What is the definition of 'Territory' in the Fly Fitness Franchise Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Closeouts Sample Non Disclosure Sample
ITEM 12: TERRITORY
Under the Franchise Agreement, you have the right to establish and operate one (1) Fly Fitness outlet within a territory (the "Territory"). You are required to find and obtain possession of a specific location in your Territory for your Franchised Business that meets our site selection standards and our approval. Your Territory is located in all or a portion of a listed town, city, or county, and is identified by a group of contiguous zip codes. The Territory is determined on an individual basis taking into account area demographics and population density. The minimum Territory granted is an area with a minimum population of approximately 20,000. Your Territory will be defined and attached to your Franchise Agreement as Attachment 2. If you do not yet have a location at the signing of the Franchise Agreement, you will receive a non-exclusive site search area list as Attachment 2.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
During the term of your Franchise Agreement, and provided that you are not in default of your Franchise Agreement, we will not open another Fly Fitness outlet or grant the right to anyone else to open a Fly Fitness outlet within the Territory. However, notwithstanding this limited protection right we grant to you, we reserve all rights to sell our products and services under the Marks in the Territory through alternative distribution channels, as discussed below. There is no minimum sales requirement, market penetration, or other contingency that will affect your limited protected right to operate in the Territory during the term of your Franchise Agreement, unless you are in default of your obligations to us.
You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. During the term of your Multi-Unit
Development Agreement, provided that you are not in default of your Agreement or development schedule, we will not open another Fly Fitness outlet or grant the right to anyone else to open a Fly Fitness outlet within your development area until the expiration or sooner termination of your Multi-Unit Development Agreement. However, notwithstanding this limited protection right we grant to you, we reserve all rights to sell our products and services under the Mark in the development area through alternative distribution channels, as discussed below.
You may not change the location of your Franchised Business, without our written consent, which we may withhold in our sole discretion. The conditions under which we may allow you to relocate include the following: loss of your premises not due to your default, demographics of the surrounding area, proximity to other Fly Fitness outlets, lease requirements, traffic patterns, vehicular and pedestrian access, proximity to major roads, available parking, and overall suitability. If you wish to relocate, you must identify a new location for the Franchised Business that meets our approval, in accordance with our then-current site selection procedures, within 60 days. If you do not identify a site within this time period, we may terminate the Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the 'Territory' refers to the area where a franchisee has the right to establish and operate one Fly Fitness outlet. This territory is defined as all or a portion of a listed town, city, or county, identified by a group of contiguous zip codes. The territory size is determined individually, considering area demographics and population density, with a minimum population of approximately 20,000. The specific boundaries of the Territory will be detailed in Attachment 2 of the Franchise Agreement. If a location is not yet secured when signing the Franchise Agreement, the franchisee will receive a non-exclusive site search area list as Attachment 2.
It is important to note that Fly Fitness franchisees do not receive an exclusive territory. Franchisees may face competition from other franchisees, outlets owned by Fly Fitness, other distribution channels, or competitive brands controlled by Fly Fitness. However, during the term of the Franchise Agreement, provided the franchisee is not in default, Fly Fitness will not open another outlet or grant the right to open one to anyone else within the Territory. Despite this limited protection, Fly Fitness retains the right to sell products and services under its trademarks within the Territory through alternative distribution channels, such as retail outlets, captive market locations, and the Internet.
Fly Fitness franchisees are restricted to soliciting sales only from customers within their Territory and are prohibited from using alternative distribution channels to make sales outside of it. However, Fly Fitness will include the franchisee's outlet location on its website. Local advertising efforts should primarily target customers within the Territory, although the reach of such advertising may extend beyond its boundaries. The Franchise Agreement does not grant franchisees any rights to participate in franchises, licensing programs, or other business proposals for the sale and distribution of Fly Fitness products or services through alternative distribution channels.