Does the Fly Fitness agreement bind the successors and assigns of the Franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.2 Successors. This Agreement shall bind and inure to the benefit of the successors and assigns of Franchisor and shall be personally binding on and inure to the benefit of Developer and his or her respective heirs, executors, administrators and successors or assigns; provided, however, the foregoing provision shall not be construed to allow a transfer of any interest of Developer in this Agreement, except in accordance with Article 6 hereof.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the agreement does bind the successors and assigns of the franchisor. Specifically, the agreement is designed to benefit these successors and assigns. This means that if Fly Fitness were to be acquired or undergo a similar change in ownership, the new entity would be obligated to uphold the terms of the existing franchise agreements.
For a prospective Fly Fitness franchisee, this provides a level of assurance that the agreement will remain in effect even if the franchisor's business undergoes changes. However, the agreement is personal to the 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.
It's important to note that while the agreement binds Fly Fitness's successors, there are still conditions and limitations regarding the franchisee's ability to transfer their own interest in the agreement. These conditions are detailed in Article 6 of the agreement, which covers transfer procedures. Therefore, franchisees need to be aware of these stipulations regarding transfers and ensure compliance to maintain their rights under the agreement.