Who bears the expense of Trade Dress Modifications for a Fly Fitness franchise?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
d to, the adoption and use of new exterior building designs, new interior decors, new color schemes, new or modified marks, and new furnishings (collectively, "Trade Dress Modifications").
- 9.4.2. As a condition to renew this Agreement and as otherwise requested by Franchisor no more than once in a thirty-six (36)-month period, Franchisee shall refurbish the Franchised Business location at Franchisee's sole expense, as required by Franchisor, to conform to Trade Dress Modifications. This includes, without limitation, structural changes, remodeling, redecoration, and modifications to existing improvements. Notwithstanding the foregoing restriction on the frequency of Trade Dress Modifications, Franchisee, upon notice by Franchisor and in accordance with Section 14.6 hereof, shall immediately discontinue the use of any Mark that is no longer desirable or available to Franchisor and substitute a different Mark or Marks as Franchisor directs.
- 9.4.3. Franchisee will accept, use, and display any such Trade Dress Modifications as if they were a part of this Franchise Agreement at the time of execution hereof.
- 9.5. No Liability/Waiver of Claims. Franchisor shall not be liable to Franchisee for any expenses, losses or damages sustained by Franchisee as a result of any of the modifications, including Trade Dress Modifications, required by this Article 9. Franchisee hereby covenants not to commence or join in any litigation or other proceeding against Franchisor or any third party, complaining of any such or seeking expenses, losses or damages caused thereby.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchisee is responsible for the expenses associated with trade dress modifications. As a condition of renewing the franchise agreement, the franchisee must refurbish the franchised business location at their own expense to comply with any trade dress modifications required by Fly Fitness. These modifications can include structural changes, remodeling, redecoration, and alterations to existing improvements. Fly Fitness may request these changes no more than once in any 36-month period.
Fly Fitness is not liable to the franchisee for any expenses, losses, or damages resulting from these required modifications, including trade dress modifications. The franchisee agrees not to initiate or participate in any legal proceedings against Fly Fitness or any third party, seeking compensation for expenses, losses, or damages caused by these modifications. The franchisee also waives any claims related to these modifications, including claims of breach of contract, breach of fiduciary duty, fraud, or breach of the implied covenant of good faith and fair dealing.
This means that a Fly Fitness franchisee must be prepared to invest in periodic updates to their location's appearance to keep it aligned with the current brand standards. These costs can potentially be significant, especially if structural changes are required. The franchisee bears the full financial burden of these updates, with no recourse for reimbursement from Fly Fitness. This is a fairly standard practice in franchising, as maintaining a consistent brand image is seen as crucial to the overall success of the franchise system, but it is important for prospective franchisees to understand and budget for these potential expenses.