What is the dependency related to the price and terms of payment in a transfer of Fly Fitness development rights?

According to Fly Fitness's 2024 Franchise Disclosure Document, the franchisor's written approval is required for the material terms and conditions of a transfer of development rights. Specifically, Fly Fitness must approve that the price and terms of payment will not adversely affect the transferee's development obligations. This approval, however, does not represent a warranty of the transferee's success or the soundness of their decision to purchase the development rights.

This means that a prospective Fly Fitness franchisee looking to transfer their development rights needs to ensure that the terms of the transfer, particularly the financial aspects, are structured in a way that the new developer can still meet the obligations outlined in the development agreement. The franchisor has the right to reject a transfer if they believe the financial terms put the new developer at risk of failing to fulfill the development schedule.

Furthermore, Fly Fitness requires that the developer provides all proposed transfer documents for the franchisor's review at least 30 days before the closing of the proposed transfer. This allows Fly Fitness ample time to assess the terms and conditions and ensure they align with the brand's best interests and the transferee's ability to succeed. This requirement underscores the importance of transparency and open communication with the franchisor throughout the transfer process.