According to the Fly Fitness agreement, what constitutes a 'Transfer'?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.6 Death or Permanent Disability. The grant of rights under this Agreement is personal to Developer, and on the death or permanent disability of Developer, the executor, administrator, conservator, or other personal representative of Developer shall be required to transfer Developer's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor. Failure to transfer in accordance with the forgoing will constitute a material default and all that is granted by this Agreement will terminate. A transfer under this Section 6.6, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 6 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 6.5 above. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Developer's Fly Fitness outlet(s) and remaining development schedule during the six (6)-month period from its onset.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a 'Transfer' occurs when the Developer's interest in the agreement is transferred due to death or permanent disability. The agreement specifies that upon the death or permanent disability of the Developer, their interest must be transferred to a third party approved by Fly Fitness within six months. Failure to do so constitutes a material default, leading to the termination of the agreement.
The FDD specifies that this transfer includes, without limitation, transfer by devise or inheritance, and is subject to the conditions for Transfers in Article 6 of the agreement. Unless transferred by gift, devise, or inheritance, the terms of Section 6.5 apply. The agreement defines 'permanent disability' as a mental or physical condition that prevents the Developer from providing continuous and material supervision of the Fly Fitness outlet(s) and remaining development schedule during a six-month period from its onset.
This clause ensures that Fly Fitness maintains control over who operates its franchises, even in unforeseen circumstances such as the death or disability of the original franchisee. The requirement for transfer within six months and approval by Fly Fitness protects the brand's standards and operational consistency. Prospective franchisees should understand these conditions, as they dictate how the business must be handled in the event of death or permanent disability, including the potential need for an interim successor manager approved by Fly Fitness.