What constitutes a non-curable default for Fly Fitness regarding late payments in a 12-month period?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 7.3.1 fails to pay when due any amounts due to Franchisor under this Agreement or any related agreement and does not correct the failure within five (5) days after written notice; provided, however, Franchisor has no obligation to give written notice of a late payment more than two (2) times in any twelve (12)–month period, and the third such late payment in any twelve (12)–month period shall be a non-curable default under Section 7.2;
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a third late payment within a 12-month period constitutes a non-curable default. This means that if a franchisee fails to pay amounts due to Fly Fitness under the Franchise Agreement or any related agreement, Fly Fitness is only obligated to provide written notice of the late payment twice within a 12-month period.
Specifically, if the franchisee fails to correct the payment within five days after receiving a written notice for the first two late payments, they have an opportunity to cure the default. However, the third late payment within that same 12-month period triggers a non-curable default, meaning Fly Fitness can terminate the agreement immediately upon notice without providing an opportunity to correct the failure.
This provision is important for prospective Fly Fitness franchisees to understand, as it highlights the importance of timely payments. Failing to manage finances and make payments on time can lead to the termination of the franchise agreement without any chance to rectify the situation after the third instance. Franchisees should ensure they have sufficient financial resources and systems in place to meet their payment obligations to avoid this situation.