What constitutes a violation of the Franchise Agreement that would prevent a Pump It Up franchise transfer?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
th our then-current requirements and specifications for Pump It Up Businesses within the time period we specify following the effective date of the Transfer (we will advise the proposed transferee before the effective date of the Transfer of the specific actions that are required and the time period within which such actions must be taken);
- (g) if you or your owners finance or intend to finance any part of the sale to the proposed transferee , you and/or your owners agree that all of the transferee's obligations under any promissory notes, agreements, or security interests reserved in the Franchised Business are subordinate to the transferee's obligation to pay Royalties, Brand Fund contributions, and other amounts due to us, our affiliates, and third-party vendors and otherwise to comply with this Agreement; you (and your transferring owners) must sign a general release, in a form satisfactory to us, which releases any and all claims against us and our affiliates, officers, directors, employees, and agents; and
- (h) you must modify and/or upgrade certain equipment, safety features, and computer hardware or software to our then-current standards prior to the closing of the proposed transfer.
- (2) If we approve a proposed Transfer, prior to the Transfer becoming effective:
- (a) you or the proposed transferee must pay to us the balance of the Transfer Fee to reimburse us for reasonable expenses associated with reviewing the Transfer.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, several conditions must be met for a franchise transfer to be approved. One key condition is that neither the franchisee nor their affiliates can be in default or violation of any agreements with Pump It Up, its affiliates, or PIU Vendors. This means any existing breaches of contract or outstanding debts could prevent the transfer from proceeding.
Additionally, the proposed transferee must meet certain requirements. They need to demonstrate the ability to secure possessory rights to the premises and may be required to upgrade, remodel, and refurbish the franchised business to meet Pump It Up's current standards. The franchisor will advise the proposed transferee of the specific actions needed and the timeframe for completion before the transfer's effective date.
Furthermore, if the franchisee or their owners are financing any part of the sale, the transferee's obligations to pay royalties, brand fund contributions, and other amounts due to Pump It Up and its vendors must take precedence over any promissory notes or security interests. The franchisee and transferring owners must also sign a general release, absolving Pump It Up and its related parties from any claims. These stipulations ensure Pump It Up's financial interests and brand standards are protected during and after the transfer.