Does Punch King Fitness guarantee the success of a site based on its approval?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5. Within sixty (60) days after the execution of the Franchise Agreement, Franchisee shall submit to Franchisor, in a form specified by Franchisor, a completed site approval package, which shall include a site approval form prescribed by Franchisor, an option contract, a letter of intent, or other evidence satisfactory to Franchisor which describes Franchisee's favorable prospects for obtaining such site, photographs of the site, demographic statistics, and such other information or materials as Franchisor may reasonably require (collectively, the SAP).
Franchisee acknowledges that time is of the essence.
Franchisor shall have thirty (30) days after receipt of the SAP from Franchisee to approve or disapprove, in its sole discretion, the proposed site for the Franchised Business.
In the event Franchisor does not approve a proposed site by written notice to Franchisee within said thirty (30) days, such site shall be deemed disapproved by Franchisor.
6. Franchisor shall furnish to Franchisee the following:
(a) For your Site, we provide building specifications for your real property space, we review your design plans, you must retain a licensed architect, and you must obtain a feasibility study prepared by a qualified third party;
(b) Such on-site evaluation as Franchisor may deem advisable in response to Franchisee's requests for site approval; provided, however, that Franchisor shall not provide on-site evaluation for any proposed site prior to the receipt of a completed SAP for such site prepared by Franchisee pursuant to this Addendum above.
If the on-site evaluation is deemed necessary and appropriate by Franchisor, Franchisor shall, at no charge to Franchisee, conduct: (a) up to two (2) on-site evaluations if the Franchised Business is the first Punch King Fitness Franchised Business to be developed by Franchisee, or (b) one (1) on-site evaluation if Franchisee has opened a Punch King Fitness Franchised Business prior to the Franchised Business.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
Based on the 2024 Punch King Fitness Franchise Disclosure Document, while Punch King Fitness does retain approval rights over the franchisee's proposed site, they do not guarantee the success of the location. Franchisees must submit a site approval package (SAP) to Punch King Fitness within 60 days of executing the Franchise Agreement. This package includes a site approval form, evidence of favorable prospects for obtaining the site (like an option contract or letter of intent), photographs, demographic statistics, and any other information Punch King Fitness may require. Punch King Fitness then has 30 days to approve or disapprove the site, and failure to provide written notice within that timeframe results in automatic disapproval.
Punch King Fitness provides building specifications and reviews design plans, but the franchisee must retain a licensed architect and obtain a feasibility study from a qualified third party. Punch King Fitness may also conduct on-site evaluations, offering up to two evaluations for first-time franchisees and one for those who have previously opened a Punch King Fitness location.
While Punch King Fitness offers guidance and support in site selection, the ultimate responsibility for the site's success rests with the franchisee. The approval process is designed to ensure the site meets Punch King Fitness's standards and has the potential for success, but market conditions, competition, and the franchisee's operational capabilities all play a significant role in determining the actual outcome.
Prospective franchisees should carefully consider these factors and conduct their own due diligence to assess the suitability of any proposed location. It would be prudent to ask Punch King Fitness about the criteria they use to evaluate sites and what support they offer to help franchisees maximize their chances of success.