What must the By-Laws or Operating Agreement of a Fly Fitness franchisee entity state regarding the issuance and assignment of interests?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.2.
Restrictions on Transfers by Franchisee.
Franchisee's rights and duties under this Agreement are personal to Franchisee as it is organized and with the Principals of the business as they exist on the date of execution of this Agreement, and Franchisor has made this Agreement with Franchisee in reliance on Franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of Franchisee.
Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval.
Franchisor may void any transfer made without such approval.
- 16.3.
Transfers by Franchisee.
Franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber this Agreement or any right or interest herein or hereunder (a "Transfer"), the Franchise, the Franchised Business, or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless it first obtains the written consent of Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
Based on the 2024 Fly Fitness Franchise Disclosure Document, the franchisee's rights and duties under the agreement are personal to the franchisee as it is organized and with the principals of the business as they exist on the date of execution of the agreement. Fly Fitness has made the agreement with the franchisee in reliance on their perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of the franchisee.
Therefore, according to the FDD, no transfer, as defined in the franchise agreement, may be made without Fly Fitness's prior written approval. Fly Fitness may void any transfer made without such approval.
Specifically, the Fly Fitness franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber the agreement or any right or interest herein or hereunder, the franchise, the franchised business, or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless it first obtains the written consent of Fly Fitness.