Is the Fly Fitness Developer allowed to incur any debt or obligation on behalf of the Franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.1 Independent Licensee. Developer is and shall be an independent licensee under this Agreement, and no partnership shall exist between Developer and Franchisor. This Agreement does not constitute Developer as an agent, legal representative, or employee of Franchisor for any purpose whatsoever, and Developer is not granted any right or authority to assume or create any obligation for or on behalf of, or in the name of, or in any way to bind Franchisor. Developer agrees not to incur or contract any debt or obligation on behalf of Franchisor or commit any act, make any representation, or advertise in any manner which may adversely affect any right of Franchisor or be detrimental to Franchisor or other developers or franchisees of Franchisor. Pursuant to the above, Developer agrees to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorneys' fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs or judgments against Franchisor arising out of the relationship hereby established which specifically, but not exclusively, includes costs, losses, expenses, attorneys fees relative to assignment or the transfer of right to develop and transactional costs relative thereto, defaults under any leases, subleases, notes, receipt of revenues or any other relationships arising directly or indirectly out of the development and operation of the Fly Fitness outlets.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the Developer is explicitly prohibited from incurring any debt or obligation on behalf of the Franchisor. The agreement specifies that the Developer operates as an independent licensee and is not an agent, legal representative, or employee of Fly Fitness for any purpose. This means the Developer cannot act in a way that legally binds Fly Fitness to any financial or contractual commitments.
This restriction is a standard practice in franchising, designed to protect the Franchisor from liabilities arising from the Developer's actions. The Developer agrees not to incur or contract any debt or obligation on behalf of Fly Fitness or commit any act, make any representation, or advertise in any manner which may adversely affect any right of Fly Fitness. This clause ensures that Fly Fitness maintains control over its financial and legal obligations, preventing the Developer from creating unauthorized liabilities.
Furthermore, the Developer is required to indemnify Fly Fitness from any liability, loss, attorneys' fees, or damage resulting from claims, demands, taxes, costs, or judgments against Fly Fitness arising out of their relationship. This indemnification clause reinforces the Developer's responsibility for their own actions and ensures that Fly Fitness is held harmless from any financial repercussions stemming from the Developer's operations. This includes costs related to the assignment or transfer of development rights, defaults under leases, and any other relationships arising from the development and operation of Fly Fitness outlets.