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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 9721
Experience:  30 years of corporate, litigation and international law
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I am buying the liquid assets and member lists of a franchise

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I am buying the liquid assets and member lists of a franchise fitness center that is closing. I am not buying into the franchise but intend to run a private center. Will it be legal to buy the current memberships and continue the EFT dues collection on these? Will a letter of explanation to current members be sufficient? That way if they do not want to continue they will have the option to cancel their memberships.

bizlaw :

Do you know what benefits the members get as a result of the franchise relationship? How much of those benefits will you be continuing?


they will be enjoying the same membership benefits as they are now, namely unlimited use of the facility for a monthly dues which is deducted EFT. The membership continues until they cancel in writing. That is named in their agreement.

I had to switch out of chat as I could not see your response. If there is no other benefit the members get from the franchise such as using gyms in other cities when traveling, All you would need to do is to give them notice of the change, and a clear description in any of the benefits. I do not know whether the contracts each member signs are assignable without their permission but giving them an opt out is more than fair. Your notice should make clear that unless they opt out the electronic payments will continue and tell them how the payment will show up on their bill assuming the name changes.


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This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

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