Under what condition is the Fitstop Franchise Agreement not binding on Fitstop USA, Inc.?

According to Fitstop's 2024 Franchise Disclosure Document, the Franchise Agreement is not binding on Fitstop USA, Inc. in the event of involuntary transfers of the agreement or the assets of the franchise. This includes transfers that occur through legal processes. Such involuntary transfers are also grounds for termination of the agreement.

This provision protects Fitstop from having its franchise agreements assigned to parties it has not approved. Involuntary transfers often arise from situations like bankruptcy, judgment liens, or other legal actions against the franchisee. Fitstop retains the right to choose its franchisees and ensure they meet the brand's standards.

For a prospective Fitstop franchisee, this means that if the franchise is subject to an involuntary transfer due to legal or financial issues, Fitstop is not obligated to honor the existing agreement. This could result in the loss of the franchise if Fitstop chooses to terminate the agreement due to the involuntary transfer. Franchisees should be aware of this clause and ensure they maintain sound financial and legal standing to avoid such situations.