Is a Fly Fitness developer allowed to participate in a business similar to the Fly Fitness system during the term of the agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.3 Noncompetition Covenants. Developer acknowledges that, pursuant to this Agreement, Developer will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training, and experience of Developer. Developer acknowledges that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to him or her in the development and operation of Franchised Businesses, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Developer is entering into this Agreement. In consideration for such specialized training, trade secrets, Confidential Information and rights, Developer covenants that, except as otherwise approved in writing by Franchisor:
- 8.3.1 During the term of this Agreement, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of any Franchised Business to be developed hereunder or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any restaurant or eatery business similar to the System ("Competitive Business"); or (iii) seek to employ any person who is at that time employed by Franchisor; or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the
business of the Franchisor or any Fly Fitness franchisees or Franchisor-affiliated outlets.
8.3.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Businesses to be developed hereunder or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any Competitive Business within ten (10) miles of the Territory or any Fly Fitness; or (iii) seek to employ any person who is at that time employed by Franchisor, or otherwise induce such person to leave his or her employment or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, during the term of the agreement, a developer is restricted from participating in any business similar to the Fly Fitness system, referred to as a "Competitive Business". Specifically, the developer cannot engage as an owner, partner, director, officer, employee, consultant, or agent in any restaurant or eatery business similar to the Fly Fitness system. This restriction applies unless Fly Fitness provides written approval otherwise.
This non-compete clause ensures that the developer's focus remains solely on expanding the Fly Fitness brand within their designated area. It prevents the developer from using the knowledge and resources gained from Fly Fitness to benefit a competing business. This is a standard practice in franchising to protect the brand's market position and confidential information.
After the agreement expires or terminates, the developer faces further restrictions for 24 months. During this period, they cannot participate in a Competitive Business within 10 miles of their former territory or any Fly Fitness location. They are also prohibited from soliciting Fly Fitness employees or taking actions that could harm the goodwill associated with the Fly Fitness brand. These post-term restrictions are designed to further protect Fly Fitness's interests and prevent unfair competition from former developers.