Under what conditions can Fitstop terminate the Franchise Agreement if the lease is terminated?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.3.4 You will be liable to pay all amounts owing in connection with the Lease and Premises governed thereby, and your failure to cure any defaults you have with respect to Tenant's (or its guarantors) monetary or non-monetary obligations under the Lease within the applicable cure periods set forth therein shall constitute a material default and, if the Lease is terminated or subject to termination, grounds for immediate termination of this Agreement by us upon written notice to you.
- 9.3.5 Where you have entered into a lease in respect of the Premises: (1) we may at any time during the Term notify you in writing that we require you to assign the lease of the Premises to us or our nominee; and (2) you must within seven (7) calendar days of such request assign the lease of the Premises to us or our nominee and sign all documents and take all necessary steps to effect the assignment of the lease of the Premises.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop can terminate the Franchise Agreement immediately if the franchisee fails to address any defaults related to their monetary or non-monetary obligations under the lease within the specified cure periods. This is contingent upon the lease being terminated or subject to termination due to these uncured defaults. This clause emphasizes the critical importance of adhering to the lease terms, as any failure to meet these obligations can have severe repercussions, including the termination of the Franchise Agreement.
Fitstop also requires franchisees to ensure that their lease contains specific provisions and covenants outlined in Section 9.3 of the FDD or designated in the manuals. These provisions are subject to Fitstop's review and approval, giving Fitstop control over the lease terms. Franchisees are responsible for all costs associated with changes to the premises or lease, including amendments, assignments, or renewals requested by the franchisee, landlord, or licensor.
Furthermore, Fitstop retains the right to request an assignment of the lease to themselves or their nominee at any time during the term of the agreement, requiring the franchisee to comply within seven calendar days. This provision allows Fitstop to maintain control over the location of the franchise, which is a common practice in franchising to protect brand consistency and operational standards. The franchisee's failure to comply with these lease-related obligations constitutes a material default, potentially leading to the termination of the Franchise Agreement.