could impact the profitability and overall investment return of the franchise.