In the Fly Fitness agreement, what is the relationship between the Developer and the Franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.1 Independent Licensee. Developer is and shall be an independent licensee under this Agreement, and no partnership shall exist between Developer and Franchisor. This Agreement does not constitute Developer as an agent, legal representative, or employee of Franchisor for any purpose whatsoever, and Developer is not granted any right or authority to assume or create any obligation for or on behalf of, or in the name of, or in any way to bind Franchisor. Developer agrees not to incur or contract any debt or obligation on behalf of Franchisor or commit any act, make any representation, or advertise in any manner which may adversely affect any right of Franchisor or be detrimental to Franchisor or other developers or franchisees of Franchisor. Pursuant to the above, Developer agrees to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorneys' fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs or judgments against Franchisor arising out of the relationship hereby established which specifically, but not exclusively, includes costs, losses, expenses, attorneys fees relative to assignment or the transfer of right to develop and transactional costs relative thereto, defaults under any leases, subleases, notes, receipt of revenues or any other relationships arising directly or indirectly out of the development and operation of the Fly Fitness outlets.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the agreement specifies that the Developer is an independent licensee, and no partnership exists between the Developer and Fly Fitness. The agreement explicitly states that the Developer is not an agent, legal representative, or employee of Fly Fitness for any purpose. The Developer has no right to assume or create any obligation on behalf of Fly Fitness.
This means that the Developer operates their Fly Fitness business independently and is responsible for all debts, obligations, and liabilities incurred in its operation. The Developer must indemnify Fly Fitness and hold it harmless from any liability, losses, attorney's fees, or damages resulting from claims, demands, taxes, costs, or judgments against Fly Fitness arising out of their relationship. This includes costs related to the transfer of development rights, transactional costs, defaults under leases, and revenue receipts.
This independent contractor relationship is typical in franchising, where franchisees operate their businesses independently while adhering to the franchisor's system and standards. The franchisee benefits from using the established brand and system, while the franchisor maintains control over its brand and standards without being directly liable for the franchisee's business operations. Prospective Fly Fitness developers should understand that they are assuming the full risk and responsibility for their business's financial and legal obligations.