What outstanding obligations can prevent a Pump It Up franchisee from transferring their franchise?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
(f) you have corrected any existing deficiencies of the Franchised Business of which we have notified you, and/or the proposed transferee agrees to upgrade, remodel, and refurbish the Franchised Business in accordance with 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.
The Transfer Fee will be waived if the proposed transferee: (1) is an Entity formed by you for the convenience of ownership as set forth in Section 16.C.; or (2) has obtained the Franchised Business as a result of your death or permanent incapacity as provided in Section 16.D.;
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, several obligations must be met before a franchise can be successfully transferred. The franchisee must correct any existing business deficiencies that Pump It Up has notified them about. Alternatively, the proposed transferee can agree to upgrade, remodel, and refurbish the franchised business according to Pump It Up's current standards and within a specified timeframe. Pump It Up will inform the proposed transferee of the required actions and deadlines before the transfer's effective date.
If the current franchisee or their owners finance any part of the sale to the proposed transferee, they must agree that the transferee's obligations under any financial agreements are subordinate to the transferee's obligation to pay royalties, brand fund contributions, and other amounts due to Pump It Up, its affiliates, and third-party vendors. The transferring franchisee and their owners must also sign a general release, in a form satisfactory to Pump It Up, releasing any and all claims against Pump It Up and its affiliates, officers, directors, employees, and agents.
Prior to the transfer, the franchisee may also be required to modify or upgrade certain equipment, safety features, and computer hardware or software to meet Pump It Up's then-current standards. Additionally, either the current franchisee or the proposed transferee must pay Pump It Up the balance of the transfer fee to cover the expenses associated with reviewing the transfer. The transfer fee is waived if the transferee is an entity formed by the franchisee for convenience of ownership or if the business was obtained due to the franchisee's death or permanent incapacity. These stipulations ensure that the Pump It Up franchise maintains its standards and protects its interests during ownership transitions.