Can Fly Fitness assign its option to purchase assets to another party?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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 Franchisee'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, Franchisee 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) merge, acquire other corporations, or be acquired by another corporation, including competitors; (iv) undertake a refinancing, recapitalization, leveraged buy-out or other economic or financial restructuring; and (v) with regard to any or all of the above sales, assignments and dispositions, Franchisee expressly and specifically waives any claims, demands or damages arising from or relating to the loss of association with or identification of Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to assign the Franchise Agreement to another entity without the franchisee's permission. Specifically, Fly Fitness can sell its assets and rights to the Marks and the System to a third party.
Fly Fitness can also engage in a public or private placement of its securities, merge with or acquire other corporations (including competitors), or undergo financial restructuring. The franchisee waives any claims related to the loss of association with Fly Fitness due to these actions.
This means a prospective Fly Fitness franchisee should be aware that the brand could be sold or change ownership, potentially impacting the franchise's operations and support. However, the new entity must agree to perform Fly Fitness's obligations under the agreement.