Is the Fly Fitness Development Agreement considered a Franchise Agreement?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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, the Development Agreement is explicitly stated not to be a Franchise Agreement. The document clarifies that the Development Agreement does not grant the developer any rights or licenses to operate a franchised business, distribute products or services, or use Fly Fitness's trademarks. Instead, it provides the developer with the right to develop, construct, open, and operate Fly Fitness franchises within a specific development area, contingent upon the execution of a separate Franchise Agreement.
This distinction is crucial for prospective multi-unit franchisees because the Development Agreement primarily outlines the terms and conditions for securing the rights to develop multiple Fly Fitness locations. It sets the stage for future Franchise Agreements, which will govern the actual operation of each individual Fly Fitness studio. The developer must comply with the Mandatory Development Schedule and fulfill all conditions before being granted the rights to establish additional franchised businesses within the designated area.
Furthermore, Fly Fitness retains specific rights within the territory, such as offering other products or services, exploring alternative fitness concepts, and utilizing alternate distribution channels. This reservation of rights ensures that Fly Fitness can continue to innovate and adapt its business model without being restricted by the Development Agreement. The developer's rights are limited to those explicitly granted in the agreement, emphasizing the importance of understanding the scope and limitations of the development rights.
In summary, the Fly Fitness Development Agreement serves as a preliminary agreement that grants development rights but does not function as a Franchise Agreement. A prospective franchisee entering into a Development Agreement with Fly Fitness should be aware that they will need to execute separate Franchise Agreements for each location they plan to develop and operate.