What must a transferee of a Fitstop franchise do to assume liability for the franchise agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.18 Our consent shall also be conditioned each upon such transferee's execution of an agreement by which transferee personally assumes full and unconditional liability for and agrees to perform from the date of such transfer all obligations, covenants, and agreements contained in this Franchise to the same extent as if transferee had been an original party to this Franchise.
You and each transferor shall continue to remain personally liable for all affirmative obligations, covenants, and agreements contained herein for the full term of this Franchise or for such shorter period as we may, in our sole discretion, determine.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a transferee must execute an agreement to assume full liability for the franchise agreement. Specifically, the transferee must agree to perform all obligations, covenants, and agreements contained in the Franchise Agreement from the date of the transfer. This assumption of liability must be unconditional, as if the transferee were an original party to the agreement.
Even with the transferee assuming full liability, the transferor (the original franchisee) is not necessarily released from their obligations. The original franchisee remains personally liable for all affirmative obligations, covenants, and agreements within the Franchise Agreement for the full term of the franchise. However, Fitstop retains the discretion to determine a shorter period for which the transferor remains liable.
This requirement ensures that Fitstop has recourse to both the new and former franchisees, providing added security that all terms of the agreement will be met. It also means that potential transferees must carefully review the Franchise Agreement to understand the full scope of their obligations before assuming responsibility. The potential transferee should seek legal counsel to fully understand the implications of assuming the obligations, covenants, and agreements outlined in the Fitstop Franchise Agreement.