For Fly Fitness, what condition must be satisfied or waived before the Developer is required to execute an additional Franchise Agreement for each subsequent Franchised Business?

According to Fly Fitness's 2024 Franchise Disclosure Document, after signing the initial Franchise Agreement, a Developer must satisfy or waive all conditions outlined in Section 5.4 of the agreement. Specifically, the Developer is required to execute an additional Franchise Agreement for the development of the second Franchised Business once a lease is executed for the first Franchised Business. This process repeats for each subsequent Franchised Business, contingent upon satisfying or waiving the conditions in Section 5.4 and upon the execution of a lease for each subsequent location.

This means that a Fly Fitness developer must secure a lease for each location before being obligated to sign the corresponding Franchise Agreement. This provides a degree of security for the developer, as they are not locked into a Franchise Agreement without a confirmed location. However, it also places the onus on the developer to actively find and secure suitable locations to maintain their development schedule.

The Mandatory Development Schedule dictates the timeline for opening Franchised Businesses. Meeting this schedule is crucial, as it directly ties into the obligation to execute additional Franchise Agreements. A prospective developer should carefully review Section 5.4 to understand all conditions that must be met or waived, as these conditions directly impact their ability to expand within the Development Area.

It is important for potential Fly Fitness developers to understand the interplay between securing leases, meeting the conditions in Section 5.4, and adhering to the Mandatory Development Schedule. Failing to meet these requirements could impact the developer's ability to expand and fully realize the development rights granted in the agreement.