What is the dependency between the Fly Fitness Development Agreement and the execution of a Franchise Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
5.1 Valid Exercise. Developer shall exercise the development rights granted hereunder only by entering into a separate Franchise Agreement with Franchisor for each Franchised Business for which a development right is granted. Developer shall execute and deliver to Franchisor, concurrently with the execution and delivery of this Agreement, Franchisor's current form of Franchise Agreement for the first Franchised Business to be established by Developer pursuant to the Mandatory Development Schedule. For each subsequent Franchised Business to be established hereunder, Developer shall execute and deliver to Franchisor Franchisor's then-current form of Franchise Agreement, which shall be presented to Developer together with Franchisor's then-current Franchise Disclosure Document. The then-current form of Franchise Agreement may differ from the current form of Franchise Agreement. Further, Developer acknowledges and agrees that Developer shall not receive any initial training related to each additional Franchised Business. Developer hereby waives all obligations by Franchisor to provide any training to Developer contained in each Franchise Agreement, other than the initial Franchise Agreement executed concurrently with this Agreement, by and between Franchisor and Developer. Developer hereby acknowledges and agrees that the training Developer receives pursuant
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the Development Agreement is directly linked to the execution of a Franchise Agreement. Specifically, to exercise the development rights granted, a developer must enter into a separate Franchise Agreement with Fly Fitness for each franchised business they intend to develop.
The FDD states that concurrent with signing the Development Agreement, the developer must also execute Fly Fitness's current form of Franchise Agreement for the first franchised business. For each subsequent Fly Fitness location, the developer will execute the then-current Franchise Agreement, which may differ from the initial agreement. This subsequent agreement will be presented alongside Fly Fitness's then-current Franchise Disclosure Document.
This arrangement ensures that Fly Fitness maintains control over its brand and standards as the developer expands. It also means that the developer is obligated to open and operate the franchised businesses according to a pre-determined schedule, as outlined in the Mandatory Development Schedule. The developer also acknowledges that they will not receive any initial training related to each additional Franchised Business, other than the initial Franchise Agreement executed concurrently with the Development Agreement, and that the initial training is sufficient to allow the developer to construct, equip, open and operate each of Developer's Franchised Businesses in the Development Area.