Does the Fly Fitness agreement prevent franchisees from employing or soliciting employees of the franchisor or other franchisees during the term of the agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
In consideration for such specialized training, trade secrets, Confidential Information and rights, Franchisee, and Principal(s) covenant that, except as otherwise approved in writing by Franchisor:
19.5.1 During the term of this Agreement, 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; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any fitness or exercise business similar to the System; or (iii) seek to employ any person who is at that time employed by Franchisor or by any other System franchisee, or otherwise induce such person to leave his or her employment; or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Fly Fitness franchisees or Franchisor-affiliated outlets.
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 are restricted from soliciting or employing individuals employed by Fly Fitness or its other franchisees during the term of the agreement. Specifically, during the agreement term, franchisees are prohibited from seeking to employ anyone employed by Fly Fitness or another franchisee within the Fly Fitness system, or from inducing them to leave their employment.
This restriction is part of a broader set of covenants designed to protect Fly Fitness's interests. These covenants also prevent franchisees from diverting business or customers to competitors and from participating in similar fitness businesses. These measures aim to maintain the integrity of the Fly Fitness system and protect its goodwill.
After the agreement expires or terminates, a similar restriction applies for 24 months. During this post-term period, franchisees cannot seek to employ individuals employed by Fly Fitness or its franchisees. This extended restriction ensures continued protection for Fly Fitness even after the franchise agreement concludes.
These non-solicitation clauses are common in franchising to prevent franchisees from poaching talent and disrupting the network. Prospective Fly Fitness franchisees should understand these limitations and factor them into their staffing and business strategies.