After the Fly Fitness agreement expires or terminates, does the Fly Fitness agreement prevent franchisees from employing or soliciting employees of the franchisor or other franchisees?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Franchisee and Principal(s) shall not, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any fitness or exercise business within ten (10) miles of the Territory or any Fly Fitness location; or (iii) seek to employ any person who is at that time employed by Franchisor or by any other System franchisee, or otherwise induce
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, after the franchise agreement expires or terminates, a franchisee and its principals are restricted from soliciting or employing individuals employed by Fly Fitness or other Fly Fitness franchisees. This restriction lasts for 24 months following the agreement's expiration or termination.
This post-termination restriction means that for two years after leaving the Fly Fitness system, a former franchisee cannot actively try to hire away employees from either the Fly Fitness franchisor or any other existing Fly Fitness franchise. This is designed to protect the stability of the Fly Fitness network by preventing franchisees from poaching talent and potentially disrupting operations at other locations.
Such clauses are common in franchise agreements to protect the franchisor's and other franchisees' investment in training and employee development. Prospective Fly Fitness franchisees should be aware of this limitation as it could impact their ability to staff a new, competing business after their franchise agreement ends. They should factor this into their long-term business plans and consider the potential costs associated with recruiting new employees who are not currently affiliated with Fly Fitness.