What is considered a 'Transfer' of the Fly Fitness Franchise Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 the 2024 Fly Fitness Franchise Disclosure Document, a "Transfer" includes any direct or indirect action by the developer to sell, assign, transfer, give, devise, convey, or encumber the Multi-Unit Development Agreement or any rights or interests within it. This also encompasses allowing such actions to occur by operation of law.
For a Fly Fitness franchisee, this means that any change in ownership or control of the development agreement, whether voluntary or involuntary, is considered a transfer. This broad definition ensures that Fly Fitness retains control over who is developing and operating Fly Fitness franchises.
The Fly Fitness FDD specifies that no transfer can occur without the prior written approval of Fly Fitness. If a transfer occurs without this approval, Fly Fitness has the right to void the transfer, meaning the new party would not be recognized as a legitimate franchisee. This requirement protects Fly Fitness's interests by ensuring that any new franchisee meets their standards and is capable of fulfilling the obligations of the development agreement.