What characteristics must a proposed Fly Fitness transferee possess?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
e, convey or encumber this Agreement or any right granted or interest herein or hereunder (a "Transfer") or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless Developer first obtains the written consent of Franchisor, which Franchisor may or may not grant in Franchisor's sole discretion, and subject to the following:
- 6.3.1 The proposed transferee must be an individual of good moral character and otherwise meet Franchisor's then-applicable standards for multi-unit franchisees.
- 6.3.2 The transferee must have sufficient business experience, aptitude and financial resources to operate multiple Franchised Businesses and to comply with this Agreement;
- 6.3.3 The transferee has agreed to complete Franchisor's Initial Management Training Program to Franchisor's satisfaction;
- 6.3.4 Developer has paid all amounts owed to (i) Franchisor pursuant to this Agreement and all Franchise Agreements and other agreements between Franchisor and/or Franchisor's affiliates and Developer and (ii) third-party creditors;
- 6.3.5 The transferee has executed Franchisor's then-standard form of Multi-Unit Development Agreement, which may have terms and conditions different from this Agreement, for a term no less than the unexpired term of future development obligations due pursuant to the Mandatory Development Schedule of this Agreement;
- 6.3.6 Developer and the transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and Franchisor's officers, directors, shareholders, members and employees in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, if a developer wishes to transfer their rights and duties, the proposed transferee must meet several qualifications. The transferee must be an individual of good moral character and meet Fly Fitness's standards for multi-unit franchisees. This suggests Fly Fitness is looking for individuals with a clean background and a proven track record.
Furthermore, the transferee needs to demonstrate sufficient business experience, aptitude, and financial resources to successfully operate multiple Fly Fitness businesses and adhere to the terms of the Multi-Unit Development Agreement. This indicates that Fly Fitness prefers transferees who are not only financially stable but also possess the skills and knowledge to manage multiple locations effectively. The transferee must also agree to complete Fly Fitness's Initial Management Training Program to the company's satisfaction, ensuring they are well-versed in the Fly Fitness system and operational standards.
In addition to these qualifications, both the developer and the transferee must execute a general release of claims against Fly Fitness. The transferee must also execute Fly Fitness's then-standard form of Multi-Unit Development Agreement, which may have terms and conditions different from the original agreement, for a term no less than the unexpired term of future development obligations due pursuant to the Mandatory Development Schedule of the agreement. The developer must also ensure all outstanding payments to Fly Fitness and third-party creditors are settled before the transfer can proceed. These conditions protect Fly Fitness from potential liabilities and ensure the transferee is fully committed to the franchise system.