What must a Fly Fitness Developer do contemporaneously with the execution of the Multi-Unit Development Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 4.2 Application of Development Fee. Contemporaneous with the execution of this Agreement, Developer shall execute the initial Franchise Agreement for the first Franchised Business to be established pursuant to the Mandatory Development Schedule. Developer shall receive the applicable credit from the Development Fee, which shall be applied to the Initial Franchise Fee due under the initial Franchise Agreement. Provided that Developer is in compliance with the Mandatory Development Schedule and is not otherwise in breach of this Agreement, upon the execution each of additional Franchise Agreement for a Franchised Business to be developed hereunder, Developer shall receive the applicable credit from the Development Fee, which shall be applied to the Initial Franchise Fee payable pursuant to each such additional Franchise Agreement. Upon Franchisor's approval, Developer may enter into the initial Franchise Agreement or any subsequent Franchise Agreement as required under this Agreement using a newly formed entity, such as a limited liability company, corporation or partnership, for the sole purpose of entering into a Franchise Agreement and operating the Franchised Business pursuant thereto, provided that Developer shall also personally sign such Franchise Agreement as a principal.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a Developer must execute the initial Franchise Agreement for the first Franchised Business to be established under the Mandatory Development Schedule contemporaneously with the execution of the Multi-Unit Development Agreement. The Developer will then receive credit from the Development Fee, which will be applied to the Initial Franchise Fee due under the initial Franchise Agreement.
Provided the Developer complies with the Mandatory Development Schedule and is not in breach of the agreement, they will receive applicable credit from the Development Fee upon the execution of each additional Franchise Agreement for a Franchised Business. This credit is applied to the Initial Franchise Fee payable for each additional Franchise Agreement.
Fly Fitness also allows the Developer to enter into the initial Franchise Agreement or any subsequent Franchise Agreement using a newly formed entity, such as a limited liability company, corporation, or partnership, provided that the Developer also personally signs the Franchise Agreement as a principal. This provides flexibility in structuring the business ownership while ensuring the Developer remains personally committed to the agreement.