Is the Fly Fitness agreement personally binding on the Developer's heirs?
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.
- 6.6 Death or Permanent Disability. The grant of rights under this Agreement is personal to 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. A transfer under this Section 6.6, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 6 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 6.5 above. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Developer's Fly Fitness outlet(s) and remaining development schedule during the six (6)-month period from its onset.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the agreement is personally binding on the Developer and their heirs. Specifically, Section 11.2 states that the agreement benefits and binds the Developer, their heirs, executors, administrators, successors, and assigns. However, this does not allow the Developer to transfer their interest in the agreement, except as outlined in Article 6.
This means that upon the Developer's death, the obligations and benefits of the Fly Fitness agreement extend to their heirs. The heirs would be responsible for upholding the terms of the agreement, and would also be entitled to any benefits it provides, subject to the restrictions on transfer outlined in Article 6.
However, Section 6.6 clarifies that upon the death or permanent disability of the Developer, their interest in the agreement must be transferred within six months to a third party approved by Fly Fitness. Failure to do so constitutes a material default, leading to termination of the agreement. This transfer, including by inheritance, is subject to the conditions for transfers in Article 6 and Section 6.5, unless transferred by gift, devise, or inheritance.
In practical terms, this means that while the agreement initially binds the heirs, they cannot simply step into the Developer's role and continue operating the Fly Fitness business indefinitely. They must find an approved third party to take over the agreement within six months, or risk losing the franchise. This ensures that Fly Fitness maintains control over who operates its franchises, even in the event of the original Developer's death or disability.