Can Fly Fitness or its affiliates operate other kinds of businesses within a Fly Fitness franchisee's territory?

According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness or its affiliates retain the right to operate other kinds of businesses within a franchisee's territory. Specifically, Fly Fitness states that they "reserve all rights not expressly granted in the Franchise Agreement." This means that while a franchisee is granted the right to operate a Fly Fitness outlet in their territory, Fly Fitness maintains control over other business ventures.

Fly Fitness clarifies that they or their affiliates "may own, acquire, conduct, or authorize others to conduct, any form of business at any location selling any type of product or service not offered under the Marks, including a product or service similar to those you will sell at your Franchised Business." However, Fly Fitness assures that they "will not convert any acquired business in your Territory to a franchise using our primary trademarks during the Term of your Franchise Agreement."

Furthermore, Fly Fitness and its affiliates can sell products and services under the Fly Fitness brand through alternative distribution channels such as retail outlets (including grocery stores), captive market locations (airports and malls), and the Internet, without providing any compensation to the franchisee. The franchisee is restricted to soliciting sales only from customers within their designated territory and cannot utilize alternative distribution channels to make sales outside of it. This reservation of rights gives Fly Fitness considerable latitude to pursue other business opportunities, even those that might compete with its franchisees, subject to the limited protection that Fly Fitness will not convert an acquired business in the franchisee's territory to a Fly Fitness franchise during the term of the agreement.