After the Fly Fitness agreement terminates, for how many months is the Developer restricted from diverting business or customers to a competitor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
8.3.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, 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 the Franchised Businesses to be developed hereunder 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 Competitive Business within ten (10) miles of the Territory or any Fly Fitness; or (iii) seek to employ any person who is at that time employed by Franchisor, 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 Fitnessfranchisees.
8.4 Reasonableness of Restrictions.
Developer acknowledges and agrees that the covenants not to compete set forth in this Agreement are fair and reasonable and will not impose any undue hardship on Developer since Developer has other considerable skills, experience and education which afford Developer the opportunity to derive income from other endeavors.
- 8.5 Reduction of Time or Scope.
If the period of time or the geographic scope specified above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, following the expiration or termination of the agreement, the Developer faces certain restrictions. Specifically, for 24 months after the agreement ends, the Developer is prohibited from diverting or attempting to divert any business or customer from the Franchised Businesses or other franchisees in the System to any competitor. This includes direct or indirect inducement.
Additionally, during this 24-month period, the Developer cannot participate as an owner, partner, director, officer, employee, consultant, or agent in any Competitive Business within ten miles of the Territory or any Fly Fitness location. The Developer is also barred from seeking to employ anyone currently employed by Fly Fitness or inducing them to leave their employment. Furthermore, the Developer must not perform any action that could harm the goodwill associated with the Marks and the System or interfere with the business of Fly Fitness or its franchisees.
Fly Fitness emphasizes the reasonableness of these non-compete covenants, asserting that they do not impose undue hardship on the Developer. The rationale is that the Developer possesses other skills, experience, and education that allow them to earn income from other ventures. However, if any of these restrictions regarding time or scope are deemed unreasonable in a legal proceeding, the terms will be reduced to what is considered reasonable by the adjudicating body.