Can Fly Fitness assign the Franchise Agreement without the Developer's permission?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
6.1 Transfers by Franchisor.
- 6.1.1 Franchisor shall have the right to assign this Agreement, and all of Franchisor's rights and privileges hereunder, to any person, firm, corporation or other entity, without Developer's permission or prior knowledge, provided that, with respect to any assignment resulting in the subsequent performance by the assignee of Franchisor's obligations, the assignee shall expressly assume and agree to perform Franchisor's obligations hereunder. Specifically, and without limitation to the foregoing, Developer expressly affirms and agrees that Franchisor may: (i) sell Franchisor's assets and Franchisor's rights to the Marks and the System outright to a third party; (ii) engage in a public or private placement of some or all of Franchisor's securities; (iii) mer
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to assign the Development Agreement without the Developer's permission. Fly Fitness can assign the agreement to any person, firm, corporation, or other entity. However, if the assignment results in the assignee performing Fly Fitness's obligations, the assignee must expressly assume and agree to perform those obligations.
Fly Fitness specifies that it may sell its assets and rights to the Marks and the System outright to a third party. Fly Fitness can also engage in a public or private placement of some or all of its securities or merge or consolidate with another entity.
This means a prospective Fly Fitness developer could find themselves working with a completely different company or management team during the term of their agreement. While the new entity would have to uphold Fly Fitness's obligations, the developer should consider how such a change could impact their business and relationship with the franchisor.