What must a Fly Fitness developer request from the Franchisor before developing an additional Franchised Business?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Subsequent to Developer's signing of this Agreement and the initial Franchise Agreement, and provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for Developer's first Franchised Business, Developer shall execute an additional Franchise Agreement for the development of the second Franchised Business to be opened under the Mandatory Development Schedule. Provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for each subsequent Franchised Business to be developed by Developer, Developer shall execute an additional Franchise Agreement for the development of the next Franchised Business to be opened under the Mandatory Development Schedule.
Document, (ii) submit to Franchisor all information and other documents requested by Franchisor prior to and as a basis for the issuance of Franchise Agreements in the System, (iii) submit to Franchisor all financial statements reasonably requested by Franchisor, and (iv) satisfy Franchisor's then-current financial criteria for multiunit franchisees.
- 5.4.2 Developer shall be in full compliance with this Agreement, the Mandatory Development Schedule, and all Franchise Agreements with Franchisor and any other agreement with Franchisor or Franchisor's affiliates; and
- 5.4.3 Developer has demonstrated the management skills necessary for competent operation, organization, customer service and record keeping of an additional Franchised Business as determined by Franchisor, in Franchisor's sole discretion.
- 5.5 Termination for Failure of Condition. Notwithstanding anything to the contrary contained herein, in the event that Franchisor determines, in Franchisor's sole and absolute discretion, that any condition set forth in Section 5.4 hereof cannot be satisfied, Franchisor may terminate this Agreement upon written notice to Developer. Termination of this Agreement in accordance with this Section 5.5 shall have no effect on the validity of any other agreement between Franchisor and Developer, provided that Developer is in full compliance therewith.
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 meet several conditions before establishing additional franchised businesses. Specifically, the developer needs to satisfy or have the franchisor waive the conditions outlined in Section 5.4 of the agreement. Upon executing a lease for each subsequent Fly Fitness location, the developer must also execute an additional Franchise Agreement for the development of the next franchised business, following the Mandatory Development Schedule. This indicates that each new location requires a separate agreement.
Section 5.4 lists specific requirements that the developer must meet. These include providing all requested information and documents, such as financial statements, needed for issuing Franchise Agreements within the Fly Fitness system. The developer must also meet the franchisor's current financial criteria for multi-unit franchisees. Furthermore, the developer must be in full compliance with the Development Agreement, the Mandatory Development Schedule, all existing Franchise Agreements with Fly Fitness, and any other agreements with Fly Fitness or its affiliates.
Finally, the developer needs to demonstrate the necessary management skills for competent operation, organization, customer service, and record keeping for the additional Fly Fitness location. This determination is made by Fly Fitness at its sole discretion. If Fly Fitness determines that any of these conditions cannot be met, it has the right to terminate the Development Agreement with written notice to the developer. However, such termination will not affect the validity of any other agreements between Fly Fitness and the developer, provided the developer is in full compliance with those agreements.