Does the Fly Fitness agreement impose a duty on the Franchisor to exercise its powers?

According to Fly Fitness's 2024 Franchise Disclosure Document, the franchise agreement does not explicitly impose a duty on Fly Fitness to exercise its powers. Specifically, Fly Fitness retains the right to assign the agreement to another entity without the franchisee's permission. The document states that nothing in the agreement requires Fly Fitness to remain in the fitness business or offer the same products and services if it chooses to assign its rights. This indicates that Fly Fitness has considerable discretion in how it manages its business and its relationship with franchisees.

Fly Fitness also retains rights to offer other products, services, or fitness concepts under different trademarks, and to utilize alternate distribution channels within or outside the franchisee's territory. The franchisee will not receive compensation for Fly Fitness's sales through these alternate channels within their territory. This reservation of rights allows Fly Fitness to explore different business avenues without necessarily benefiting the franchisee directly.

While Fly Fitness is not obligated to actively exercise its powers in a way that directly benefits the franchisee, it is important to note that Fly Fitness agrees not to operate or authorize other franchisees to operate a Fly Fitness outlet in the franchisee's territory, as long as the franchisee is not in default of the agreement. This provides some territorial protection to the franchisee, but it is limited to the specific Fly Fitness outlet and does not extend to other potential business activities Fly Fitness may undertake.