What is the condition for a Developer to transfer their Fly Fitness development rights?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.2 Restrictions on Transfers by Developer. Developer's rights and duties under this Agreement are personal to Developer, and Franchisor has made this Agreement with Developer in reliance on Franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of Developer. Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval. Franchisor may void any transfer made without such approval.
- 6.3 Transfers by Developer. Developer shall not directly or indirectly sell, assign, transfer, give, devise, 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;
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a Developer's rights and duties under the Multi-Unit Development Agreement are personal, and any transfer requires Fly Fitness's prior written approval. Fly Fitness may choose to grant or deny this approval at their discretion.
For a transfer to be considered, the proposed transferee must meet several conditions. First, they must be an individual of good moral character who meets Fly Fitness's standards for multi-unit franchisees. Second, the transferee must possess sufficient business experience, aptitude, and financial resources to operate multiple Fly Fitness locations and comply with the Development Agreement. Third, the transferee must complete Fly Fitness's Initial Management Training Program to the company's satisfaction.
Additionally, the Developer must have paid all outstanding amounts owed to Fly Fitness, its affiliates, and third-party creditors. Finally, the transferee must execute Fly Fitness's then-standard form of Multi-Unit Development Agreement, which may have different terms and conditions, for a term no less than the unexpired term of future development obligations under the Mandatory Development Schedule.