What must a Fly Fitness developer execute as part of the terms and conditions of the Development Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ge_120_Picture_0.jpeg)
NOW, THEREFORE, the parties, in consideration of the promises, undertakings and commitments of each party to the other set forth herein, and intending to be legally bound hereby, mutually agree as follows:
1. RECITATIONS. The Recitations set out above form part of this Agreement.
2. GRANT OF DEVELOPMENT RIGHTS.
- 2.1 Grant. Franchisor hereby grants to Developer, and the Developer hereby accepts from the Franchisor, on the terms and conditions set forth in this Agreement, which includes, but is not limited to, the execution of a Franchise Agreement pursuant to Section 4.1 hereof, the right to develop, construct, open and operate one Franchised Business within the Development Area set forth in Attachment 3. Developer shall be granted rights to establish additional Franchised Businessesin the Development Area, up to the total number of outlets set forth in the Mandatory Development Schedule set forth in Section 5.2 hereof, subject to Developer's full compliance with all conditions precedent to the grant of such rights outlined below, which rights shall be exercised in accordance with Section 4.1 hereof.
- 2.2 Reservation of Rights. Notwithstanding the provisions of Section 2.1 above, Developer understands and agrees that all rights to any businesses, other than as specified in this Agreement, are fully reserved to Franchisor within or outside of the Territory. By way of example only, Franchisor reserves the rights to offer (i) other products or services not offered under the Marks, (ii) other fitness concepts under the Marks or other trademarks, and (iii) services and products through any channel in the Territory other than a dedicated Fly Fitness outlet, such as to schools, camps, institutional/professional campuses, and conferences; distribution of products through retail outlets, including but not limited to, grocery, health and fitness outlets; and the Internet ("Alternate Distribution Channels").
- 2.3 No License to System and Marks. Developer expressly acknowledges that this Agreement is not a Franchise Agreement and does not grant to Developer any right or license to operate a Franchised Business, distribute any product or service, or use the Marks.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, as part of the terms and conditions set forth in the Development Agreement, the developer must execute a Franchise Agreement. Specifically, the developer must execute the initial Franchise Agreement for the first Franchised Business to be established pursuant to the Mandatory Development Schedule.
Furthermore, the Fly Fitness developer must personally sign each Franchise Agreement as a principal, even if they choose to form a new entity such as a limited liability company, corporation, or partnership to enter into the Franchise Agreement and operate the Franchised Business. This ensures the developer remains personally liable and committed to the obligations under the Franchise Agreement.
In addition to executing the Franchise Agreement, the developer must also pay a development fee. The Development Fee is fully earned at the time the Multi-Unit Development Agreement is signed and is not refundable under any circumstances. For the first Fly Fitness Franchised Business, the fee is $50,000, and for each subsequent Franchised Business, it is fifty percent (50%) of the discounted initial franchise fee of $25,000.