Does the Fly Fitness agreement state that the developer covenants that, during the term of this Agreement, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of, or in conjunction with, any person or entity divert, or attempt to divert, any business or customer of any Franchised Business to be developed hereunder or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.3 Noncompetition Covenants. Developer acknowledges that, pursuant to this Agreement, Developer will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training, and experience of Developer. Developer acknowledges that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to him or her in the development and operation of Franchised Businesses, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Developer is entering into this Agreement. In consideration for such specialized training, trade secrets, Confidential Information and rights, Developer covenants that, except as otherwise approved in writing by Franchisor:
- 8.3.1 During the term of this Agreement, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of any Franchised Business to be developed hereunder 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 restaurant or eatery business similar to the System ("Competitive Business"); or (iii) seek to employ any person who is at that time employed by Franchisor; 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
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the developer does covenant not to divert business or customers to competitors during the term of the agreement. Specifically, during the agreement's term, the developer is prohibited from diverting or attempting to divert any business or customer of any franchised business or other franchisees in the Fly Fitness system to any competitor, whether through direct or indirect methods. This restriction is in place to protect the Fly Fitness brand and its franchisees from unfair competition.
This covenant is part of broader non-competition agreements outlined in the FDD. The developer acknowledges that they will receive valuable training, trade secrets, and confidential information that provide a competitive advantage. In return for this access, the developer agrees to certain non-competition restrictions.
The Fly Fitness agreement also specifies that after the agreement expires or terminates, the developer is restricted from certain competitive activities for 24 months. These activities include diverting business, participating in a similar business within 10 miles of the territory or any Fly Fitness location, seeking to employ Fly Fitness personnel, or taking any action that could harm the goodwill associated with the Fly Fitness brand. These restrictions are designed to protect Fly Fitness's market position and confidential information even after the developer's formal association with the franchise ends.