After the Fly Fitness agreement expires or terminates, for how long are franchisees restricted from operating a similar business?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 19.5.2.
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, franchisees and their principals face certain restrictions after the franchise agreement expires or terminates. Specifically, for a period of 24 months following the expiration or termination of the agreement, they are restricted from engaging in any fitness or exercise business within a 10-mile radius of their former Fly Fitness territory or any other Fly Fitness location. This restriction applies whether they are acting directly or indirectly, or on behalf of another entity.
This post-term non-compete clause prevents former franchisees from leveraging the knowledge, training, and confidential information gained during their time with Fly Fitness to unfairly compete with the franchise system. It aims to protect Fly Fitness's market share and the interests of its existing franchisees. The restriction covers various roles, including owner, partner, director, officer, employee, consultant, or agent, ensuring a broad scope of prohibited activities.
Furthermore, during this 24-month period, former franchisees and principals are prohibited from diverting or attempting to divert any business or customers from the franchised business or other franchisees within the Fly Fitness system. They are also barred from soliciting or employing anyone who is currently employed by Fly Fitness or any other franchisee within the system. These measures are designed to prevent the poaching of customers and employees, which could harm the Fly Fitness business and its franchisees.
Prospective Fly Fitness franchisees should carefully consider these post-termination restrictions and how they might impact their future business opportunities. It is important to understand the geographic scope and duration of the non-compete clause, as well as the types of activities that are prohibited. Franchisees should also be aware that these restrictions apply not only to them but also to their principals, which may include owners, partners, or other key individuals involved in the franchise.