third
Third, you
may have other
agreements with the
franchisor that entitle
you to receive changes to the“standard”
form of franchise agreement. As it relates to
the Planet Fitness system (and a number of
other franchise systems), most franchisees
executing a franchise agreement are doing
so pursuant to an area development agreement. That area development agreement
may contain specific language giving the
franchisee rights not found in the“standard”form of the franchise agreement. For
example, the area development agreement
might contain a provision requiring your
franchisor to offer you a franchise agreement
with a“sliding scale”royalty, or it might
grant you the right to receive special rights
related to transfers, territorial protection,
etc. Similarly, in the event you are signing a
renewal franchise agreement, it is important
to understand what your existing agreement
says about the form of franchise agreement
you will be required to sign. For example,
does it say that you are required to sign the
then-current form of franchise agreement
without restriction, or do you have the right
to sign a form of franchise agreement
that will contain the same royalty rate or
the same territorial protection? Accordingly, not only is it important for an
attorney to review the new agreement you
are being asked to sign, you probably also
want the attorney to review the pertinent
provisions of your existing agreements to see
whether you might have additional rights.
According to Planet Fitness’s 2015
FDD, the estimated initial investment
required to open a new Planet Fitness franchise ranges from $728,290 to $3,777,800.
Despite this significant investment, many
prospective franchisees simply make the
decision not to hire an attorney to review
their franchise agre