Under what condition might Fitstop designate a Designated Territory before a Fitstop franchisee secures an approved premises?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
In certain situations where you have not secured an approved Premises at the time your Franchise Agreement is executed, we may determine to (i) designate a Designated Territory wherein you must locate and secure that Premises, and (ii) adjust the boundaries of the Designated Territory to a comparable geographical region that immediately surrounds the Premises, which we will provide to you in writing as part of our response to our site proposal so you can evaluate before securing the proposed site (if and as we determine appropriate). Otherwise, we may not modify the boundaries of your Designated Territory unless the parties mutually agree to the same in a separate agreement.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop may designate a Designated Territory even if a franchisee has not yet secured an approved premises under specific conditions. Fitstop may (i) designate a Designated Territory wherein the franchisee must locate and secure a Premises, and (ii) adjust the boundaries of the Designated Territory to a comparable geographical region that immediately surrounds the Premises. Fitstop will provide this information in writing as part of their response to the franchisee's site proposal, allowing the franchisee to evaluate the proposed site before securing it, if Fitstop determines it appropriate.
This approach allows Fitstop to guide franchisees towards suitable locations while retaining some flexibility in defining the territory based on the chosen site. This is particularly useful in ensuring that the territory aligns well with the actual location's demographics and market conditions. However, the franchisee should carefully consider the implications of having the territory boundaries adjusted after the site is chosen, as this could impact the potential customer base and overall business strategy.
It is important for prospective Fitstop franchisees to understand that Fitstop retains significant rights within and outside the Designated Territory. Fitstop can operate or license others to operate System Businesses in non-traditional venues within the Designated Territory, meaning the franchisee's territory is not exclusive. Franchisees should also be aware that Fitstop reserves the right to market and sell similar products and services under different trademarks, and to use alternative distribution channels, which could create competition for the franchisee.