Under what conditions must a Fitstop franchisee be in full compliance with their Franchise Agreement to transfer their franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| m. Conditions for franchisor approval of transfer | Section 15.11 | Conditions include: you must be in full compliance with your Franchise Agreement; you must pay us all amounts due; transferee and its managers must satisfactorily complete our training program; transferee executes our thencurrent form of Franchise Agreement; you or transferee must pay transfer fee; we must approve written agreements regarding transfer; you must supply us with any additional information we reasonably require regarding the transfer; you must provide, as a personal covenant to the transferee, in addition to your covenants to us, an agreement not to seek to divert business from us and/or our franchisees; and you must sign a general release and other documents we require. Please also see post-term covenants described below in this Item 17 Chart. |
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Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–47)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee must be in full compliance with their Franchise Agreement as one of the conditions for the franchisor's approval of a transfer. This means that at the time of the proposed transfer, the franchisee must have met all obligations and requirements outlined in the agreement.
In addition to being in full compliance, the franchisee must also meet other conditions to gain Fitstop's approval for the transfer. These include paying all amounts due to Fitstop, ensuring the transferee and their managers complete Fitstop's training program, and having the transferee execute Fitstop's current form of Franchise Agreement. Furthermore, either the franchisee or the transferee must pay a transfer fee, and Fitstop must approve all written agreements related to the transfer.
The franchisee must also supply any additional information Fitstop reasonably requires regarding the transfer. As a personal covenant to the transferee, the franchisee must agree not to divert business from Fitstop or its franchisees. Finally, the franchisee must sign a general release and any other documents Fitstop requires to complete the transfer process. These stipulations are typical in franchising, as franchisors want to ensure that any transfer maintains the integrity and standards of the brand.