What is the condition for Fly Fitness to relinquish control of the Franchised Business back to the franchisee after a default?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
In the event of a default by Franchisee, in addition to Franchisor's right to terminate the Franchise Agreement, and not in lieu thereof, Franchisor reserves the right with five (5) days' prior written notice to Franchisee to direct suppliers to stop
furnishing any and all products and supplies until such time as Franchisee's default is cured. In no event shall Franchisee have recourse against Franchisor for loss of revenue, customer goodwill, profits or other business arising from Franchisor's actions and the actions of suppliers.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
Based on the 2024 Fly Fitness Franchise Disclosure Document, the document does not explicitly state the conditions under which Fly Fitness would relinquish control of a franchised business back to the franchisee after a default. However, it does outline the circumstances under which Fly Fitness can take certain actions in the event of a franchisee's default, such as directing suppliers to stop furnishing products and supplies.
Item 22 of the FDD outlines several conditions related to the termination, expiration, and renewal of the franchise agreement, as well as the franchisee's obligations upon termination. These include ceasing operation of the franchised business, discontinuing the use of Fly Fitness's intellectual property, and fulfilling financial obligations. While these sections detail the responsibilities of the franchisee and the rights of Fly Fitness in the event of a default or termination, they do not specify a process for the franchisee to regain control after a default has occurred.
A prospective Fly Fitness franchisee should seek clarification from the franchisor regarding the specific conditions and procedures for reinstating control of the franchised business following a default. Understanding these conditions is crucial for assessing the risks and potential remedies associated with a default situation during the franchise term.