What is the definition of the 'System' according to the Fly Fitness franchise agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
12.1.5. Conduct sales in accordance with Franchisor's standards and specifications. Franchisee acknowledges and accepts that Franchisee may only engage in providing fitness instruction to end-consumers. Franchisee is expressly prohibited from selling products or services using the Franchised Business operations, assets and/or premises (i) that are not a part of the Fly Fitness System or that are not approved by Franchisor, (ii) outside of the Franchised Business premises (excluding promotional and sales events in the Territory with Franchisor's prior approval), (iii) on the internet (provided that Franchisee may conduct classregistration and payment online through Franchisor's approved platform(s)), or (iv) to dealers and/or distributors for subsequent re-sale. Engaging in such sales shall be a material default of this Agreement;
- 12.1.6. Employ only qualified individuals who are trained in accordance with Franchisor's standards and who will at all times conduct themselves in a competent and courteous manner in accordance with this Agreement and the image and reputation of the System. Within ninety (90) days of hiring, Franchisee's coaches (and Franchisee or Principal if providing fitness instruction) shall obtain personal training certifications issued by a nationally recognized organization approved by Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
Based on the 2024 Fly Fitness Franchise Disclosure Document, the term 'System' is used throughout the agreement but not explicitly defined. However, several clauses provide insight into what the 'System' encompasses.
The Fly Fitness 'System' includes the methods, standards, and specifications established by Fly Fitness for conducting sales and providing fitness instruction. Franchisees are required to conduct sales in accordance with Fly Fitness's standards and are limited to providing fitness instruction to end-consumers. They are prohibited from selling products or services that are not part of the Fly Fitness System or approved by Fly Fitness.
The 'System' also includes the training and qualification standards for employees. Franchisees must employ qualified individuals trained according to Fly Fitness's standards. Coaches must obtain personal training certifications from a nationally recognized organization approved by Fly Fitness within 90 days of hiring and maintain these certifications through continuing education.
Furthermore, the 'System' incorporates technology and online presence. Fly Fitness maintains a website providing information about the 'System', and franchisees are listed on this website. Franchisees are required to use specified software and hardware, and they must adhere to Fly Fitness's requirements for internet access and electronic communication. Fly Fitness can also require franchisees to enter into software license agreements for software used in the 'System'.