Does Punch King Fitness's site approval constitute a warranty as to the suitability of the site?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 1. Within 1 month after the execution of the Franchise Agreement (the Site Selection Period), Franchisee shall acquire or lease, at Franchisee's expense, a location for the Punch King Fitness Franchised Business franchised under the Franchise Agreement (the Franchised Business) at a site approved by Franchisor as hereinafter provided.
Such location shall be within the following area: __________________________ (the Site Selection Territory).
The Site Selection Territory is described solely for the purpose of selecting a site for the Franchised Business.
- 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.
- 4. If Franchisee occupies the Site of the Franchised Business under a lease or sublease, Franchisee shall, prior to the execution thereof, submit such lease to Franchisor for its written approval.
Franchisor's approval of the lease or sublease may be conditioned upon the inclusion of such provisions as Franchisor may reasonably require, including, without limitation:
(a) A provision that restricts the use of the Site solely to the operation of the Franchised Business;
(b) The lessor will consent to Franchisee's use of such Marks and signage as Franchisor may prescribe for the Franchised Business;
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, the excerpts provided do not explicitly state whether Punch King Fitness's site approval constitutes a warranty as to the suitability of the site. However, the document does outline the site selection process. The franchisee must acquire or lease a location for the Punch King Fitness business within a specified Site Selection Period, subject to the franchisor's approval. The franchisee needs to submit a site approval package (SAP) to Punch King Fitness, including an approval form, option contract, letter of intent, site photographs, demographic statistics, and other required information. Punch King Fitness then has 30 days to approve or disapprove the proposed site.
Punch King Fitness provides building specifications and reviews design plans, and 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, with the number of evaluations depending on whether the franchisee is opening their first Punch King Fitness location. The franchisor's approval of a lease or sublease may be conditional, including restrictions on site use and consent for the franchisee's use of marks and signage.
While Punch King Fitness provides guidance and approval in the site selection process, the FDD excerpts do not clarify whether this approval acts as a warranty regarding the site's suitability. A prospective franchisee should clarify with Punch King Fitness whether their site approval implies any warranty or guarantee regarding the location's potential success or suitability for the business. This information is crucial for understanding the level of risk and responsibility the franchisee assumes in the site selection process.