Does the Fly Fitness Developer have to be notified prior to the assignment of the agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ay pay the entire purchase price at closing; (iii) Franchisor 's credit will be deemed equal to the credit of any proposed transferee; (iv) Franchisor will have at least sixty (60) days to close the purchase; and (v) Franchisor will be entitled to receive from Developer all customary representations and warranties given by a seller of franchise development rights.
- 6.5.4 If Franchisor does not exercise its right to buy within thirty (30) days, Developer may thereafter transfer the interest to the transferee on terms no more favorable than those disclosed to Franchisor, provided that such transfer is subject to Franchisor 's prior written approval pursuant to Section 6.3 hereof. However, if (i) the sale to the transferee is not completed within one hundred twenty (120) days after the offer is given to Franchisor or (ii) there is any material change in the terms of the offer, the offer will again be subject to Franchisor's right of first refusal.
- 6.6 Death or Permanent Disability. The grant of rights under this Agreement is personal to Developer, and on the death or permanent disability of Developer, the executor, administrator, conservator, or other personal representative of Developer shall be required to transfer Developer's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor. Failure to transfer in accordance with the forgoing will constitute a material default and all that is granted by this Agreement will terminate. A transfer under this Section 6.6, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 6 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 6.5 above. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Developer's Fly Fitness outlet(s) and remaining development schedule during the six (6)-month period from its onset.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the agreement is binding on the successors and assigns of Fly Fitness. It is also binding on the developer and their heirs, executors, administrators, successors, or assigns. However, the developer cannot transfer any interest in the agreement unless it is in accordance with Article 6 of the agreement.
Specifically, if Fly Fitness does not exercise its right to buy the developer's interest within 30 days, the developer can transfer the interest to another party. However, this transfer is subject to Fly Fitness's prior written approval as described in Section 6.3. If the sale is not completed within 120 days after the offer is given to Fly Fitness, or if there is a material change in the offer's terms, the offer is again subject to Fly Fitness's right of first refusal.
In the event of the death or permanent disability of the developer, their representative is required to transfer the developer's interest in the agreement within six months to a third party approved by Fly Fitness. Failure to do so constitutes a material default, leading to the termination of the agreement. Any transfer under this condition is subject to the conditions outlined in Article 6, including those in Section 6.5, unless transferred by gift, devise, or inheritance.