Does the Pump It Up franchise agreement allow for third-party beneficiaries?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the sole right to enforce the obligations of franchisees who contribute to the Brand Fund, and neither you nor any other franchisees who contribute to the Brand Fund will be deemed a third-party beneficiary with respect to the Brand Fund obligations of other franchisees or have any right to enforce the obligation of any franchisee to contribute to the Brand Fund.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to the 2025 Pump It Up Franchise Disclosure Document, franchisees are not considered third-party beneficiaries with respect to the Brand Fund obligations of other franchisees. This means that individual Pump It Up franchisees do not have the right to enforce the obligation of any other franchisee to contribute to the Brand Fund. The franchisor retains the sole right to enforce these obligations.
This stipulation clarifies the relationship between Pump It Up franchisees and the Brand Fund. While franchisees contribute to the Brand Fund, they cannot take legal action against other franchisees who may be delinquent in their contributions. This ensures that Pump It Up maintains control over the Brand Fund and its enforcement mechanisms.
This arrangement is fairly common in franchising, as it centralizes control and avoids potential conflicts between franchisees regarding fund contributions. Prospective Pump It Up franchisees should understand that their contributions to the Brand Fund are primarily managed and enforced by the franchisor, not by their fellow franchisees.