Under what circumstances might a Fitstop franchisee not be required to pay Brand Development Fund fees?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
Your current Fund Contribution will be two percent (2%) of the Gross Revenue generated by your Franchised Business.
Currently, affiliate-owned locations may – but are not obligated to – contribute to the Fund in the same amount and manner as System Franchised Businesses. Other System franchisees' respective Fund contributions may be calculated at a different rate or on a different basis and, under limited circumstances, certain franchisees may not be required to pay Fund fees.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 24–35)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, under limited circumstances, certain franchisees may not be required to pay Brand Development Fund fees. The standard Fund Contribution is two percent (2%) of the Gross Revenue generated by the Franchised Business. However, the franchisor retains the discretion to set different rates or bases for other franchisees' contributions.
This flexibility in fund contribution requirements could be advantageous for franchisees in specific situations. For example, Fitstop might waive the fee for a new franchisee to help them establish their business or for a franchisee experiencing financial hardship. It also allows Fitstop to incentivize franchisees to participate in specific marketing initiatives or to reward high-performing franchisees.
Prospective franchisees should inquire about the specific conditions under which a franchisee might be exempt from paying the Brand Development Fund fees. Understanding these potential exceptions can help franchisees better assess their financial obligations and negotiate favorable terms with Fitstop.